The FCC’s ambitious plan to free up more spectrum space for wireless devices has drawn skepticism from broadcasters as to just how many stations would be willing to give up their space or sign off altogether.
But on Wednesday, as all five FCC commissioners appeared before a House subcommittee to give a status update on the auction plan, there was some insight as to just how much interest there is from stations so far.
Preston Padden, the former top Disney lobbyist who is leading a coalition of broadcasters considering putting some or all of their spectrum up for auction, wrote in a letter to a top House lawmaker that their membership “includes more than 25 stations in the largest markets where the FCC’s need for willing sellers is likely to be the greatest. And, we receive additional membership inquiries on a weekly basis.”
In an e-mail, Padden said that he could not disclose the names of the stations, noting that they were ongoing businesses, with advertisers and employees, and it would be “terribly disruptive for them to announce that they are thinking of selling.”
But the formation of his org, the Expanding Opportunities for Broadcasters Coalition, with the sole focus to “advocate for the success” of the voluntary incentive auctions, signalled that there may be a number of stations serious about cashing out. “The FCC has only one shot to get it right,” Padden noted at the time.
The voluntary incentive auctions are intended to yield as much as 120 MHz of broadcast spectrum, which FCC chairman Julius Genachowski has said it needed to meet the increasing demand for mobile devices. Stations that participate would share in the proceeds with the federal government.
But much depends on the details. The National Assn. of Broadcasters has expressed concerns throughout on the means for carrying out the auctions, and the potential disruption to stations that choose to stay in business. Among other things, some channels will be forced to move on the band, and the congressional legislation included a $1.75 billion fund for relocation costs.
Padden’s letter was to Greg Walden (R-Oregon), chairman of the House subcommittee on communications and technology, and timed to its hearing with the FCC commissioners.
At that hearing, some concerns were expressed that the auctions will be so complex as to deter participation. Commissioner Ajit Pai said that an FCC “notice of proposed rulemaking,” the outlines for the auctions that the agency issues in September, “appears to envision an auction that will yield no net revenues.” He warned against limits that the FCC may place on participation, such as caps that the agency would place on stations as they seek a high price in a “reverse” auction.
Walden also warned of “overly prescriptive auction rules,” as well as concerns that the auction plan included too much space between license holders. Such space, called “guard bands,” is unlicensed and intended to prevent interference, but Walden questioned whether the FCC’s proposal was too fat and, in turn, would be better be put up for auction. He said that the current FCC plan could forgo $7 billion to $19.2 billion in spectrum revenue.
The government’s money collected from the auction is to be used to create a public safety broadband network as well as to reduce the deficit.
Genachowski, however, said that including such unlicensed spectrum was an important driver for “innovation, investment and economic growth,” and that the proposal frees it up for “Wi-Fi-like uses and other innovations.”
He also noted that the auctions. expected to be conducted in 2014, is being planned with “leading experts in auction theory and implementation.” He noted that broadcasters are being informed about the details via webinars, which have so far drawn 2,500 participants.
On Tuesday, a group of 17 House members from California sent a letter to Genachowski inquiring about the impact that the auction would have on stations along the state’s border with Mexico. Genachowski said that the FCc has been coordinating with Mexican and Canadian communications officials to resolve such “cross-border” issues.