Broadcasters May Have Limited Leverage to Stop FCC Auction Plans
Broadcasters may be limited in the amount of leverage they can apply on Capitol Hill to stop the FCC’s quest to auction TV channels in a way the industry contends will harm almost all stations (CD July 26 p4), some executives said Wednesday. They told us it will be challenging for broadcasters, or any industry, to successfully exert much influence over how legislators deal with the debt ceiling and deficit reduction before Tuesday’s deadline to raise the cap. Spectrum is likely to be part of any long-term solution to cut the U.S. deficit and to let the country issue more IOUs, executives said: If there’s a short-term solution, which right now seems more likely than a longer-term plan, spectrum may not be part of the immediate fix. That would give TV stations more time to get the interference and other protections they seek.
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There’s some hope House and Senate leaders will be amenable to changes to their competing deficit and debt-cap plans, since each side is trying to get support from peers to pass a bill. Aides to Senate Majority Leader Harry Reid, D-Nev., indicated to lobbyists that he’s willing to consider some changes to his plan, some industry lawyers said. His plan includes spectrum and has broadcasters worried (CD July 27 p2). Meanwhile, broadcast officials noted that House Speaker John Boehner, R-Ohio, is also trying to win colleagues’ support for his competing plan, and so he, too, may be open to changes if spectrum is added to his proposal. It’s not currently in his proposal. (See separate story this issue.)
There’s been consideration among some broadcasters of a compromise on the voluntary auction of 120 MHz of TV spectrum the FCC seeks authority to hold, industry officials said. They said such a compromise could include the industry not opposing spectrum auction legislation as part of even a short-term budget deal as long as stations are protected more than the FCC seeks. Even if industry doesn’t back any solution now -- and it’s not clear consideration of any such plan has advanced much -- the upshot remains that if spectrum legislation doesn’t become law now, it likely will soon. Broadcast executives said Congress is likely going to want the money from an auction of TV frequencies to be used to reduce the deficit. That’s even though the $20 billion or so that might go to the Treasury after public safety gets additional funds is a drop in the bucket compared to the trillion-plus dollars that may be part of a debt and deficit deal, an executive noted.
Right now, the No. 1 priority of broadcasters in Washington is to head off inclusion of any spectrum legislation authority for the commission that could force stations to go off-air because of lack of available channels or to shrink their coverage areas, executives said. “Then they live to fight another day in the longer-term project, where spectrum will be front and center” as a small way to reduce the deficit or raise revenue, a veteran Republican lobbyist said. “Anything done in regular order strengthens their hand. Anything not done in regular order, when they're not hearings and markups, hurts their hand.”
A reason NAB is ratcheting up its campaign to protect broadcasters from forced repacking and other problems is that the debt deal may not come about with the regular order of public hearings and markups before legislation is voted on, NAB President Gordon Smith said Monday. “We're touching all the right people and we're cautiously optimistic that our message is being heard,” a spokesman said Wednesday, “and that at the end of the day there will be a recognition of the enduring value” among legislators of broadcasting.
"I doubt if anyone could stop an auction, in that it is a revenue generator that isn’t a tax,” said a longtime broadcast executive. “The question then becomes how real are the safeguards to protect the broadcast signal once repacked from interference.” Executives said they think that if a House bill prevails, such as Boehner’s, broadcasters could get the protection from interference and other problems they seek. Some owners of TV stations want to cut a spectrum deal on the Hill, thinking they'll get more of what they want now than down the line, an executive said.
Some are more sanguine about a voluntary incentive auction. President Robert Prather of Gray TV said he’s unconcerned about the effects on the company’s three-dozen stations of any auction that doesn’t force participation. “If people want to sell the spectrum, they've got the right to,” he said: “I don’t have an objection to it at all -- it may help TV values in the long run” because there would be fewer stations that could be purchased. “If you don’t have to sell, you won’t sell. If you want to sell, you're going to sell, and you'll get a price” that’s good, Prather said. “I'd be fighting it to the death if they're trying to take it involuntarily or trying to swap it,” he said. “All the TV stations out there spent a lot of money going digital and HD, so they can claim it’s free, but it cost us about $100 million so far to go HD,” he said of those who contend broadcasters don’t pay for what they use.