Broadcasters at NAB Uncertain About Many Auction Questions

Bureau Chief Bill Lake and adviser Rebecca Hanson couldn’t give participants at the Class A event the answers some sought about in what markets their spectrum will be bought and when such sellers would need to stop operating. The bureau held the event to answer questions from licenses of Class A stations, which are low power but have the same obligations as full-power TV licensees and are eligible to participate in the auction. The bureau continues (CD March 21/12 p3) sending letters to such licensees to make sure they're complying with paperwork and other rules, but some told us they feel singled out. Some Class A’s have had their status reduced to regular low power, which means they can’t participate in the auction, said agency and industry officials. Our list of some of those stations is at http://www.warren-news.com/showcause.htm.

Watch TV President Greg Herman may want to offer to sell some of his Class A stations’ spectrum, “but one, I need to know, will my stations be in,” he asked at the event. “I've got to know, as soon as possible ... is my station allowed to participate” and “how much” he could be paid, he said. “Nobody’s actually put any meat on those bones.” Something else he'd like to know is should his reverse bid be successful, when would the station stop broadcasting, said Herman. “It’s like an airplane, you don’t fill it up with gas and see what you can do” before retiring it, he said of stations. “They need to know when are they done running that station,” he said. “It affects everything to do with their decision about being in an auction."

Herman made good points, responded Lake. “We know that uncertainty is troubling. And we're working to provide answers.” On the size of markets where stations’ spectrum will be bought, “we will need to have contributions, and we would welcome contributions, in smaller markets, too,” though fewer frequencies may be needed there than in major markets, said Lake. “It’s conceivable that we won’t know until we go to an auction” in which markets channels will be cleared and in which places they won’t be, he continued. Lake also spoke of ongoing coordination with Canada and Mexico, a topic that came up at another spectrum panel at NAB. (See separate story in this issue.) At the bureau-organized event, Hanson, senior adviser on broadcast spectrum, dealt with some technical issues.

Because of the way the auction will be run, broadcasters aren’t required to know what price they seek at the outset, Lake said to a questioner. When asked about the different values between what a station is worth and what a carrier may pay for the frequencies it uses, Lake said they're two different things. “What they're buying is very different than what you're selling,” he said of broadcasters and carriers. “We're very interested in making sure viewers get the programming they want,” Lake said to a question about the diversity of Class A content. Class As that don’t sell are “entitled to a channel if you don’t contribute,” he said in another response.

The commission has “every motivation” to hold an auction soon, as Chairman Julius Genachowski has told staff an order should be finished this year and the auction held next year, said Lake. Those instructions stand, even with Genachowski and Commissioner Robert McDowell leaving the FCC, said Lake. Some participants told us the bureau staff comments about Class A participation indicate to them that those stations still on analog and in out-of-core channels may not be able to participate. That worries Class A owners including Bruno Goodworth Network President Ron Bruno, who moderated the event, and Venture Technologies CEO Paul Koplin, they told us.

"There’s so much uncertainty, that people don’t know what to expect next” among Class A’s, said Bruno. He cited recent letters from agency staff asking some stations about whether they're violating rules they must follow to keep their status, the public notice freezing some applications as of the date the Spectrum Act was passed -- Feb. 22, 2012 -- without any notice, and bureau staff comments about analog out-of-core channels possibly not being able to participate. “That they're going to have ongoing dialogue with Class A’s is the biggest plus” to come from the bureau’s meeting, said Bruno, who like Herman was active in the Community Broadcasters Association of low-power TV stations before it folded a few years ago. “I don’t really think there is anybody who can tell you what your station is worth,” because of the nature of the auction itself,” said Bruno. “It’s an auction. It’s what people are willing to pay. So I don’t think the FCC can answer that question."

"Without certainty, without transparency, we don’t have the tools to decide whether we want to participate in the auction,” said Koplin. “The FCC needs to be more transparent. And changing the rules without any advance notice does not add to any transparency.” The bureau until a few months ago had been processing some Class A applications, he said.

"It is clear from the questions of broadcasters at this convention that the commission is going to have to do a much better job of making participating in the auction appealing,” said Executive Director Preston Padden of the Expanding Opportunities for Broadcasters Coalition of Class A and full-powers that are interested in possibly selling. “If that was supposed to be a session to encourage broadcasters to participate, it failed,” he said of the bureau’s Q-and-A. “That was a roomful of people that the commission should be trying to attract to the auction, instead of making them angry.”