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Auctions up in air, again

At press time, the FCC had not changed its plans to push ahead with auctions of TV channels 52-59 and 60-69 in June, despite increasing pressure from the Bush Administration and top members of Congress to hold off. Observers say the FCC's course is likely to be deflected.

Last week, FCC Chairman Michael Powell told a House Appropriations Subcommittee that the law requires the FCC to go through with the auctions as planned.

"In the past, we could legitimately say, 'Everybody wants a delay and no one will sue,' but that's not true this time," Powell told the subcommittee. "There are clear industry players who want the auction to proceed."

But there are clear government players who want the auctions to be delayed. Last week, Secretary of Commerce Donald Evans sent Powell a letter "on behalf of the Bush administration, "asking him to wait.

"Until more certainty exists about the means for and timing of such spectrum-clearing, an auction of the upper and lower 700 megahertz bands would be premature and contrary to public interest," Evans wrote to Powell.

The administration wants to delay auctions of channels 60-69 to 2004 and auctions of television channels 52-59 to 2006, and it has proposed legislation to that effect in the past two budget cycles. Part of the concern is that preliminary auctions will result in less money for the federal treasury; auction proceeds are due in September. To try to quell that concern, the FCC has assigned a $2.6 billion floor to the auction. If the proceeds fall short, the auctions will be nullified and rescheduled.

The day after Powell testified, Reps. Billy Tauzin (R-La.), John Dingell (D-Mich.), Fred Upton (R-Mich.) and Ed Markey (D-Mass.) said they will introduce legislation this week to delay the auctions indefinitely.

"The FCC is nowhere near ready to hold an auction," said Ken Johnson, Tauzin's spokesman. "They have no 3G wireless plan, they have no HDTV plan and, most importantly, they have no complete spectrum-management plan. They need to slow down and think this through."

With pressure on the FCC from both the administration and Congress, a precedent of delay and no real reason to hold the auctions other than congressional mandate, chances are the FCC will end up stalling the auctions, observers said. That would be the sixth delay for the 60-69 auctions and the first for 52-59, which have not been scheduled before.

Bud Paxson, chairman of Paxson Communications, has been pushing the government to hold the auctions, mainly because he stands to make millions of dollars from license winners who want television stations to clear the spectrum more quickly.

"We don't have to give up this spectrum until 85% of American homes can receive over-the-air digital signals, and that's going to be a decade or more," Paxson said. "But we're willing to clear out if we get paid."