The FCC has provided guidance on what broadcasters can and can’t say about their participation in the upcoming incentive auction, and our advice is this: Read it carefully, have your lawyers read it carefully. Then watch what you say.
While the FCC said it is not OK to say you are not bidding in the auction, it is OK to say you are not participating in it. That is a hair that seems tough to split.
There are also exceptions for various communications, including among those with channel-sharing agreements, except that there are exceptions to that exception that could wind up being violations of anti-collusion rules, which the FCC advice is meant to help broadcasters avoid. (We did say to have your lawyers read it carefully, right?)
Broadcasters will definitely want to avoid those violations, since the penalty could be losing their auction payout or having their license revoked.
Allowing licensees to reveal they are participating in the auction will allow them to explain in retrans negotiations, for example, why they are asking for a short-term renewal, or the converse—saying they want a long-term renewal because they won’t be participating.
The rules only apply to communications among bidders in the reverse broadcaster auction and with bidders in the forward auction, not third parties such as lawyers or lenders.
The FCC is not buying communications lawyers’ assertions that the canon of ethics should be enough assurance that those representing more than one licensee will not share that info. “We caution that an individual practitioner that holds bids or bidding information of more than one covered party presents a greater risk of engaging in [prohibited] communication,” the FCC said.
And in a nod to the First Amendment, the FCC said that if a station’s news department reports on a station’s bidding strategy, that will not automatically be a violation imputed to station ownership, though it did warn stations to avoid internal leaks.
The bottom line is that loose lips could sink bids, so probably the less said the better.
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