EOBC Asks FCC to Raise Auction Opening Prices

The Expanding Opportunities for Broadcasters Coalition met Feb. 3 with FCC staffers to ask them to raise the opening bid prices on TV stations in the incentive auction, and to change its valuation of stations.

According to an ex parte filing on the meeting, The EOBC's executive director and representatives of some of the members —they do not have to identify themselves— met with Internet Auction Task Force chair Gary Epstein and other senior staffers to make their pitch.

They said that the FCC should recalculate —as in increase— its opening prices given the record-breaking prices for the AWS-3 auction. It also said that the commission can't justify hundreds-of-millions-of-dollar differences in pricing for stations with nearly the same impact on the station repacking process, which the coalition has always argued should be the standard, rather than figuring in population served, which the coalition says results in the greatest loss of TV service.

They proposed a number of alternative factors all based on that clearing potential, including "frequency at which a station is frozen in repeated auction simulations, the relative value of spectrum precluded by a given station, and the population precluded by a given station."

EOBC says a compromise path would be to reduce the weight of a station's interference-free population., which would encourage greater participation by broadcasters.

The coalition urged the FCC to provide more information during the reverse auction, including pricing. "The disparity between the amount of information that the Commission intends to provide during the forward and reverse auctions is particularly striking, given that the broadcast market has a much more competitive market structure than mobile broadband," they told the FCC.

Finally, they said the FCC should keep to the early 2016 timetable for the auction and said wireless carriers will be able to bid aggressively.

There has been some suggestion, including by some financial analysts, that carriers might need more time to raise the money given the billions just spend in the AWS-3 auction by Verizon and AT&T (and Dish) most prominently. But EOBC says that given the demand and the fact that the spectrum won't be available until several years after it is auctioned, it is in the public's interest to keep to that early 2016 timetable.

The FCC is preparing to take its auction pitch on the road, meeting with station owners in various cities, both in group and private settings, to make its pitch on why the auction is a once-in-a lifetime payoff potential, and a way to get a return and still be in the business through channel sharing.

Some National Association of Broadcasting members also are eyeing the auction, particularly those with duopolies in larger markets, where the wireless spectrum is most needed.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.