EOBC: FCC Auction Lowball Could Hit 1,100 stations

The Expanding Opportunities for Broadcasters Coalition says that the FCC's proposed formula for pricing initial offers in the broadcast incentive auction undervalues 1,000 stations and, unless it is changed, will "snatch auction failure from the jaws of success."

The EOBC represents over 80 stations potentially willing to give up spectrum for the auction at the right price, but EOBC executive director Preston Padden has been trying to convince the FCC that the price will not be right if the commission diverts from valuing a station based on its impact on repacking.

In the recently released public notice on implementing the auction framework Report and Order released last May, the FCC provided detailed proposals including basing part of the station valuation on population served, which Padden says is irrelevant to a station's interference profile and was only included to drive down the price.

In a blog post, Padden listed the stations that would be undervalued in under that scenario. He said many of the stations are small businesses and nonprofits who have to trust the FCC to do the right thing by them since they don't have the resources to vet the "incredibly complex" auction.

FCC officials did say that the public notice was not a final product, and that it was meant to prompt comment. EOBC had plenty to say about the pricing scheme, suggesting the FCC was trying to lowball the value in order to take advantage of broadcasters.

Padden has argued that the success of the AWS-3 auction currently underway ($44 billion and growing, four times its reserve price) demonstrates that the broadcast incentive auction, potentially much more than the 65 MHz up for bid in AWS-3, will generate "an abundance of revenue" to pay broadcasters.

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.