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FCC's Pai: Marketplace Should Set Value of Auctioned Broadcast Spectrum

FCC Commissioner Ajit Pai plans to tell
Congress Wednesday that the FCC should not set reserve
prices in the broadcast incentive auction based on how many viewers a station
has or its value as an ongoing broadcast operation.

"The prices
paid to broadcasters should be determined by the auction process, not by
government fiat," he said in prepared testimony for a Senate
Appropriations subcommittee hearing on the FCC's budget. Pai and the other
commissioners are witnesses at the hearing.

The Expanding
Opportunities for Broadcasters Coalition (TV stations pondering selling their
spectrum), led by Executive Director Preston Padden, has been arguing that the
FCC could discourage broadcasters from participating by paying larger stations
more than smaller ones, or "scoring" them on size or audience or
population when the value of a station's spectrum to the government should
instead be how it affects other stations in the repacking process.

Pai also plans to
tell the subcommittee that the FCC should not limit wireless company
participation in the forward auction, another point Padden and the coalition
have been making as well. "A contrary approach will distort not only who
may purchase spectrum, but also how much spectrum will be available for
auction," says Pai.

The FCC is
considering modifying its spectrum screen, the threshold of spectrum holdings
by any one company in a single market. It is not a cap, but exceeding the threshold
triggers additional FCC scrutiny of those holdings. Lowering the screen could
affect how much spectrum large companies like Verizon and AT&T could bid
for in the auction.

Pai also plans to
talk about a number of other key FCC issues, including promoting infrastructure
investment, permitting IP transition geographic market pilot program
tests--which AT&T has asked for--reforming the E-rate program and FCC
process reforms like shot clocks and deadlines, which he supports.

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.