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Media Bureau Chief Bill Lake Pitches Cash Infusions for Struggling Stations

Media Bureau Chief Bill Lake Wednesday pitched incentive
auctions to an audience of broadcast and cable execs and attorneys, saying the
FCC had heard from broadcasters and brokers interested in the auctions, which
will compensate broadcasters for giving up spectrum for auction, presumably for
wireless carriers who claim to be facing a spectrum shortage now and a crisis

At a Media Institute luncheon in Washington, D.C., Lake said
that while TV stations are doing better than they were in the depths of the
downturn three years ago, not all are sharing in that "relative"
recovery. Lake said that broadcasters in Las Vegas for the National Association
of Broadcasters convention "hammered home" to FCC staffers in
conversations that even among the major broadcast groups, economic conditions
varied widely. He suggested that some of those groups include smaller,
struggling stations, as well as strong ones. Then there were smaller
independent stations that faced a "harsher reality" than others.

In both cases, he suggested, there was an opportunity to
cash in on their spectrum through auctions. "It is exactly this disparity
in economic prospects among stations that convinces us that the incentive
auctions that Congress has authorized present a real opportunity for some
stations," he said.

A station struggling today and without a clear path to
getting more economic traction, "may want to think hard about one of the
options that will be available for participation in the action," including
ones that allow the station to get a "capital infusion" while
remaining on the air.

Those include channel sharing, a framework for which the FCC
plans to announce Friday.

He said broadcasters are taking a "careful look"
at the auction opportunity. "Some broadcasters have called us with business
questions about the practicality of participating in the auctions and how
channel sharing would work." He said in other cases, some station brokers
have called with questions from anonymous clients.

Lake said he understood broadcasters could not evaluate
their "opportunity" without more specific information about the
design of the auction. Though he did not say when that would be forthcoming, he
did say it would be made available "as we go forward."

Lake urged broadcasters to continue to explore new
technologies and alternate platforms. Broadcasters who are focused on their
futures need to think of themselves as providers of content where, how and when
a customer wants to see or hear it." He said FCC Chairman Julius
Genachowski and NAB President Gordon Smith "channeled each other" on
that issue. "Broadcasters need to grasp new technologies to insure a
strong place for themselves in tomorrow's media landscape."

Citing Smith's red meat speech at the convention, Lake said
he had told broadcasters their competitors were out to get them and want them
"out of the game." He said that was not paranoia, then drove home the
point. "As one of my mentors used to tell me, even if you are headed in
the right direction, if you are standing still, you are likely to get run over.
President Lincoln expressed similar thought. Things may come to those who wait,
but only the things left by those who hustle."

If Lake's sticks were the threat of losing out on an
economic opportunity or being left in the technological dust, his carrot was
praise for a medium that frequently feels like the red-headed stepsister in the
FCC's future of media plans.

Lake said the auctions would not be for everyone. He said
many stations want to "keep serving their viewers as they do today"
and "see an exciting future for themselves." Lake said over-the-air
broadcasters continued to play a critical role in informing and entertaining
the public, and will continue to do so. "We expect a healthy broadcast
industry to emerge from the auctions and subsequent repacking, I expect, healthier
than it is today."

Lake had no timetable for release of the FCC's media
ownership rule proposal, but said it was operating on the assumption the
Supreme Court would not hear broadcaster appeals of the Third Circuit remand of
the rules, and so did not expect to have to delay its decision. He said there were also no plans to delay a decision until after the election and that the FCC was .going to move forward "as quickly as we can."

The commission
collected final comments on the proposal last week.