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Noncoms Ask FCC to Axe U-to-V Auction Discount

In a meeting with FCC chairman Tom Wheeler and key members of his incentive auction team this week, representatives of CPB, PBS and the Association of Public Television Stations said the commission should pay stations who are moving from a UHF to a VHF just as much to get off that spectrum as if they were giving it up entirely to get out of the business or share channels.

That is according to a filing at the FCC obtained by B&C/Multichannel News.

The FCC is proposing to pay U-to-V movers only about two-thirds of what it pays for stations vacating and exiting or vacating and sharing.

But the noncoms told Wheeler a discount for moving to the VHF band—most noncoms are UHF—was "inconsistent with the purpose of the auction, which is to use market mechanisms to determine the value that a broadcaster is willing to accept to relinquish its current channel."

They said the FCC should get rid of the discount and let competition for spectrum set the price for relinquishment.

The discount is because movers, rather than sharers, will still take up 6 MHz of spectrum, albeit in the VHF band. But since that is where stations are being repacked, the more free spectrum there is in the VHF band, the more stations that can be moved from the UHF band and repacked there, and the more spectrum freed up.

But if the FCC decides not to ditch the discount — and it is expected to stick with the pricing differential — the noncoms said it should give them a bidding credit, similar to the credit being offered small businesses in the forward auction of reclaimed spectrum for wireless.

The FCC has said that U-to-V movers will have to pay for their own relocation out of auction proceeds, rather than the $1.75 billion broadcaster relocation fund, the noncoms said, which would make it tough on noncommercial stations that already have "unique financial and organizational challenges," they said.

They said keeping the discount and having to pay for the move would mean the money they collect from donors, and some from the government, would go not to supporting their educational programming but for funding the relocation.

"The public interest would be far better served by allowing NCE [noncommercial educational] stations to fund their relocation using the full, undiscounted value of their UHF spectrum from auction proceeds paid by forward auction bidders."

Noncoms are also not happy with the FCC's decision not to reserve a channel in each market after the auction for a noncommercial station. It points out that there are 30 markets where, if the station decided to sell out, there would be no noncom left. Wheeler is said to have signaled the FCC is also interested in keeping noncoms on the air through a variety of incentives, like sharing, which keeps them in the business and is not discounted, rather than reserving a channel in every market.

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.