There’s No Place For Fear In A Voluntary Auction

A disturbing notion surfaced at the 2015 ATSC Television Conference last week in Washington, D.C.

It went something like this: Broadcasters better hope for and work towards the success of the FCC spectrum auction, otherwise the government may come back again with another auction and simply take the spectrum it wants.

Erik Moreno from Fox was quite direct about it during a panel session. “The government is saying it wants us to continue to be in business. The auction is a once-in-a-lifetime opportunity. If it fails, it could force us off air.”

Jimmy Goodmon Jr. from Capitol Broadcasting subtly expressed concern over the prospect of a future auction during same panel. “If there was a law that this wouldn’t happen again in my life, I’d be OK with the auction and repack after ATSC 3.0,” he said.

Other broadcasters I spoke with attending the ATSC event later told me they agreed that if the FCC fails to secure its clearing target of 84-120 MHz that it might seek and get new authority for a mandatory auction.

But hold on  a second. Does anyone remember this?

“NUMERICAL LIMITATION ON AUCTIONS AND REORGANIZATION — The commission may not complete more than one reverse auction under subsection (a)(1) or more than one reorganization of the broadcast television spectrum under subsection (b).” (emphasis added) – Middle Class Tax Relief And Job Creation Act of 2012.

Or this?

“… These imperatives are balanced with the recognition that we have but one chance to get the incentive auction right. The Task Force, my fellow commissioners, and I will spare no effort to ensure that the incentive auction not only delivers the anticipated benefits to the American people, but also serves as a model for countries around the world.” (emphasis added) — Thomas Wheeler, FCC chairman, Dec. 6, 2013.

Or this?

“We have one chance to get this right. Congress granted the commission the authority to conduct one broadcast incentive auction—an auction that each of us has recognized is
unprecedented in concept and complexity.” (emphasis added) — FCC Commissioner Ajit Pai, May 17, 2013.

I approached Richard Wiley of the Washington, D.C. law firm Wiley Rein following a panel he moderated with Gordon Smith, NAB president-CEO; Michael Powell, NCTA president-CEO; and Gary Shapiro, CEA president-CEO.

I wanted to know if the former FCC chairman thought broadcasters have cause to worry. After all, I said to him, Congress had only authorized a single voluntary auction.

“That’s under the current auction procedure,” said Wiley. “They could have another auction, but one without any advantages claimed to broadcasting…. But the nice thing about it is that it [the current auction] is voluntary.”

But how voluntary is this incentive auction if broadcasters make decisions about giving up some or all of their 6 MHz not simply based on dollars and cents but also upon the added elements of fear and uncertainty?

To be truly voluntary, at least to my way of thinking, requires the choice to participate or not being made freely, not a decision come to under an implicit threat.

Perhaps those broadcasters fearful of what might happen if the FCC doesn’t get the spectrum it wants should remember what Rep. Greg Walden (R-Ore.), chairman of the House Energy and Commerce telecom subcommittee was quoted as saying June 6, 2011, in The Hill:

“Any incentive auction in which a licensee forfeits spectrum rights must be voluntary. This is not only good spectrum policy, it is good economic policy. Incentive auctions help match willing buyers and willing sellers. If a broadcast station values its spectrum more than a potential wireless broadband provider is willing to pay, the station will not be forced off the air.”