Auction delay, take four
-- Broadcasting & Cable, 2/5/2001
Bud Paxson says he lost a battle last week but won the war over the auction of TV channels 60-69. Sure, over Paxson's objections, the FCC for the fourth time delayed the pending sale of spectrum now used for TV channels located on the 700 MHz band. (The bidding is now scheduled to take place Sept. 12.)
But the owner of Paxson Communications and 18 of the 138 stations on the band says the delay, coupled with a previous agency decision allowing incumbent stations to negotiate lucrative early buyout deals with spectrum winners, will give the broadcasters a much needed source of cash to fund their digital TV rollouts.
"There's now a great movement to put in a band-clearing effort close to the September auction," Paxson says.
Paxson says he is trying to convince other broadcasters on the band to set up a private "pre-auction" in August before the government puts the spectrum on the block. The preliminary bidding would give winners the right to spectrum prior to 2006, the earliest date incumbent broadcasters would have to give up their frequencies.
Paxson and a few other stations groups, such as Shop at Home, each conceivably could demand several billion from the wireless companies that are expected to bid on the 700 MHz spectrum. Paxson notes that many of those same companies ponied up $17 billion for personal communications service licenses on spectrum generally considered inferior to the 700 MHz band.
Verizon Wireless requested the latest delay, arguing that bidders will have a difficult time assessing the value until they know how much it will cost them to remove broadcasters. The bidding previously was rescheduled from March 6. Initially, the bidding was slated for May 10, 2000 but has been repeatedly postponed at wireless companies' urging.
TV stations on the band now aren't obligated to leave the spectrum until 85% of homes have digital TVs and no sooner than 2006. Paxson had argued that the auction should be held as soon as possible so that TV stations can use their early buyout money to fund the DTV changeover.
