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Unlucky 7 for 700 MHz

Seventh auction delay to leave broadcasters spectrum, not cash 8/04/2002 08:00:00 PM Eastern

The FCC dealt a fatal blow to Bud Paxson's hopes for finally realizing a buyout windfall from the early return of licenses to 19 TV stations he operates on channels 60-69.

On July 26, the FCC said it would delay the scheduled Jan. 14 auction of spectrum now used for those channels, which are located on the upper portion of the 700 MHz spectrum band. A new date for the bidding hasn't been announced. Currently there are roughly 140 broadcasters with stations or allotments there.

The delay is the seventh postponement of plans to sell the block of channels and follows a decision six weeks ago to delay bidding for another block of spectrum used for chs. 52-59, where broadcasters hold another 323 allotments.

A representative for the Spectrum Exchange Group, which plans to broker deals between broadcasters and auction winners, would not comment on their next course of action. A Paxson spokeswoman said company officials were "disappointed" by the delay but "hopeful that the FCC would come up with a plan that will work."

Both channel groups are slated for new mobile Internet, wireless communications or digital video services.

A small portion of the 52-59 block, known as the C and D blocks, will go on sale Aug. 27. The FCC has until next June to reschedule bidding for the remaining spectrum.

Prodded by the wireless industry, the FCC has repeatedly delayed the ch. 60-69 sale, and in June Congress, concerned about broadcasters' getting a windfall from public spectrum and by the lack of a clear business plan from the spectrum's potential new occupants, removed a statutory deadline requiring auction of 700 MHz spectrum by the end of this year.

Wireless providers have balked at the prospect of paying out perhaps billions of dollars on top of the money they would pay the government for rights to use the licenses into the future. With no pressure to bargain with the incumbent broadcasters, they now have more time to lobby Congress to squelch the early buyout rules.

Although Congress ordered the FCC to delay the June 19 sale of chs. 52-59, lawmakers left it to FCC Chairman Michael Powell to decide whether to postpone bidding for chs. 60-69. One senior aide had predicted a delay (B&C, July 1).

The decision to delay nearly all bidding is a big blow to Paxson, who has been eyeing potentially lucrative buyouts from winners of the spectrum. The Paxson-led Spectrum Clearing Alliance, composed of stations with TV outlets on the 60-69 band, unsuccessfully lobbied the FCC and Congress to keep the latest auction plan on track.

Broadcasters operating on the 700 MHz band are not required to exit until the transition to digital television is complete, which could wind up being years beyond the current 2006 target date. To clear the spectrum quicker, the FCC permits auction winners to pay the broadcasters to relinquish frequencies.

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