Washington

NAB's Smith: Auction Order Threatens Broadcasters

Calls for more congressional oversight of process FCC has produced 6/05/2014 03:43:00 PM Eastern

National Association of Broadcasters President Gordon Smith said Thursday that his association has "deep reservations" about the FCC incentive auction framework order released this week.

He said in a statement that NAB still thinks the auction can be a success, but not if broadcasters are pushed into it through regulatory levers.

"NAB still believes the auction can both be faithful to Congress and be successful," Smith said in a statement. "To that end, however, the FCC must implement policies that truly hold non-participants harmless. But if broadcasters are coerced through unrelated regulatory actions that damage the economics of our businesses - or if auction rules undermine the many public services we deliver today – then the auction ceases to be voluntary, and the balance Congress painstakingly achieved evaporates. Now is the time for the FCC to make good on its repeated promises not to damage a vibrant television business, and for Congress to exercise the proper oversight needed to preserve a free, local and lifeline programming source that is the envy of the world."

Smith did not elaborate on those "unrelated regulatory actions," but NAB has sued the FCC over its actions to limit JSAs and guidance on other sharing arrangements, which NAB has called arbitrary and capricious, and other broadcasters have suggested are a way to kneecap the business so its spectrum will be more valuable on the auction block.

Smith said the incentive auction language, which NAB supported, struck the right balance between repurposing spectrum and holding TV stations harmless, but that the FCC order turns that balance "on its head," and is a setback, not a win, for broadcasters.

The FCC order makes clear that the FCC believes the incentive auction statute gives it great flexibility to decide how to fit broadcasters who stay in business into their smaller spectrum quarters after the auction, including defining the "reasonable" in "all reasonable efforts" to conclude it would be unreasonable to protect broadcasters at the expense of freeing up the necessary spectrum.

The National Association of Broadcasters has said the FCC needed to hold broadcasters harmless in the repack to comport with statute. The FCC disagreed. "[W]e reject NAB’s contention that section 6403(b)(2) of the Spectrum Act is a 'hold harmless' provision that requires the Commission to identify 'extraordinary' or 'truly exceptional' circumstances before altering a station’s coverage area and population served," said the commission.

Smith sees that approach as a fundamental flaw.

"Instead, the majority goes so far as to suggest that the goal of repurposing broadcast spectrum for mobile broadband is superior, rather than equal to, that of maintaining a healthy and robust broadcast industry. Let's be clear: not a single American will know or understand if their wireless carrier adds 10 or 20 new megahertz to its 150-plus megahertz stockpile," he said. "They will, however, be quite angry if they are suddenly deprived of access to local broadcasters' news, entertainment and public safety information as a result of an auction gone awry.”

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