TV Station Owner Says Pause Spectrum Auction

Suggests falling prices will end in spectrum giveaway

The FCC's soon to be Republican majority has been asked to hit the pause button on the broadcast incentive auction and reevaluate its "anemic participation" by wireless providers.

That came in a letter to commissioners Ajit Pai and Michael O'Rielly from TV station owner Max Media chairman Gene Loving.

He says that given President-elect Donald Trump's pledge to reevaluate government programs, they should do the same with the auction.

The fourth stage of the spectrum auction is ending Friday, with wireless companies failing to bid anywhere near broadcasters' exit price in the first three stages, instead simply allowing the clearing targets—how much spectrum is being freed up—to decline and holding to their same price.

"I urge you to consider whether this auction, which was started under the previous administration, will likely end up as 'failed' just as the new commission takes over, leaving the new administration holding the proverbial bag."

He suggested that given the falling prices "there will likely be articles published about how the wireless industry took the federal government for billions of dollars."

Loving cites some of the theories behind that lack of interest in bidding (wireless companies have never moved off their initial bid of about $20 billion) given wireless companies' mantra of a spectrum crisis, including that the FCC held the auction too soon after another spectrum auction or the high-band spectrum it is freeing up, which includes for unlicensed use and does not require bidding for spectrum. He also says auction design flaws are partly to blame. He suggested the FCC "consider jointly announcing a pause in the auction to reevaluate the process and the reasons for the anemic level of participation. It makes no sense to complete the auction at this level."

Currently, the clearing target is 84MHz, down from 126 MHz in stage one.

Steven Berry, president of the Competitive Carriers Association, which comprises wireless providers, dismissed the letter and the call to pause the auction.

“The FCC should take Gene Loving’s request for what it truly is—a ridiculous stall tactic in an attempt to distract policymakers from getting more mobile broadband services to consumer, and as such, the FCC should reject the request without hesitation.  Any delay will violate the law, counter congressional intent and negatively impact auction participants who have spent countless hours and resources planning auction strategies."

As to whether there is still an urgent need for spectrum:

"The entire communications industry is staring down a spectrum crunch in the early days of data-hungry 4G and 5G services, which consumers need and expect, and which require both high-band spectrum and more importantly 'greenfield' low-band spectrum for coverage," he said. "Congress directed the FCC to hold the incentive auction for just this purpose – to voluntarily repurpose underutilized spectrum so wireless carriers can satisfy demands of American consumers, and promote economic growth. The FCC should continue to move forward with the auction as planned for the benefit of competition, economic growth, and all American people.”