Editorial: Strike theRed Flags

Was the decision to pick Auctionomics as one of the three consulting firms charged with designing the spectrum-incentive auction plan the best way to encourage broadcasters to participate in a voluntary auction?
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As FCC chairman Julius Genachowski prepared to speak at the National Association of Broadcasters convention in Las Vegas on April 16, B&C asked broadcasters to come up with some questions they would like straight answers to. Not surprisingly, the topic of spectrum came up a lot.

The FCC is preparing to vote on a framework for channel-sharing at its April 27 meeting, which could give broadcasters a glimpse of what the commission has in mind. But with Congress directing the FCC to grant must-carry status to each broadcaster that agrees to share a 6-Mhz channel that previously hosted one station, there is unlikely to be a big red flag in that initial move.

One thing that could raise a red flag, big-time, is if the commission decided in the April 27 meeting to grant co-primary status to wireless broadband service, which will almost certainly be sharing the reclaimed band. It is our understanding from sources that, thanks to some good points raised by the NAB, the item does not now contain that designation, though nothing is set in stone until the actual vote. The FCC voted unanimously in November 2010 to propose co-primary status when it took its first formal step toward spectrum reclamation, but that was before the agency actually got the incentive-auction authority from Congress that would allow it to proceed—authority that did not come until earlier this year.

This is not time for the FCC to send the signal to broadcasters that the even more cramped quarters they are looking to move them to are not their own, so the FCC got that one right.

Which leads us to a question of our own: Was the FCC’s decision a couple of weeks ago to pick Auctionomics as one of the three consulting firms charged with designing the spectrum-incentive auction plan the best way to encourage broadcasters to participate in a voluntary auction?

At least publicly, there has not been a lot of interest expressed by broadcasters to sell out. Admittedly, Auctionomics has plenty of auction expertise to tap, and leading the advisory team as chairman is Paul Milgrom, a professor at Stanford University who is a member of the National Academy of Sciences and the advisor on the FCC’s first spectrum auction.

But a check of the Auctionomics Website shows that among the members of the company’s threeperson board of advisors is none other than former FCC chairman Reed Hundt, Genachowski’s former boss, and Hundt has suggested that he has had it in for broadcasters for almost two decades.

Broadcasters are still smarting over a speech Hundt gave at Columbia University in March 2010, just days before the FCC proposed the incentive auctions in its National Broadband Plan (to view a video of the speech, visit broadcastingcable.com/April16). Hundt explained at the time that, as far back as 1994, he and “some of the people who are now running the FCC” had decided that the Internet should be the common medium of the nation, and broadcasting “should not be,” in part because broadcasting had become, he said, a “threat to Democracy.” Hundt said it was government’s inevitable role to determine what the national medium would be.

Hundt went on to say spectrum auctions would be a way to shrink the amount of spectrum broadcasters would be able to use, a reverse from the days when government was trying to help broadcasters thrive in the transition from analog to digital. Hundt also said he did “a lot of things” when he was at the FCC to make all that broadcast non-thriving happen, including trying to delay the transition to HDTV.

A word of caution to the FCC: That speech raised, and continues to raise, big red flags with broadcasters as they wait to see how the FCC structures the incentive auctions that will determine just what kind of future the FCC has in store for them.

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