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Fox, Others Meet With Wheeler About Auction - Broadcasting & Cable

Fox, Others Meet With Wheeler About Auction

Ion, Tribune, Univision and Fox execs discuss their options
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FCC Chairman Tom Wheeler met Feb. 4 with representatives of four major broadcast groups--Fox, ION, Univision and Tribune--interested in giving up spectrum under the right incentive, as it were, while staying in the business.

That is according to an ex parte notice of the meeting filed with the FCC late Friday.

They are among the first major groups to officially declare their interest--they were not required to identify themselves in the ex parte, but did.

In separate meetings with the chairman and top commissioner staffers, Jack Abernethy, CEO of Fox Television Stations., Brandon Burgess chairman and CEO of ION Media Networks, John Eck, executive VP of technology, operation and engineering for Univision Communications, and Edward P. Lazarus, executive VP and general counsel of Tribune, made it clear they were interested in offering up spectrum at the right price and under the right conditions. But they also made it clear they were planning to stay in the business, which would mean either sharing spectrum--the more likely option that provides the biggest payout--or moving from UHF to VHF channels.

Abernethy and Burgess are members of the National Association of Broadcasters TV board so the meeting also puts an exclamation point on NAB's pivot from an early, aggressive focus on stations not putting spectrum into the auction, to ensuring the auction is fair to both those who are not participating and those who may want to give up some spectrum and stay in the business by channel sharing, a pivot in part thanks to some encouragement from the above-referenced groups, according to broadcast sources.

The execs told Wheeler that "they are working with other broadcasters to bring about constructive industry engagement on these matters and on auction issues more generally."

Wheeler and NAB President Gordon Smith talked by phone the day after the meeting about their shared goal of a successful auction, according to a copy of an ex parte filing by NAB.

The document said the execs "explained that, as established broadcasters with deep ties and abiding commitments to their communities, they assign high value to their existing businesses and operations, and they intend to continue to serve their viewers with the same high level of service following the conclusion of the incentive auction."

Therefore, they said "their evaluation of whether and how to participate in the incentive auction necessarily depends on the adoption of clear and effective rules that maximize the value of the potential opportunity for all broadcasters."

They pointed out that they collectively represent stations that amount to more than 5 billion MHz pops of broadcast spectrum (the FCC values spectrum using the "per pop" measure), including in markets where wireless demand is high.

Their terms for participation: The FCC needs to state that it is aiming for a 126 MHz clearing target (NAB has previously fought setting the target that high); it needs to provide more transparency" about dynamic reserve pricing; and it needs to "enhance" opportunities for channel sharing, including allowing stations to strike sharing deals after the auction, rather than requiring those deals to be done beforehand.

They said the success of the AWS-3 auction was an argument in favor of making the auction as simple and clear as possible in terms of pricing and participation.

The meeting came only days before the FCC is planning to launch a months-long informational road show--the first session in Philadelphia Feb.
9--armed with new auction information. Those meetings will include three seminars in New York next week. The FCC has already been meeting privately with broadcasters to walk them through the process.

FCC officials briefed reporters on those meetings Friday--which will be closed to press to protect the identities of stations who do not want to signal their interest.

The Expanding Opportunities for Broadcasters Coalition has been the lead group representing stations willing to participate in the auction at the right price and under the right conditions.

"We are delighted to see the cavalry coming over the hill to assure a successful auction," said EOBC Executive Director Preston Padden.

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