Hill blocks 700 MHz auction

MSTV, wireless companies notch victory over Spectrum Clearing Alliance

The wireless industry and top lawmakers last week scored a win over a handful of broadcasters by pushing through legislation that postpones indefinitely a government auction of TV spectrum.

The sale, part of which was scheduled to begin last Wednesday, was highly controversial. In fact, this was the seventh delay. Working against it was the wireless industry, which doesn't want to pony up the big bucks broadcasters may demand to exit early from the spectrum. Likewise, many in Congress aren't too keen for broadcasters to reap potentially huge profits for relinquishing spectrum they got for free. In addition, there were broadcaster concerns about interference from dislodged stations relocating in the lower band.

After a down-to-the-wire battle, both houses of Congress voted on June 18 to postpone the June 19 bidding for spectrum currently used for chs. 52-59 as well as the planned Jan. 14 sale of frequencies now used for chs. 60-69. President Bush signed the measure the next morning.

The vote was also a lobbying coup for digital-TV trade group Association for Maximum Service Television because the statute also bars the FCC from easing interference protections for broadcasters that, vacating analog channels early, wanted to use their digital allotments for analog broadcasting.

Broadcasters operating on chs. 52-69 are not required to exit until the transition to digital television is complete, which could be years after the 2006 target date. To clear the spectrum quickly, the FCC allows auction winners to pay for early-buyout deals worth perhaps billions to roughly a dozen station groups. Stations that give up their analog channel in a buyout are permitted to use a remaining digital allotment in the chs. 2-51 TV core for analog operation.

MSTV has argued that allowing TV stations to use digital allotments for analog broadcasts would create interference havoc because coverage footprints for the two services differ substantially. "They can still make the switch, but not if they produce interference for their neighbors," said MSTV President David Donovan.

"This sends a clear message," added LIN Television lobbyist Greg Schmidt, "that new interference won't be tolerated as a way to clear spectrum."

The interference restriction also may dim the hopes of Bud Paxson and other broadcasters in the Spectrum Clearing Alliance for winning lucrative early buyouts to clear the 60-69 band. Although the delay already gave the cellular industry more time to work with Congress to eliminate the early-buyout rules, the interference protections appear to greatly reduce Paxson's opportunities to squeeze his 19 analog operations in the upper TV band into lower channels.

Paxson officials said that they were disappointed by the postponement but that they did not have time to determine whether their ability to strike band-clearing deals had been hampered.

Auction of a sliver of the chs. 52-59 band known as the C and D blocks was permitted to go forward between Aug. 19 and Sept. 19. The C block contains chs. 54 and 59 and will be sold as two-way licenses, each covering one of 734 metro or rural areas. The D block contains ch. 55 and will be sold as six licenses, each covering one large region of the country.

The FCC must say within a year when it will reschedule bidding for A, B and E blocks.

FCC Chairman Michael Powell had been reluctant to stop the entire sale without explicit orders from Congress. The sale of the 60-69 block had already been delayed six times from its original May 10, 2000, date.

Rep. John Dingell (D-Mich.), the Commerce Committee's ranking Democrat, offered surprising honesty about Congress's 1997 role in setting "asinine" auction deadlines based on eagerness to raise government funds. "The budget committees commandeered management of the nation's airwaves," Dingell said. "Today, we take back the reins and restore rationality to the process. I look forward to the FCC establishing an intelligent spectrum management policy."