NAB: UHF Discount Should Be Looked at Holistically

Says stand-alone approach, or attempt to push broadcasters into auction would be illegal
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The National Association of Broadcasters has told the FCC that it needs to consider changing the UHF discount outside of a proceeding that looks more broadly at the national TV ownership.

Under FCC chair Mignon Clyburn, the commission proposed to eliminate the discount given that in the digital age UHF stations are now more robust than VHF, a reversal of fortune from the analog days. The UHF discount means that TV station ownership only has to count one-half of the audience reach of those stations toward the 39% national ownership cap.

In reply comments at the FCC, NAB said that, without regard to what the FCC ultimately decides, it needs that broader look to comply with procedural requirements under the Administrative Procedures Act (9 APA), which is essentially the regulatory agency code of conduct.

NAB also warned the FCC not to go along with a suggestion by some wireless carriers that removing the UHF discount would be a good tool in prying spectrum from broadcaster hands for the incentive auction.

The Competitive Carriers Association—essentially the wireless carriers other than Verizon and AT&T—made no bones about why they thought the FCC should jettison the discount. "[The discount] has the potential to discourage robust broadcaster participation in the upcoming 600 MHz incentive auction," they said in their initial comments. "CCA has a keen interest in ensuring that broadcasters are incented to participate in the reverse auction, so that the maximum amount of licensed spectrum is made available for wireless broadband services through the forward auction."

"The suggestion that this would be a lawful rationale for modifying the UHF discount—or any other FCC rule—should be rejected out of hand. Such an approach would be contrary to the statute authorizing the incentive auction," NAB said.

NAB argues that if Congress had wanted the FCC to regulate broadcasters off their spectrum, it would have said so.

"If Congress had intended the Commission to create a regulatory environment inhospitable to broadcasting so as to recruit auction participants," said the trade group, "it would have directed the Commission to do so. Rather, Congress directed the Commission to develop a voluntary auction that preserved the coverage area and population served by each remaining full power and Class A television station."

NAB also said that approach would be an arbitrary and capricious violation of the APA because it "fails to analyze whether the underlying purposes of the UHF discount and the national ownership cap would be served by changes to these standards."

Actually, CCA wants the FCC to look at all its broadcast regs with an eye toward incentivizing broadcasters to clear out. It said the FCC should consider "how the existing rules and proposed reforms would affect broadcast stations’ incentives to relinquish spectrum in the upcoming 600 MHz incentive auction and adopt reforms in light of that vital consideration."

NAB was having none of it. "Congress did not intend that voluntary decision to be influenced by an artificial diminution of the broadcasting business through regulatory changes, and, thus, any FCC rule changes based on such reasons would be arbitrary and capricious," broadcasters said.

In a blog posting, Rick Kaplan, NAB executive VP of strategic planning and former acting chief of the FCC's Wireless Bureau, called the CCA pitch "desperate, specious and irresponsible."

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