Public broadcasters cannot be required to bid for new channels, even when commercial stations are competing for the same frequencies, federal judges ruled Tuesday.
The decision throws another wrench in the FCC's regulatory machine for auctioning spectrum licenses and casts doubt on the agency's ability to follow through with plans to conduct bidding for four TV stations and two large batches or radio licenses that are pending.
Two weeks ago, the FCC's conduct of spectrum auctions was dealt a major blow when the same court invalidated the agency's seizure and re-auction of 200 wireless licenses from bankrupt NextWave Telecom Inc. The NextWave decision will cost the government nearly $11 billion, the difference between the $4 billion NextWave originally offered to pay and the winners of the second auction. In yesterday's case, the court's ruling casts doubt on the government's ability to auction roughly 600 licenses. About 350 permits are scheduled to go on the block Dec. 5, while bidding for another 250 has not been scheduled. Bidding for TV outlets in Columbia, S.C.; Pittsfield, Mass.; Magee, Miss. And Scottsbluff, Neb., has not been scheduled either.
A three-judge panel for the federal appeals court in Washington found that although the 1997 budget law mandating spectrum auctions was plagued by "inartful drafting," the FCC ignored the clearest reading of congressional intent by requiring public stations to bid for channels on the commercial portion of the band. "The act unambiguously forbids the commission from requiring non-commercial broadcasters to participate in auctions for any channel," wrote Justice David Tatel.
The ruling validates dissents by Commissioner Gloria Tristani and former Commissioner Harold Furchtgott-Roth. "This is another instance where the statute said one thing and the commission tried to do something different," said Furchtgott-Roth, now a visiting fellow with the American Enterprise Institute. - John Eggerton