Representing Broadcasters and True Incentive Auction Success

At last week’s Senate Commerce Committee hearing on “Crafting a Successful Incentive Auction,” the executive director of the Expanding Opportunities for Broadcasters Coalition (EOBC) sounded the alarm that the Federal Communications Commission’s (FCC) upcoming incentive auction was on the path to complete failure. The reason? The FCC is allegedly not moving fast enough to inform broadcasters exactly how much money the agency plans on shelling out for their spectrum licenses and that the agency may be considering reverse auction rules that approximate the actual value of spectrum licenses. He concluded that anything that gets in the way of paying broadcasters handsomely for their spectrum licenses is going to lead to auction catastrophe.

Let me ease your minds: There is no cause for alarm. The sky is not falling. Broadcasters are patient, digesting what emerges from the FCC and recognize that this is a long, complex process.

The National Association of Broadcasters (NAB), along with the Association of Public Television Stations (APTS), represents the true interests of all broadcasters. Our aim is to serve America’s local broadcasters and to expand their opportunities in the 21st century, whatever they might be. We have members who will continue broadcasting for decades to come and others that may look to the incentive auction as an opportunity to exit the business after a long history of serving their communities.

The EOBC, while apparently made up of companies that hold licenses in the broadcast band (its membership list is a closely guarded secret), does not represent broadcasters. In many respects, this group seems to stand in stark contrast to what is in the best interests of broadcasters and broadcasting. Its mission is singular: to capitalize on regulatory arbitrage. Its aim is to make sure that its members are paid as much money as possible and paid as quickly as possible for their spectrum licenses. 

While there is nothing wrong with having one’s own interests at heart, we must take the comments of this coalition in that context. This context explains why, as opposed to NAB, APTS, as well as the representatives of wireless companies and associations, cable companies and associations and public interest groups, the EOBC is not concerned with the resulting 600 MHz band plan, how international coordination impacts the future of television, interoperability, co-channel interference, or any other issue beyond how much they get paid and how quickly. The day their checks are cashed, their engagement in this auction ends; the EOBC has no interest in the subsequent repacking or consumer welfare.

The FCC staff is working hard to solve dozens of challenges in this extremely complicated auction. The agency is not close – nor should it be at this point – to determining starting prices in markets or even to confirming which markets are eligible for auction. These are very difficult questions among many others that need to be sorted out over time.

If done right, the FCC will make it as easy as possible for willing broadcasters to participate in the auction. In practice, this means ensuring that broadcasters understand the rules of the road and that their participation does not require an army of economists or mathematicians. There should be low barriers to entry. The process will take time, and in all likelihood will require the cooperation of those such as NAB and APTS, that truly represent broadcasters. These broadcast advocates want to weigh the potential benefits of participation, not just quick-hit investors looking to turn a quick profit because of the government’s unique offer to buy back licenses.

NAB has been engaged with the FCC to ensure the auction’s success and viewer protection from start to finish. Success for us includes, but goes far beyond, those looking to profit on their licenses. So, when Congress, the FCC and the public ask where broadcasters stand, and how can we ensure success for the auction – both for participants and non-participants – they should look to NAB and APTS. These associations represent America’s television broadcasters – not just companies that happen to hold licenses – and are focused on both the short- and long-term success of the industry.