FCC 'behind the curve' in attracting broadcasters to auction, says industry rep
If the Federal Communications Commission does not attract enough broadcasters to a reverse auction to sell their broadcast spectrum, the agency will have no spectrum to repack and ultimately no wireless spectrum to auction to carriers.
"2014 will be the year that the FCC either succeeds or fails to attract a sufficient number of TV spectrum sellers to make this auction work. Right now, the commission is very far behind the curve on that," said Preston Padden, executive director of the Expanding Opportunities for Broadcasters Coalition.
"If it does succeed in attracting a sufficient amount of broadcasters it's game on. If it fails, it's game over," said Padden, while speaking Jan. 8 at the Consumer Electronics Show in Las Vegas.
Padden said the FCC has not done enough to communicate to broadcasters the initial price offers they could expect should they participate in the auction.
"They've got to get out to broadcasters now with actual pricing information, so broadcasters can make the decision whether to participate or not," said Padden. "They can't wait until the beginning of the auction to talk about prices because it will be too late. It's going to take time for stations to plan, to get ready to participate in the auction and go off the air."
"They need to stop just talking in happy talk," he said. "Show me the money."
But Gary Epstein, chair of the FCC's incentive auction task force, said it's difficult for a government agency to predict prices.
"Without some hard data or a way for people to judge it's making that very difficult for us," said Epstein.
The FCC doesn't value the station's spectum, he said, the market does. One option the FCC is exploring--although the commission hasn't come to a final decision on using the method--is giving broadcast operators a score for pricing and as a way to pack stations together more efficiently, said Epstein.
"We're interested in spectrum values, we're not interested in the ongoing concern values of existing broadcast stations," said Epstein.
But the broadcasters Padden represents are vehemently opposed to the scoring methods being considered by the FCC. Not only does scoring based on population covered by a broadcaster have nothing to do with the value of a station's spectrum, the FCC is using this arbitrary scoring as a way to reduce payments to broadcasters, argued Padden. As a result, the FCC is driving broadcasters away, he said.
"I would urge my friend Gary Epstein to rein in his brilliant but seemingly clueless economists," said Padden.