SpectrumEvolution.org President Greg Herman thanked the FCC for meeting with Class A television licensees at NAB in Las Vegas, but was forced to add that most of their key questions remain unanswered.
Herman, a Class A owner himself, commented, “We very much appreciated the FCC’s outreach to our Industry and the opportunity to have our very first, face-to-face meeting with the FCC. If the FCC wants us to participate in the VIA, we need to know four basic things, which the FCC didn’t tell us:”
Here are the key questions that Herman say remain:
1. Specifically which stations/markets will be eligible to participate? Is there a market size cut-off?
2. In broad terms, what kind of prices are we talking about? Will we be able to set our own price, or is the FCC going to “score” our stations to reduce their value?
3. If a station is willing to sell, when can it shut down to stop losing money?
4. Most importantly, when will the auction compensation be paid?
Herman and SEO Executive Director Amy Brown both noted that it the vigorous enforcement of public file regulations by the FCC in which it has been stripping as many stations as possible of their Class A status flies in the face of FCC invitations to participate in the process; further, the exploration of a scoring procedure that would cap auction proceeds for Class As was another FCC action that would seem to suppress rather than encourage participation.
“The frustration and anger were obvious,” Herman said. “The strongly worded compliance letters, the freeze and scoring concepts left a bad taste in the mouths of those in the room. Don’t ask us to participate while telling us at the same time that you will disqualify many of us based on paperwork, rather than the real service to the community we provide and that you may suppress the compensation available to those of us who manage to survive.”
Herman concluded, “Until Class A broadcasters know beyond a shadow-of-a-doubt what their opportunities are, including new business models requiring flexible use of their spectrum, it will be nearly impossible for any of them to make a sound business decision about the VIA. The present regulatory uncertainty and lack of transparency clouding the process, in effect, are encouraging stations to stay away, reducing the amount of spectrum available for repurposing. SEO hopes the FCC will follow through with their commitment to continue an active dialog with Class A broadcasters where answers to critical questions will be addressed expeditiously and with clarity.”
RBR-TVBR observation: Herman’s complaints are reminiscent of comments made in RBR-TVBR just recently. Preston Padden said in an Executive Session published 4/10/13 that the FCC’s apparent attempt to cap the amount of money willing participant in the auction can make was only going to convince would be participants into remaining licensed operators.
“Since Congress mandated a voluntary auction,” said Padden, “the FCC needs to do a MUCH better job of promising substantial proceeds for participating stations. And, the FCC needs to stop talking about ‘scoring’ stations based on population covered or enterprise value.”
So what if you gave an auction and nobody came? It seems that skepticism about the auctions is building among the most likely participants. And that cannot be a good thing.