Wheeler speech at NAB show touts 600 MHz auction benefits for broadcasters
Federal Communications Commission Chairman Tom Wheeler took to the stage at this week’s National Association of Broadcasters event in an attempt to drum up support from television broadcasters to participate in the FCC’s planned 600 MHz auction.
Speaking during a keynote address, Wheeler said broadcasters that agree to participate in the reverse auction process are likely set for a significant financial gain, citing the more than $41 billion in net proceeds generated from the recent AWS-3 spectrum auction.
“The auction confirmed the strong market demand for more spectrum for wireless broadband,” Wheeler said.
Wheeler again stated the auction process was a “once-in-a-lifetime” opportunity for television broadcasters to reap part of that financial windfall, and that participation was on a completely voluntary basis all the way up until final bids for the forward auction part of the proceedings are concluded.
The FCC is set to release a “Procedures Public Notice” that builds on the comments garnered from the previously released “Comment Public Notice” adopting the final rules and auction procedures. Wheeler hinted that those rules would be designed to make broadcaster participation “more accommodating.”
“You decide whether to participate after seeing the opening bid price being offered and you have the flexibility to drop out in any subsequent round,” Wheeler stated.
The FCC also recently circulated a new set of rules that would allow full power and Class A stations to select channel-sharing partners before and after the auction concludes, as well as allowing broadcasters to enter channel-sharing agreements for “fixed terms.”
“We like channel sharing so much, in fact, that we’re proposing to allow channel sharing between stations regardless of whether they participate in the auction next year or not – although those that decide to channel share outside of the auction context will not be able to collect auction proceeds,” Wheeler said.
As for the financial implications, Wheeler countered arguments that the AWS-3 auction drained the wallets of potential bidders for the broadcast spectrum, citing a commitment from AT&T to spend at least $9 billion in the auction tied to its pending acquisition of DirecTV, as well as participation commitments from T-Mobile US and Dish Network.
“And I doubt the only bidders will be the traditional bidders,” Wheeler added.
Some operators remain undecided on the proceedings, citing release of final rules. AT&T and T-Mobile US have recently attempted to use the AWS-3 auction results to back their arguments for the amount of 600 MHz spectrum set aside for carriers with smaller sub-1 GHz spectrum holdings
Sprint CEO Marcelo Claure commented at the recent Competitive Carriers Association Global Expo event that it might make sense for smaller carriers to partner with Sprint in the proceedings, noting that there were rural markets where Sprint had no interest in building out a network just as there were urban markets in which CCA members had no interest.
Wheeler touts broadcaster support
The FCC has spent the past several months reaching out to broadcasters in order to drum up support for the incentive auction process, which is currently scheduled for next year. Wheeler said “hundreds” of broadcasters have privately expressed interest in the auction, as well as public interest from Fox, Ion, Tribune and Univision.
Wheeler did acknowledge the elephant in the room of the lawsuit filed by NAB against the FCC regarding what the association called changes to the rules connected with coverage areas for broadcast licenses.
“A possible bump in the road is a certain lawsuit challenging our rules,” Wheeler said. “But we are hopeful that the court will dispose of that suit in a way that will allow both of us to move forward.”
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