FCC OKs TV Spectrum-Clearing Plan

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The Federal Communications Commission announced final approval Monday of a
plan to clear a large block of television spectrum in a move that could boost
the wireless-phone industry, as well as pour billions of dollars into the
coffers of broadcaster Paxson Communications Corp.

Under the plan, wireless-phone companies are allowed to make payments to TV
stations with licenses in channels 60 through 69 to move them from that band.
The band has about 99 analog- and 42 digital-TV licensees, or 10 percent of all
commercial TV stations.

The FCC unanimously approved the plan Sept. 7, but the agency withheld public
release for 10 days. Commissioner Gloria Tristani -- a Democrat who left the
agency Sept. 7 -- cast a vote in support of the plan in one of her final acts at
the agency.

With 17 analog stations in the 60-through-69 block, Paxson said it controls
at least 10 percent of the spectrum in the band, which some analysts have valued
at between $30 billion and $35 billion based on auction results for similar
spectrum in Europe.

Paxson -- which is 32 percent-owned by General Electric Co., owner of NBC --
could be looking at a $3 billion payday to vacate its analog channels if those
estimates hold up. In contrast, Paxson has a current market capitalization of
$580 million, according to Multex.com Inc.

Reacting to the FCC's decision, Paxson chairman Lowell W. Paxson disagreed
that his company was staring at a huge financial windfall in the range of $3
billion.

'I think the highest amount you are going to wind up getting is a little over
$1 billion -- just us,' said Paxson, who spent more than one year lobbying the
FCC. 'There's a lot of money involved, but I don't believe in my opinion that
you are going to see anywhere near $38 billion' in the auction.

Paxson has hired investment banker Allen & Co. to negotiate compensation
on behalf of a group of TV-station owners in the 60-through-69 band and to
arrange time frames for vacating the spectrum. Paxson said his company could
vacate as early as 2003.

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