FCC's Pai: Marketplace Should Set Value of Auctioned Broadcast Spectrum

Also Plans to Tell Congress FCC Should Not Limit Participation

FCC Commissioner Ajit Pai plans to tell Congress Wednesday that the FCC should not set reserve prices in the broadcast incentive auction based on how many viewers a station has or its value as an ongoing broadcast operation. 

"The prices paid to broadcasters should be determined by the auction process, not by government fiat," he said in prepared testimony for a Senate Appropriations subcommittee hearing on the FCC's budget. Pai and the other commissioners are witnesses at the hearing.

The Expanding Opportunities for Broadcasters Coalition (TV stations pondering selling their spectrum), led by Executive Director Preston Padden, has been arguing that the FCC could discourage broadcasters from participating by paying larger stations more than smaller ones, or "scoring" them on size or audience or population when the value of a station's spectrum to the government should instead be how it affects other stations in the repacking process.

Pai also plans to tell the subcommittee that the FCC should not limit wireless company participation in the forward auction, another point Padden and the coalition have been making as well. "A contrary approach will distort not only who may purchase spectrum, but also how much spectrum will be available for auction," says Pai. 

The FCC is considering modifying its spectrum screen, the threshold of spectrum holdings by any one company in a single market. It is not a cap, but exceeding the threshold triggers additional FCC scrutiny of those holdings. Lowering the screen could affect how much spectrum large companies like Verizon and AT&T could bid for in the auction.

Pai also plans to talk about a number of other key FCC issues, including promoting infrastructure investment, permitting IP transition geographic market pilot program tests--which AT&T has asked for--reforming the E-rate program and FCC process reforms like shot clocks and deadlines, which he supports.