Padden: 120 MHz Is Readily Recoverable If FCC Gets Auction Right

Will Tell Congress That Key is Making Auction as Attractive to Stations as Possible

The FCC's biggest challenge is to ensure that broadcasters can make enough out of an incentive auction to want to give up spectrum. If the commission doesn't get that part right, the current debate over band plans and what wireless carriers can bid for spectrum will be moot.

That is the message from Expanding Opportunities for Broadcasters Coalition executive director Preston Padden, according to a copy of his prepared testimony for an auction oversight hearing in the House Communications Subcommittee slated for July 23.

According to Padden, his coalition comprises 70-plus stations willing to offer up spectrum under the right conditions -- under the auction rules, those bidders do not have to identify themselves.

Padden argues that with sufficient incentive, the FCC can reach in initial target of 120 MHz of spectrum. Without it, "the auction will fail at its inception and there will be no need to debate other issues such as band plans and wireless carrier eligibility," he says.

Padden says the FCC should not try to limit the payout to broadcasters -- by "scoring" stations based on population coverage or other factors.

He also warns the FCC that broadcasters need more information about the auction design. Padden says that that "information vacuum" could disrupt the auction.

Padden puts in a plug for a variable band plan so that if there are areas along the border with Canada and Mexico where the FCC can't recover 120 MHz, "those markets should not artificially restrict the transfer of spectrum and the corresponding incentive auction revenues in the rest of the country."

Padden argues that the FCC should not require a station that wants to relinquish spectrum and share with another station to only do so if that other station reaches the same city of license. "The FCC should allow Stations to 'channel share' with any other Station in their DMA and to change their city of license to match the host sharing partner," he says. 

He also says the FCC should hold the auction in 2014 whether or not it has resolved those border issues, and should not limit the participation of any wireless carriers. The FCC is considering modifying its local market spectrum screen, which could potentially limit the participation of larger carriers like AT&T and Verizon. "Concerns about market concentration should be left to another proceeding, on another day," he says, "especially given that such concerns may well have been obviated by the recent dramatic marketplace strengthening of Sprint and T-Mobile."