Just How Voluntary Is Senate Spectrum Bill?

Earlier this month, the Senate Commerce Committee adopted a bill (S.911) that would permit the FCC to auction TV spectrum and share the proceeds with broadcasters who give up spectrum.

But the bill’s intent — that broadcasters’ participation in the so-called incentive auctions be voluntary — may be undermined by an amendment that was added by Democratic Senator Maria Cantwell of Washington.

The Cantwell amendment states in part that “84 MHz shall be assigned via a competitive bidding process.” It’s that “shall” that bothers broadcast lawyers and lobbyists. They believe the amendment, if it remains unchanged, directs the FCC to auction 84 MHz of broadcast TV spectrum even if that much spectrum is not voluntarily relinquished.

It’s gotten the attention of the National Association of Broadcasters. “We want to make sure that voluntary stays voluntary,” says Dennis Wharton, NAB’s EVP for media relations. “Any provision that would force broadcasters to involuntarily relinquish spectrum would be strongly opposed by NAB,” he adds.

According to Wharton, NAB is working with Cantwell to “clarify the amendment and to ensure that those stations choosing not to go out of business — along with the tens of millions of viewers that they serve — are held harmless by incentive auctions.”

Some TV lobbyists say that Cantwell’s office has indicated it will fix the amendment. However, they also point out, the senator has so far made no move to do so. Cantwell’s office did not return TVNewsCheck’s calls.

Broadcasters are also hoping that Commerce Committee Chairman Jay Rockefeller (D-W.Va.), the bill’s chief author, will weigh in and revise the language if Cantwell doesn’t.

The Cantwell amendment is not the only language in the bill that needs repair, broadcasters’ Washington reps say.

Another concern is that the FCC is not required to protect sufficiently those broadcasters who choose to hang on to their spectrum from increased interference and loss of service area, says Gerry Waldron, a communications attorney with Covington & Burling, whose clients include the CBS and NBC affiliate organizations.

The interference and loss of service would come, the broadcasters fear, during “repacking” — the process by which the FCC would consolidate large blocks of spectrum for auction by reassigning TV channels.

According to the broadcasters, the legislation should give the FCC specific guidelines to deal with interference issues and establish clearly that a broadcaster’s service area will remain unaffected, says Waldron. “We think the bill needs to be tightened in that regard.”

Broadcasters are also concerned that the bill says only that the FCC “may’’ cover antenna and transmitter costs associated with moving TV stations to new channels following the auction.

“We think the bill gives the FCC too much discretion in terms of determining whether a broadcaster should be reimbursed for expenses incurred due to repacking,” says Waldron.

As now written, the legislation would require the FCC to reassign stations on UHF channels to other UHF channels, which have proven to be far better for broadcasting digital signals than VHF channels.

But broadcasters also want to make sure that stations in the high VHF band (chs. 7-13) are not downgraded to the inferior low VHF band (chs. 2-6).

“We think it would be a bad outcome if as a result of this legislation that a broadcaster with a current high VHF channel be moved to a low VHF channel,” Waldron says.

Broadcasters who are considering giving up spectrum would also like to see some changes. They are concerned that the bill does not specify how the FCC would determine how much of the auction proceeds they would be entitled to.

The bill states only that at least three months before any incentive auction the FCC chairman tell Congress what methodology it is using to determine the value of each licensee.

It also indicates that the agency should take into account the spectrum’s value as it is currently used and how quickly a licensee relinquishes the spectrum.

Broadcasters would like to see stronger language included that directs the FCC to determine immediately how much broadcasters might receive for their spectrum.

“What a lot of broadcasters fear is that they will find out too far down the process that they are only going to get pennies on the dollar,” says Lee Petro, a communications attorney with Fletcher, Heald & Hildreth.

He says the FCC needs to come up with a “valuation process’’ as a first step rather than the last step so that broadcasters can make “educated decisions.’’

Petro says he also has clients that would like to see the bill mandate that the FCC relocate low-power stations in the UHF band to the VHF band as part of the repacking process, despite the inherent weakness of the VHF channels. Current language permits the FCC to move LPTV stations to the VHF band, but it is not a mandatory requirement.

“To the extent that the bill can explicitly state that Class A and low-power television stations shall be protected and shall be included during the repacking process that would make a lot of folks happy,” says Petro.

The NAB has also made clear its desire to see a provision added that would sunset the FCC’s authority to repurpose broadcast spectrum and a ban on spectrum fees.

The Senate bill and a companion House measure that is still being written are not expected to reach the floors of their respective chambers until next year.

However, efforts to tweak the incentive auction language to make it more amenable to broadcasters will take on a new urgency if Congress decides to include it as part of legislation to increase the federal debt ceiling this summer.