NAB’s Kaplan To Wheeler: Do No Harm

FCC Chairman Tom Wheeler should publicly vow that the agency won’t crack down on broadcast regulations to spur broadcasters to participate in the commission’s incentive auction next year, Rick Kaplan, National Association of Broadcasters EVP, said Wednesday.

“It would … be a welcome sign to see the chairman publicly affirm that the commission, under his watch, will in no way take actions to harm broadcasters in unrelated proceedings to encourage participation in the auction,” said Kaplan, in a blog published on the association’s website.

“Not only would such actions be unlawful, they would be bad policy,” Kaplan added.

In his blog, Kaplan did not specifically cite which FCC proceedings have triggered NAB’s concerns about the potential for agency foul play.

Wheeler had no comment on Kaplan’s remarks, according to an FCC spokesman. But Wheeler has made clear that the success of the auction, which is intended to repurpose broadcast spectrum for smartphones and other wireless services, is one of his top agency priorities.

Sources said one of the FCC’s pending proposals that provides Wheeler with “room for mischief” would eliminate the agency’s UHF discount — a long-time loophole in the agency’s ownership rules that some broadcasters have been relying on to help them beef up their station portfolios. Eliminating the discount could hurt station values.

The discount basically allows broadcasters to count UHF stations in their portfolios as reaching only half the homes in their markets, while the VHF stations in their portfolios count all homes in the market toward the FCC’s national ownership cap. The cap bars broadcasters from owning TV stations reaching more than 39% of the nation’s TV homes.

In public comments at the FCC, the Competitive Carriers Association, which represents wireless companies, urged the agency to eliminate the discount because it “has the potential to discourage robust participation” in the auction.

Said Kaplan, in a Jan. 13 blog post: “In plain English, CCA expressly asked the FCC to strong-arm broadcasters into participating in the wholly unrelated voluntary broadcast spectrum incentive auction. CCA’s theory is that if the FCC takes actions that affirmatively harm broadcasters, more broadcasters will participate in the voluntary auction, and then CCA’s members will have access to more spectrum than they would have otherwise….

“The filing would be downright funny if it wasn’t so desperate, specious and irresponsible,” Kaplan added.

In a statement of response, CCA President-CEO Steven K. Berry said: “To suggest there is no connection between broadcast regulatory policies and their influence on the upcoming incentive auction is nonsensical…. If broadcasters really want to be free of the regulatory burdens they claim to be burdened with, the wireless industry is more than happy to purchase their spectrum for billions of dollars.”

Wheeler, a former lobbyist for the wireless industry, also recently put a hold on station sales applications that include shared services agreements — in the wake of his announcement earlier this month that the agency intended to beef up scrutiny of SSAs.

Station transactions that include shared services and joint sales agreements, which allow broadcasters to save money by combining key operations, have been routinely approved by the agency in the past. Tightening the SSA policy could hurt station values.

The FCC staff is slated to update its timelines for the incentive auction during an agency meeting in Washington on Thursday.

In his blog, Kaplan urged the agency to address substantive issues of concern about the auctions for broadcasters, along with the timelines.

“If there was ever a time the commission needed to develop trust with broadcasters, that time is now,” Kaplan said. “Our participation in all phases of the auction is essential to its success.”