Padden Shutting Down Spectrum Coalition

The Expanding Opportunities for Broadcasters Coalition, created to help shape the rules for the FCC spectrum incentive auction and advocate for auction participation, is dissolving rather than face running afoul of anti-collusion rules that kick in later this fall.

In a conference call Monday morning, EOBC executive director and co-founder Preston Padden said that, in addition to avoiding collusion, the coalition was disbanding because it had achieved key objectives for broadcast-friendly auction rules.

Among those objectives: persuading the FCC to issue advance price guidance to broadcasters through the Greenhill report and to liberalize channel sharing rules; working with the NAB and others to convince the FCC to drop dynamic reserve pricing for spectrum; and persuading the commission to include a station’s interference profile in the starting price formula.

On the last item, Padden acknowledged that the EOBC “failed to convince the FCC to use a 100% interference formula.”

The anti-collusion rules, which kick in once a broadcaster registers for the auction and remain in effect until the auction is completed, are intended to prevent participants from sharing strategic information that could effectively manipulate spectrum prices.

The EOBC wanted to avoid putting its 87 members at risk of possibly violating those rules.

“The legal advice we got told us that we could keep the coalition going if we put in place very strict anti-collusion guidelines,” Padden said. “But the better decision was to dissolve.”

Some broadcasters, including Sinclair Broadcast Group, have strongly opposed the auction. Sinclair and the NAB sued to halt the auction over what they called the commission’s failure to protect coverage areas and populations served by stations that choose not to participate in the auction.

In June, an appeals court rejected those lawsuits.

The NAB has grudgingly accepted the auction, while Sinclair has signaled it intends to retain its spectrum for deployment under ATSC 3.0.

Padden hinted that Sinclair may end up participating in the auction. “I expect that one company that went to court over the auction is going to be a very active participant,” he said.

Padden rejected the notion that Sprint’s decision not to participate and some financial analysts increasing resistance to the auction argue for the EOBC’s continued advocacy. Similarly, he also rejected the premise that FCC Chairman Tom Wheeler is bent on emasculating the broadcast sector as some contend.

“The statute that established this was passed long before Wheeler came to FCC,” Padden said, adding that the auction represents “enormous opportunities for broadcasters who are going to go home with many tens of millions of dollars. Many of those receiving those payments will continue to be very active broadcasters.”

Padden praised the FCC’s handling of the auction as “more transparent and open than anything I’ve seen in 40 years around the FCC.”

In a press release announcing the Sept. 30, 2015, dissolution, Padden thanked coalition members, attorneys and the FCC: “The 87 station members of EOBC are indebted to many people including the following:

• Chairman Wheeler and the FCC commissioners who directed a remarkably open and transparent proceeding;

• Members of Congress and congressional staff who passed the auction statute;

• FCC Staff including Gary Epstein and Howard Symons who provided all stakeholders with unprecedented access to the process of devising the auction rules;

• Dick Bodorff and Ari Meltzer of Wiley, Rein for their legal advice;

• Bryan Tramont for creating our coalition;

• Peter Cramton and Jeff Eisenach and their colleagues for their economic advice;

• NAB Officials Rick Kaplan and Patrick McFadden for their open communication and constructive help;

• Colorado Law Dean and former White House Official Phil Weiser for his early intellectual leadership on the auction;

• Former National Broadband Plan Chief Blair Levin for embracing the auction plan.

“Personally,” Padden added, “I thank the four founding members of EOBC who spent countless hours on conference calls directing our advocacy and managing organizational issues. 

“And, finally, we would like to thank former NAB executives Eddie Fritts, Jim May and Jeff Baumann who, in 1996, quietly secured Communications Act amendments that assured that broadcasters surrendering spectrum would be compensated.”

Padden said he intends to focus on his role as a grandfather to three grandchildren with a fourth expected this fall.