Auction Action: Lawsuits, Bidders & Buyers

WASHINGTON—At T-minus 11 days before the official start of the TV spectrum incentive auction: low power wins one, the forward-auction bidder list is out and bidding tokens have been sent to qualifying broadcasters applying to participate in the reverse auction.

The fun started on St. Patrick’s Day when a federal court ruled in favor of Latina Broadcasting of Daytona Beach, Fla. Latina, owner of the low-power TV station WDYB. Latina’s been at odds with the Federal Communications Commission for nearly two years over being let into the auction. Without auction status, WDYB isn’t guaranteed a channel in the post-auction repack.

WDYB, an Azteca America affiliate, also is one of only four TV stations in the United States owned by a Hispanic woman—an example of the type of diversity the commission is supposed to promote with its media ownership regulations.

The FCC initially excluded WDYB from the auction in 2014, reinstated it in June of 2015 after Latina appealed, then booted it from the list again last month in a reconsideration involving other LPTVs trying to get into the auction. FCC Commissioner Ajit Pai wrote a takedown of the decision in his dissenting statement.

In it, he concluded, “It is impossible to reconcile the commission’s ostensible support for promoting diversity with such shabby treatment of one the few television stations in this nation owned by a Hispanic woman.”

The U.S. Court of Appeals for the D.C. Circuit stayed the ruling with respect to Latina, which can now provisionally participate in the auction while the court considers the merits of its appeal.

The issue of auction eligibility is tied to calculations for repacking the TV spectrum after the auction. The commission’s models are based on the list of eligible stations, including those with spectrum it does not need. Those stations are still eligible for a channel in the repack.

In markets where the commission expects to have enough spectrum for both wireless bidders and remaining TV stations, some that are eligible are considered “not needed.” In other words, the auction system has “determined that the station will always have a feasible channel assignment in its pre-auction band at all of the possible auction clearing targets,” according to the FCC’s Reverse Auction Opening Bid Prices Public Notice.

Most of those “not needed” are in smaller markets, such as Grand Junction, Colo., at No.185, and Juneau, Alaska, at No. 207. This is not exclusively the case, however, as even Los Angeles at No. 2 has a “not needed” station, and Phoenix at No. 12, has five.

The Orlando-Daytona Beach-Melbourne TV market in central Florida—the 19th largest in the nation—is one of those where all eligible stations have an opening bid. A total of 23 stations in the Orlando-Daytona Beach-Melbourne TV market in central Florida—the 19th largest in the nation—are on the FCC opening bid list. The high-end opening bids (for full relinquishment) range from $84 million to $344 million for WOPX, an ION full-power station.

Because of the complicated calculations of the repack, the FCC told the court letting Latina back in could delay the start of the auction. When court let Latina back in Thursday, the FCC said on Friday that it would commence March 29 as planned. That is, as long as the court didn’t grant a similar request from Videohouse, a low-power broadcaster in Pittsburgh petitioning the same federal court to be let into the auction.

“Granting Videohouse’s request for a stay or provisional participation will cause substantial delay and resulting harm to the public,” an FCC spokesman said on Friday, the day after the Latina ruling came out.

“Once again, the FCC is saying one thing and doing another,” Videohouse shot back in a letter to Mark J. Langer, Clerk of the U.S. Court of Appeals for D.C. (The court denied Videohouse’s request for a stay after this post was published.)

In the meantime, the court set a hearing schedule for Latina, according to John Eggerton at B&C.

While the legal drama unfolded on March 17, the FCC released a Public Notice indicating it was processing broadcaster applications to participate. The PN said eligible applicants would be receiving a Second Confidential Status Letter, and those deemed complete and with at least one selected station would be given a SecureID auction token that will allow them into the auction system, and directions for the next step in the process.

In order to participate in the auction, accepted applicants will have to commit to a relinquishment option at the opening price for that option between 10 a.m. March 28 and 6 p.m. ET March 29.

The auction wheels continued to turn on Friday, when the commission released the forward auction applicant list—i.e., those in line to buy the relinquished TV spectrum. AT&T, as expected, is on it, as is Verizon, T-Mobile, although AT&T is on a list of 39 “incomplete” applicants out of a total of 104. Eggerton has details on the applicants.