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Broadcasters Coalition argues FCC’s scoring system for auctions could negatively affect spectrum sales

Population coverage and station value should not be considered the only criteria for the upcoming spectrum auctions, a group of broadcasters told the FCC last week.

The Expanding Opportunities for Broadcasters Coalition, a group interested in selling their broadcast licenses in the auction, warned the commission that their proposal to “score” stations before the auction is “driving broadcasters away” from the auctions.

“It is universally acknowledged that widespread broadcaster participation is the indispensible key to a successful auction,” the coalition wrote. “The Commission’s proposal to manage the prices paid to broadcasters by ‘scoring’ stations is driving broadcasters away from the auction. And, the ‘scoring’ plan is inconsistent with the Spectrum Act, which provides for the prices to be received by broadcasters to be determined by the market forces of the auction, not by FCC ‘scoring.’”

Under the statue, passed last year by Congress, the prices to broadcasters are to be determined by the interplay of the demand for spectrum by wireless carriers; the bids of a participating station and the bids of other broadcasters, the group told the FCC.

“The only other factor relevant to the prices received by broadcasters is the spectrum preclusion effect of any station or, stated another way, how buying a particular station advances the Commission’s mission of clearing spectrum for wireless,” they wrote. “If constructed properly, the Commission’s repacking algorithm automatically will account for the preclusion effect of each station. Any additional ‘scoring’ is totally unnecessary and severely contrary to the goal of attracting broadcaster participation in the auction.”

The auction plan does not contemplate any role for the opinions of the FCC staff regarding the value of individual stations or classes of stations, the broadcasters said.

“Stated another way, Congress did not pass a law providing for broadcasters to be paid prices determined by (the) FCC staff,” the group wrote.

The coalition, headed by former broadcast executive Preston Padden, said stations should be paid based on the value of their spectrum, not the value of their business. Some stations, he said, are already rethinking their plans to participate in the auction based on the scoring proposal.