Incentive Auction Sellers Coalition Disbands

EOBC’s Preston Padden cites completion of auction rules, avoidance of collusion
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WASHINGTON—A group TV stations owners intending to sell their spectrum in the upcoming incentive auction has disbanded. The Economic Opportunities for Broadcasters Coalition, led by former ABC executive Preston Padden, is no more.

“First, we were formed to advocate for the rules of the spectrum,” which are largely done, Padden said. “And second, for the anti-collusion rules. We would have had to follow very strict anti-collusion rules.”

The wiser course of action was to disband, he said.

The EOBC was comprised a total of 87 TV stations held by an undisclosed number of owners. Padden said he anticipated that most of those stations would participate in the auction, in part due to the influence of the EOBC on the formation of the auction rules.

To that end, the group, via Padden, fought tooth and nail against dynamic reserve pricing, a mechanism proposed by the Federal Communications Commission that would have allowed it to pay a lower price than a TV station accepted if that TV station was relocated where it caused interference in the newly designated wireless band.

DRP left a chasm of uncertainty with regard to what a selling broadcaster would be paid, and EOBC wasn’t alone in its opposition to it. A Fox executive speaking at an event in Washington last May said Fox likely would not participate in the auction of the commission kept DRP in the rules.

It did not.

EOBC members also favored more relaxed channel-sharing rules and a station valuation formula based on interference, both of which stand.

Padden remained bullish about the auction, and said the group believed there would be “strong participation” of both TV stations and wireless bidders. He said Sprint’s weekend announcement that it would not to participate in the TV spectrum auction would have “zero” impact.

“Verizon and AT&T and T-Mobile and other carrier bidders will be in the forward auction, we are convinced it will be a huge success,” Padden said.

EOBC member stations were never identified. Congress ruled that TV stations may participate anonymously. Further FCC rules will prohibit TV stations owners from discussing the auction. This anti-collusion parameter was laid out in the commission’s Bidding Procedures Public Notice, released in August.

The Notice said the commission would impose a “prohibition on communicating information relating to bids or bidding strategies, such as non-public information that bidders may access in the auction system, to broadcast licensees eligible to participate in the reverse auction or to forward auction applicants, subject to specified exceptions.”

At one point, the anti-collusion rule raised concerns among 11 D.C. law firms that represent “most television stations participating in the reverse auction,” according to a joint filing addressed to the Federal Communications Bar Association and obtained by TV Technology.

“The primary concern was that the application of the anti-collusion rules should not unduly restrict broadcasters’ right and ability to retain the counsel of their choice prior to and during the reverse auction,” it said. “Few television broadcasters have any experience with the FCC’s auction procedures and, given that lack of experience and the fact that the reverse auction may involve choices affecting the entire future of a company, the group expects that clients, particularly smaller firms that do not have in-house counsel, will want to be able to obtain the judgment of their long-time attorneys as the reverse auction proceeds.”

Ari Meltzer of Wiley Rein said it was no longer a concern among attorneys representing stations, versus the EOBC, where stations held by different owners are in direct contact with one another.

More details about the anti-collusion rule are expected in an Applications Procedures Public Notice to be released next month.

Padden, now a semi-retired grandfather living in Boulder, Colo., said he would continue to consult on the auction, and gave the commission high marks for conduct. He singled out FCC Chairman Tom Wheeler and Incentive Spectrum Auction Task Force chiefs, Gary Epstein and Howard Symon.

“I’ve been around the FCC for 40 years. The normal course is that the chairman and the staff draft a decision, they circulate it, and reporters and advocates have to find a friendly person on the eighth floor to leak the information,” he said. “In this case, Wheeler, Epstein and Symon behaved differently. They invited all stakeholders in to examine the draft decision. The process was more open than anything I’ve seen at the FCC, and saved people running around the eighth floor seeking information about the draft.”

Also see…
August 15, 2015
Shh! Public TV Questions Auction Quiet Period
Just how quiet is the “quiet period” following the deadline to apply for the TV spectrum incentive auction? Inquiring public TV station minds want to know.

December 12, 2014
FCC Clarifies Auction Pricing, EOBC Disputes It
Organizers of the 2016 TV spectrum incentive auction said a pricing discrepancy in official documents represented a floor and a potential goal, not a vacillation.