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Lower-powered Class A's want equal value for their spectrum

Broadcast stations willing to participate in the upcoming spectrum auction fear the FCC is considering giving lower-powered Class A stations less money for their spectrum than larger, full-power stations.

Preston Padden, representing the Expanding Opportunities For Broadcasters Coalition, a group of more than 40 stations in many major markets that plan to sell their spectrum at the auction, warned the commissioners that their priority should be clearing spectrum and nothing else — including station power, ratings or other factors.

“The participation of willing broadcasters is the linchpin of a successful incentive auction,” Padden said of behalf of the coalition. “As such, the FCC’s primary focus should be convincing broadcasters that their price expectations are likely to be met in the reverse auction.”

It doesn’t matter to a wireless carrier, he added, whether the spectrum it receives was previously occupied by a full-power or a Class A station or a station with high or low ratings.

Padden said his members have heard that some FCC staff and operatives are developing strategies to manage the auction results to reduce payments to broadcasters. Such strategies, he said, could lead to complete failure of the auction. Only market forces, and nothing more, should determine the prices, he said.

As a former head of the Association of Independent Television Stations and an executive at News Corp and ABC, Padden said another concern to his group is limiting the participation in the auction of the two largest wireless carriers. That could happen if the FCC acts to seek protections against concentrating too much spectrum in a few companies.

“Restricting forward auction participation, especially by the largest providers — Verizon Wireless and AT&T — would create a daisy-chain effect, reducing broadcaster expectations and participation, the amount of spectrum transferred for mobile broadband use, auction proceeds and available funding for public safety and deficit reduction,” said the coalition in the filing.

The coalition is seeking to have the FCC auction all the spectrum — at least 120MHz — including the guard bands. The commission has been considering allowing for unlicensed use in the guard bands and the coalition is against that.

“Siphoning off some of that spectrum (for which the FCC may pay large sums) for unlicensed use will artificially distort demand and disrupt the market-based mechanisms,” the coalition told the FCC.

Finally, Padden urged that broadcasters who sell their spectrum be paid quickly and not have to wait for their funds in the case of lawsuits or other red tape.