FCC, CCA, CTA, CTIA Oppose Class A Incentive Auction Stay
The FCC, several trade associations and a group of broadcasters attempted through court filings to fend off a stay of the incentive auction requested by Class A broadcaster Latina Broadcasters in the U.S. Court of Appeals for the D.C. Circuit. The auction is to start March 29. “Any unnecessary delay, especially this close to the start of the auction, would cause substantial harm” to companies that have delayed business plans or have investments or financing riding on the current schedule,” the FCC said in an opposition filing Friday.
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In separate proceedings, three other Class A broadcasters also requested a stay of the auction, as have two low-power TV broadcasters (see 1603020044). Latina asked the FCC to either allow it to participate in the auction or delay the proceeding. Latina previously had been protected in the auction but the FCC issued an order last month disqualifying it from the auction. FCC and industry officials told us then the FCC was disqualifying Latina to strengthen its case for excluding Class A's Fifth Street, Videohouse and WMTM (see 1602090060).
The FCC arguments against the stay were backed by CTA, a joint filing from CCA and CTIA, and a joint filing by several broadcasters that said they would be harmed by a stay of the imminent auction. “Any delay in the Incentive Auction would stifle innovation and have negative consequences for the U.S. economy, which is increasingly dependent on the availability of adequate wireless spectrum to meet the skyrocketing demands of wireless devices,” said CTA in an amicus brief supporting the FCC.
Among the broadcasters requesting stays of the auction, Latina may have the most persuasive case because the FCC's flip-flopping on the matter of its inclusion in the auction looks the worst, said Fletcher Heald broadcast attorney Peter Tannenwald. He has some connection to some of the broadcasters requesting stays but doesn't directly represent them in this matter. The court's response to the challenges from the Class A has looked slightly favorable to the broadcasters, scheduling quick briefing schedules and issuing orders requiring fast FCC responses, Tannenwald said. This suggests the D.C. Circuit sees something questionable in the FCC's actions, Tannenwald and another broadcast attorney told us.
Even so, several attorneys told us it's unlikely the D.C. Circuit would stay the auction so late in the process. A judge weighing the harm against a few broadcasters against the harm of stalling or stopping the auction is unlikely to find for the low-power stations, the attorneys told us. The question of what other relief the court could provide for the Class A broadcasters -- if it sides against the FCC -- is very difficult, Tannenwald said. Protecting the stations in the auction would require a recalculation that could itself delay the auction, and there aren't many other options for real relief, he said.
Latina argued its WDYB Daytona Beach, Florida, is similarly situated to another Class A protected in the auction, KHTV-CD Los Angeles. Though both stations missed a 2012 deadline to file for Class A status in order to participate in the auction, the FCC said they're not similar. Latina ”repeatedly abandoned plans to construct a Class A facility,” entitling the FCC to distinguish between the two stations “based on their relative diligence” in filing for Class A status, the opposition filing said. Latina's arguments that the FCC's earlier announcements that Latina was included in the auction preclude the commission from disqualifying it later don't hold up, the commission said. “There is no indication that the FCC meant to mislead Latina with the provisional eligibility notices,” the FCC said. “Agencies have a well-settled power to correct their inadvertent mistakes.”
The arguments against staying the auction by CCA, CTA, CTIA and the broadcast supporters of the FCC position are all based on the idea that stalling the auction would cause substantial harm to industry and the future of the Internet. “Any delay in obtaining access to these licenses would threaten participating service providers’ ability to deliver the wireless services consumers demand, both today and in the future,” said CTIA and CCA. Broadcasters would be harmed in part by FCC anti-collusion rules under such a stay, said TV licensees Ellis Communications, PTP Broadcasting Management and WRNN License Co. A stay would keep broadcasters “bound by limits the Commission places on communications with third parties during the pendency of the auction,” the broadcasters said. A stay also would leave broadcasters in “an extended state of limbo, not knowing whether or how far to make long-term business plans while the possibility that their spectrum may be purchased in the Auction remains uncertain,” they said.
Once the reverse auction begins, there will be “no way” to remedy the injury to excluded broadcasters, said Videohouse in its request for a stay of the auction. “It appears no court has ever vacated the results of an FCC auction after it has taken place," Videohouse said. “If excluded from the auction, then, Video House will forever lose the unique opportunity to sell their spectrum rights and/or receive repacking protection.” The D.C. Circuit told the FCC to respond to Videohouse’s court filing by Tuesday.