FCC Will Reject Class A's Appeal, Disqualify Latina Broadcasters From Incentive Auction
The FCC will block three Class A broadcasters from participating in the incentive auction and will disqualify an additional Class A broadcaster to make its case against the others stronger, an FCC official and several industry officials told us. The order denying reconsideration petitions from Fifth Street Enterprises, Videohouse and WMTM and disqualifying Latina Broadcasters' WDYB Daytona Beach from participating is expected to be issued later this week. Latina had been listed as being included in the auction in filings last year. "What the FCC did to Latina is almost unbelievable," said Ron Bruno, owner of Videohouse, in an interview.
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Latina became involved in the other Class A's appeal of the FCC's decision not to include them in the auction after Videohouse, Fifth Street and WMTM argued that Latina was being included despite being similarly situated to the left-out stations. The broadcasters behind the recon petition didn't file for Class A status in time for a 2012 deadline (see 1601250060) that was required for stations to be eligible for the incentive auction. Latina did file for Class A status in time but allowed the underlying construction permits to expire, according to court filings.
The FCC has said Latina's situation was different from the stations seeking reconsideration. Now, it's reversing itself based on arguments from the Office of General Counsel that blocking Latina from participating as well will make the agency's case against the other three tougher to challenge, said FCC and industry officials. "Our intention was not to get anyone out of the auction, it was to have our stations in the auction," Bruno said. "It doesn't make any sense" for the FCC to block a few Class A stations out of the thousands that are participating, Bruno said. The FCC declined to comment.
With their FCC petition denied, Bruno said the Class A's would very likely take their appeal to the courts. In recent letters (see 1602080070) to Commissioners Mignon Clyburn and Jessica Rosenworcel, Latina's owner Nora Crosby Soto listed the many investments she has made in her Class A station based on the assurance the station could participate in the auction. Crosby Soto said she would "do whatever it takes" to protect her station if the FCC blocked it from participating, likely also indicating further legal action.
The FCC "is not playing its cards right," said Advanced Television Broadcasting Alliance Executive Director Louis Libin in an interview. Latina Broadcasters is minority owned, and several FCC policies toward low-power stations on the incentive auction will have a disproportionate effect on minority-owned broadcasters, Libin said.
Some broadcast attorneys have told us it would be surprising for the FCC to take stances that could risk possible auction-delaying legal action. Yet the agency likely believes it has a strong case, said Fletcher Heald broadcast attorney Daniel Kirkpatrick, who's not connected with the matter. With the incentive auction's March 29 start coming fast, the commission probably believes a judge-ordered delay of the auction while this or other challenges to the auction are resolved is unlikely, Kirkpatrick said. The agency may also be concerned that opening the door to these challenges to its incentive auction policies would invite even more challenges, Kirkpatrick said.