The Stage 3 forward auction concluded in just one round Monday, as some had expected (see 1612010072). It was more than $20 billion short of the $42 billion that would have been needed to trigger the final round of the incentive auction, said the Public Reporting System. Though numerous broadcasters and analysts are still predicting the auction will close in Stage 4, several auction watchers were confused or angry about the auction's results.
The NAB will look to the next FCC to reverse media ownership rules instead of the courts, said a petition for reconsideration filed with the commission Thursday. NAB already had filed a court challenge of the 2014 quadrennial review with the U.S. Court of Appeals for the D.C. Circuit, but it filed a motion to withdraw that petition for review Friday. The decision to pursue the matter at the FCC indicates NAB believes the upcoming Republican-controlled FCC will be more sympathetic to the association’s arguments than the courts, a possibility that was foreseen by some broadcast attorneys following the case (see 1611090061). “This is not a surprise,” said Georgetown University Institute for Public Representation Senior Counselor Andrew Schwartzman, who represents Prometheus Radio Project in its court challenge of the media ownership rules. Nexstar Broadcasting and Connoisseur Media also filed recon petitions with the FCC against aspects of the media ownership rules.
The reverse auction portion of Stage 3 of the FCC incentive auction concluded Thursday, as expected (see 1611280055), at a clearing cost of $40.3 billion to clear 108 MHz, said the Public Reporting System. That’s within the range expected (see 1610250060), and a further stage is considered likely, said Justin Nielson, senior researcher for S&P Global Market Intelligence, in an interview. The Stage 2 reverse auction clearing cost was $56.5 billion, and Neilson said a reduction into the $30 billion range for Stage 4 likely will bring the spectrum on auction into line with what forward auction bidders are looking to pay. Stage 4 is expected to have a clearing cost of 84 MHz, according to the FCC's band plan. The forward auction generated $20.9 billion in Stage 2, and closed in a single day. That’s not likely to occur this time because the prices are likely low enough for some bidders to make a serious grab for spectrum, Nielson said. Stage 3 of the forward auction is expected to start Monday.
Commissioners Ajit Pai and Michael O'Rielly said they're hopeful the Republican-controlled FCC will be less partisan, more transparent about draft orders, more focused on broadband infrastructure, and more open to rolling back outdated rules, a Practising Law Institute conference heard Thursday. Panelists also discussed the broadcast incentive auction, privacy regulation and 5G. There's "a lot of room" to improve FCC operations, O'Rielly said: "I look forward to the next chairman making the FCC a more functional place." Both commissioners have been discussed as candidates to be the next chairman, with most attention focusing on Pai (see 1611140066).
Nexstar's $4.6 billion buy of Media General still is seen as likely to be approved despite the coming regime change at the FCC, said numerous broadcast attorneys in interviews. The question isn't if, but when, they said. Nexstar pushed for the commission to grant a waiver that would allow the deal to go through ( see 1607190058) despite the ongoing incentive auction. A company spokeswoman told us the TV station owner maintains its previous guidance to investors that the deal will be done by year-end.
Incentive auction proceeds of public TV stations should be set aside to fund local journalism, said Free Press in a release announcing a new effort by the organization Monday. “This auction of the public airwaves gives us a once-in-a-lifetime opportunity to reverse the crisis in local news and re-imagine how local communities can get the information they need,” said CEO Craig Aaron. The campaign is initially focused on New Jersey public stations, but the group that often opposes industry consolidation believesthere are at least 54 public stations participating in the auction around the the country, and that their spectrum is “expected to bring in as much as $6 billion in the auction." Advocates for local journalism see the idea as promising.
CTA President Gary Shapiro called then-candidate Donald Trump “dangerous and unqualified to lead.” Netflix CEO Reed Hastings and Jim Cicconi, since-retired AT&T senior executive vice president-congressional affairs, publicly endorsed Democratic presidential candidate Hillary Clinton (see 1606230070). NAB President Gordon Smith donated to Trump's Republican primaries opponent Jeb Bush (see 1611150062) . Now that the election is over, those stances aren't expected to affect those entities' efforts to lobby the Republican-controlled Congress or the FCC, numerous attorneys, lobbyists and industry officials said in interviews.
While most view the nearly empty agenda for Nov. 17's commissioners' meeting as an indication the agency is on pause (see 1611150052) until the next administration takes over, there's room for commission action in the final gathering of this FCC, attorneys and industry officials told us. Legislators directed the FCC not to take up controversial topics. The agency has a statutorily required meeting Dec. 15, and many industry officials said there’s a lobbying opportunity during this limbo period for advocates of items that could receive support from all five commissioners or be resolved at the bureau level. The January meeting is after Inauguration Day. With the stance of the next FCC still unclear, many regulated entities may seek to conduct business in front of this commission while they still can, because of the increased certainty, said Fletcher Heald broadcast lawyer Peter Tannenwald.
Wireless carriers and broadcasters called on the FCC to introduce more flexibility into the post-auction repacking plan, in reply comments posted Wednesday in docket 16-306. Lawyers meanwhile told us the FCC is unlikely to grant a request filed in that docket Monday by GatesAir calling for the agency to incentivize broadcasters in the repacking to “Buy American” (see 1611150051). The FCC's repacking plan doesn't account for unexpected delays or broadcasters unable to meet the 39-month deadline, broadcasters and carriers said.
Donald Trump, much on the minds of many watchers of net neutrality and other FCC proceedings (see 1611090034), even came up in comments on the incentive auction. A broadcast equipment maker cited the president-elect's infrastructure spending plan as reason for those affected by the post-auction repacking to buy American. Also Tuesday, telecom panelists debated how Trump's $1 trillion infrastructure plan will affect lobbying and legislation strategies (see 1611150038).