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Proposal would vacate UHF by ’07

Mar 18, 2002  •  Post A Comment

Threatening to blow up the pot of gold at the end of Bud Paxson’s spectrum rainbow, the White House has proposed legislation that would erode much of the bargaining power the Paxson Communications chief has been counting on to reap huge payoffs for clearing his TV stations from channels 60 through 69.
The payoffs are within the realm of possibility because the federal government wants to auction the frequencies for wireless radio use.
Before it actually auctions the frequencies, though, the government wants assurances that the 99 broadcasters currently operating on those channels will vacate the premises, at least eventually.
That’s a problem because the law currently says that the broadcasters can stay put until the transition to digital television transmission technology is complete. The end of the transition is defined as when 85 percent of the viewers are capable of receiving digital television, something many observers don’t expect to happen for a decade or more.
To induce the broadcasters to move early, the Federal Communications Commission last year approved a variety of initiatives-including one that would allow the winners of the spectrum auctions to pay off broadcasters.
“The broadcasters are going to be in for a windfall,” said Mr. Paxson at the time.
But the White House’s new legislative proposal, which was quietly forwarded to congressional leaders Feb. 28, would appear to eliminate much of the leverage of Mr. Paxson and other broadcasters in the band by forcing them to vacate the channels involuntarily by the end of 2006.
“The proposal is designed to foster efficient use of the spectrum in a manner that is fair to all users and helps ensure that taxpayers are adequately compensated for use of a public resource,” said Theodore Kassinger, general counsel of the Department of Commerce, in the cover letter that accompanied the proposed bill.
Also under the new legislative plan, broadcasters who don’t forge voluntary relocation agreements with auction winners by the end of 2006 would be limited to collecting reasonable costs associated with their moves, with the definition of reasonable left up to the FCC.
The proposal, which affords some protection to public TV stations and broadcasters with a digital assignment in the affected band, also postpones the deadline for the auctions, currently June 19 of this year, until the end of 2004. In addition, the bill would extend the forced-relocation obligations on stations operating on Channel 59.
In a statement last week, Mr. Paxson, who owns 19 stations on channels 59 to 69, said, “Legislation like that will not get through.”
Mark Hyman, VP of corporate relations for Sinclair Broadcast Group, which owns six stations on the band, said, “We have government-mandated standards and rollout dates, and now an imposed consumer-adoption deadline. Meanwhile, China and Russia have adopted a free-market model. How truly bizarre. What’s next in our Soviet-style approach to DTV?”
Univision, which owns 11 stations on the band, declined comment.
Nancy Udell, a Paxson spokeswoman, predicted that the legislative threat would bring representatives of stations on the band closer together. “It will serve to unite rather than divide,” she said.
At deadline, it appeared that the broadcasters would be able to count on at least one influential ally on Capitol Hill-Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee. At least for the time being.
“The administration, unfortunately, is preparing for a doomsday scenario,” said Ken Johnson, a spokesman for Rep. Tauzin. “We’re taking a more optimistic approach. We’re making progress toward removing more of the roadblocks holding up the transition to digital. If we accomplish that, spectrum fees and forced moves won’t be necessary.”
Ms. Udell also said Mr. Paxson is planning to convene a meeting of band station representatives during the National Association of Broadcasters convention in Las Vegas next month to discuss his plans to forge an alliance of stations to negotiate for compensation and on other issues.