updated 05:05 pm EDT, Tue August 19, 2014
Organization believes that auction violates Spectrum Act, abuses discretion under APA Act
The National Association of Broadcasters (NAB) has filed a petition with the United States Court of Appeals for the District of Columbia Circuit, seeking a review of the Federal Communications Commission's (FCC) 2015 spectrum auction. In the filing, the NAB states that the FCC isn't taking the proper precautions to protect broadcasters that choose to retain their spectrum. According to the NAB, an updated methodology the FCC is using will result in a loss of coverage area for remaining broadcasters.
The spectrum auction is considered a "reverse auction" where television stations will be receiving bids from wireless carriers. Those taking part in the auction will receive compensation for the spectrum being sold, but are then left to go out of business or enter a channel-share agreement. The second option could incur considerable costs, which the Wall Street Journal states could be as much as $500 million in some cases to repack. The auction, authorized by Congress in 2012, is the first of its kind.
After the auction takes place, the FCC would then have to reorder the remaining spectrum in order to preserve coverage areas and to protect broadcasters that didn't participate. The NAB believes that the new TVStudy methodology that the FCC adopted in June changes the process that was outlined in 2012. The association believes that this violates the Spectrum Act, and abuses the discretion outlined in the Administrative Procedure Act.
"Under this new methodology, many broadcast licensees, including NAB's members, will lose coverage area and population served during the auction's repacking and reassignment process, or be forced to participated in the auction (and relinquish broadcast spectrum rights)," said the NAB in the filing obtained by Ars Technica.
NAB requests that the court "hold unlawful, vacate, enjoin and set aside" the FCC's adoption of the TVStudy methodology. If granted, the spectrum auction could be delayed, or would require the FCC to rethink the rules. The NAB stated that it asked for "an expedited review" from the court.
"Unfortunately, the FCC order oversteps Congressional mandate and is likely to cause significant harm to broadcast television," said NAB Executive Vice President of Strategic Planning Rick Kaplan. "We are not looking to delay the auction. We merely hope that, if the FCC does not change course on its own, the Court will help put the auction back on the track Congress envisioned so that we can quickly achieve a balanced auction that benefits all stakeholders."
It does appear that the NAB is looking to bargain with the FCC, as a source tells the newspaper that the lawsuit could be dropped if the agency increases the funding set aside for repacking. Currently, there is $1.75 billion reserved for broadcasters. They added that the FCC could also do more to make sure stations don't have coverage areas reduced.