Levin: TV Spectrum Auctions Likely Doomed

A Federal Communications Commission incentive auction of broadcast television spectrum will likely "fail" if, as expected, Congress adopts Republican House authorizing legislation, according to Blair Levin, the chief architect of the FCC’s 2010 National Broadband Plan that first proposed the auction.

The legislation, authored by House Communications Subcommittee Chairman Greg Walden (R-OR), would grant the FCC authority to conduct incentive auctions — auctions in which proceeds are shared with broadcasters who voluntarily give up their spectrum. But it also contains provisions designed to protect broadcasters who hang on to their spectrum. And they are what has Levin worried. "The legislation ties the FCC’s hands in a variety of ways," said Levin, who left the FCC following release of the broadband plan and is now attached to the Aspen Institute. "It opens it up to litigation risk, which then, in conjunction with the other handcuffs, makes it difficult to pull off a successful auction. "The nature of the bill dramatically increases the probability that there will be less spectrum recovered and less money for the [U.S.] Treasury."

Levin is principally concerned about the "reasonable efforts" language, which, he said, "definitely makes the FCC more vulnerable to litigation. Nobody wants to go to an auction when there is the threat of a judge anywhere having the ability of holding it up. I believe a good lawyer could find a way to get the question of whether the FCC took all reasonable efforts in front of a judge,” he said. Moreover, Levin said he thinks some broadcasters will use the threat of litigation to their advantage. "If you are designing the auction and a big law firm shows up and says, 'If you don’t take care of my single broadcaster, we are going to find a way to get to court.' That’s a real threat.” Levin also said he believes the broadcaster compensation fund is too large and the limit on the number of auctions in unnecessary.