Dingell Says FCC ‘Concealing’ Incentive Auctions Model

"Your failure to provide me with a detailed response to my inquiry leaves me no choice but to rely upon the analyses performed by private parties as Congress considers whether to grant your agency the authority you seek,” Dingell said in the Tuesday letter. The FCC has contested NAB’s analysis of how many stations would be forced to change channels or go off-air, but won’t prove it wrong, Dingell said. “Your refusal to do so leaves me no alternative but to conclude that the NAB’s analysis is probably more correct than not.” The regulator appears to be “concealing from Congress the true nature and consequences of future agency actions,” Dingell added. “With this in mind, I will oppose granting the Commission any statutory authority to conduct such auctions that does not include explicit and fair protections for broadcasters."

"The Commission’s preliminary modeling is based on hypothetical participation in an auction that doesn’t exist yet and has not yet been authorized by Congress,” an FCC official said in response to our request for comment. The agency refused to respond on the record. “It is impossible for the FCC to answer the Congressman’s questions without knowing in advance which stations participate in the auction, which is not possible because the auction would be entirely voluntary,” the official said. Authorizing incentive auctions “will produce tens of billions of dollars in revenue for the U.S Treasury, allow America to meet its spectrum crunch [and] strengthen the economic position of many broadcasters,” the official said. The agency will develop auction rules “using an open transparent process,” the official said.

The FCC won’t release the predictive model until Congress authorizes the auctions, Genachowski said in the Aug. 3 letter. It will seek comment on the model before adopting auction rules, he said. The model “remains very much a work in progress, and I am deeply concerned that disclosure of predecisional information would potentially damage the Commission’s deliberative processes, as well as result in needless public confusion about the status of the Commission’s work on the voluntary incentive auction concept,” Genachowski wrote. “At this stage, any sample AOM model runs would be imprecise and potentially lead people to have an incomplete and misleading snapshot of the post-auction broadcast marketplace.”

Release of the data “would likely lead to destabilizing speculation in the marketplace,” since it makes “hypothetical assumptions” about which TV stations would sell their spectrum, Genachowski added. “In short, it is too early in our process to release what is still a partial work product, because doing so would not add to (and could harmfully detract from) the guidance already provided in [Omnibus Broadband Initiative] Technical Paper No. 3, which remains the touchstone of the Commission’s work and is available for all public parties to use to conduct hypothetical modeling.”

NAB President Gordon Smith said it’s “deeply disappointing” that the FCC wouldn’t answer Dingell. “Under NAB’s analysis of the FCC’s National Broadband Plan, local television’s future could be irreparably diminished, and Congressman Dingell’s concern clearly arises from the fact that Detroit citizens could lose access to all of their local TV stations because of U.S. treaty obligations with Canada,” said Smith, who last month said the agency was withholding from the public and Congress the Office of Engineering and Technology mathematical model (CD July 26 p1). “If the FCC has evidence proving that NAB’s analysis is incorrect, it should make it available, and quickly.”