Corruption At The FCC? TV Execs Donate To Dem Lawmaker, Get Million-Dollar Rule Exception
A single television station has been granted a significant exception to the Federal Communications Commission’s upcoming broadcast spectrum overhaul — a station whose operators made joint campaign contributions to a key lawmaker with oversight authority over the FCC.
House Energy & Commerce Committee Ranking Democrat Henry Waxman — who oversees the FCC — received more than $12,000 in campaign contributions from three television executives in danger of losing broadcast rights after their company missed a crucial agency deadline. The company was subsequently granted the sole exception to the FCC’s rule.
“The timing of the campaign donations is very suspicious,” a source at the FCC familiar with the spectrum deliberations told The Daily Caller. “It appears that you can buy special favors from the FCC worth millions of dollars by giving money to Democrats. Would the result have been the same if the company’s executives were Republican donors? I doubt it.”
In May the FCC finalized plans to hold a spectrum incentive auction, the goal of which is to free up and transition broadcast television ultra-high frequency spectrum space over to the growing mobile broadband services market.
Starting sometime in mid-2015, TV broadcasters will have the opportunity to sell spectrum back to the commission, which will then re-sell it to wireless carriers. Broadcasters choosing not to sell will be repacked (or moved to different spectrum) in order to stay in business.
The central question facing broadcasters is who will be eligible for auction participation, and who will be eligible for repacking in the event they fail to sell their spectrum.
That decision will be left up to the commission based on three FCC broadcast power and classification distinctions — “Class A” and “Full-Power Stations,” which will be eligible for auction participation or repacking, and “Low-Power Stations,” which will be ineligible for auction participation.
Full-Power Stations cover large broadcast ranges and must meet certain public interest requirements. Low-Power Stations cover smaller, more-localized areas and are exempt from those requirements. Class A Stations are former Low-Power Stations that received full-power status by filing an application with the commission, and meeting the public interest protocols.
Class A and Full-Power Stations will either receive millions of dollars by selling their spectrum to the FCC or stay in the television business via new, repacked spectrum, whereas Low-Power Stations are not guaranteed spectrum after the auction — meaning if there’s no room left, they’ll be forced off the air.
That makes the distinction between Class A and Low-Power Stations worth, literally, millions of dollars more for the former.
The commission released its adopted incentive auction rules in June, which established a simple rule: All Low-Power Stations that failed to file applications to become Class A Stations by February 22, 2012 (the date the law authorizing the incentive auction was enacted) would be ineligible to participate in the auction, or be protected through repacking.
All except one — a local station based in Los Angeles, which received a special exception to the rule.
“We will, however, exercise our discretion to protect one station in this category — KHTV-CD, Los Angeles, California, licensed to Venture,” the rules state. “Venture made repeated efforts over the course of a decade to convert to Class A status.”
According to FCC filings, Venture was denied Class A designation several times over predicted spectrum “interference” or “international objection,” and failed to file a Class A license application along with a construction permit for a new facility in 2009. Venture then had to wait to get a Low-Power license before applying for Class A again. The Low-Power license was granted on February 22, 2012, after which Venture applied for and received its Class A license on July 11, 2012 — well after the incentive auction deadline.
Federal Election Commission filings show that on September 30, 2012 Venture Technologies Group co-founder and Chairman Lawrence Rogow, co-founder and General Counsel Garry Spire and CEO Paul Koplin each gave $2,500 (or a combined $7,500) to Waxman’s re-election campaign
The House Energy & Commerce Committee oversees the FCC, and the commission’s Wireless Telecommunications Bureau Chief Roger Sherman — one of the most important advisors to Chairman Tom Wheeler on the incentive auction, according to an FCC source — was formerly Minority Chief Counsel in Waxman’s office, including during Waxman’s tenure as Energy & Commerce chair.
Spire gave Waxman another $2,500 six days before, and a little over a year later on November 8, 2013, Rogow and Koplin gave Waxman another $2,600 each, making for a total of $12,700 personally from top Venture execs to Waxman months before the FCC’s adopted incentive auction rules, which gave their company the only exception.
The exception granted to Venture will either allow the company to make millions of dollars by participating in the incentive auction (as spectrum in Los Angeles is especially valuable), or allow its station to stay in business after the incentive auction, when it likely would have been forced off the air otherwise.
The Daily Caller reached out to Waxman Communications Director Karen Lightfoot twice via email and telephone on June 20 seeking comment on the timing of the donations, the exception, and the status of any possible relationship with Venture. She did not respond.
TheDC then attempted to contact Waxman Assistant Press Secretary Elizabeth Letter via email and telephone on July 2, and again received no response.
Congressman Waxman’s office did not return multiple telephone requests for comment.
Last week, Republicans on the House Energy and Commerce Committee launched an investigation into a different FCC rule exception for a company owned by a major Obama donor.
“The Energy and Commerce Committee is committed to conducting vigorous oversight to ensure that Commission processes are fair, open, and transparent, and that they serve the public interest,” Energy and Commerce Committee Chairman Fred Upton, Oregon Rep. Greg Walden and Pennsylvania Rep. Tim Murphy wrote in a letter to FCC Chairman Tom Wheeler.
In an earlier July statement, Upton and Walden said the agency’s “process is clearly broken, and something smells rotten on the eighth floor” — a reference to the offices of the chairman and commissioners at FCC headquarters in Washington.
Republicans opened the probe to find out whether Grain Management LLC, headed by Democratic campaign donor David Grain, was given ethically questionable favor in the form of a wavier to airwave auction rules that grant Grain benefits originally intended exclusively for smaller businesses.