McCain, Paxson Clashed Over Sale of UHF Airwaves
Scott Woolley of Forbes.com offers a revealing look at the relationship between Sen. John McCain and the head of Paxson Communications, Lowell "Bud" Paxson.
Woolley writes that several facts are well known at this point in time: "Paxson let McCain fly on his corporate jet four times and gave him numerous campaign contributions. In 1999, McCain helped Paxson by writing to the Federal Communications Commission (FCC), asking regulators to limit delays and rule on Paxson's pending application to buy a Pittsburgh television station."
But the Pittsburgh station, Lowell writes, would have only given Paxon one more station - he already had 73. A far more important issue to Paxson was the right to be able to sell his UHF airwaves - which could have brought Paxon billions of dollars. And McCain, as the chairman of the Senate Commerce Committee, was in a position to help Paxson win--or lose--billions."
"During the six-year-long fight that followed, McCain never wavered from his opposition to the legislation Paxson pushed, which would have diverted those billions into his company's coffers and away from the U.S. Treasury. Whether McCain did any other, smaller favors for Paxson is a question that will draw new attention as the campaign heats up. But, at least on the issue of most consequence, the two strong-willed men were implacable foes."
McCain fought legislation that would allow Paxson and the other broadcasters who owned UHF airwaves to sell those airwaves to cell phone companies and others. In fact, McCain argued to do so was dangerous - on 9/11 in 2001 and during Hurricane Katrina, wireless communications for first responders didn't work as well as needed. The 9/11 commission recommended that "Congress should support pending legislation which provides for the expedited and increased assignment of radio spectrum for public safety purposes."
Finally, at the end of 2005, McCain and his allies succeeded in setting a hard deadline to clear the broadcasters off UHF Channels 52-69. All the money from the sales of these channels will not go to Paxon and the other broadcasters, but into federal government coffers instead.
If you want to know what that meant for Paxson, writes Woolley in conclusion, Paxon stock was worth $10.75 in the mid-90s.
"By November 2005, just before he finally resigned from his company, those same shares had fallen to 37 cents. Last week, the once mighty Paxson Communications, now renamed Ion Media Networks, was delisted from the American Stock Exchange and sold off to Kenneth Griffin's Citadel Investment Group."
12:40 PM ET | 02-28-2008 | permalink
