FCC postpones vote on 600 MHz incentive auction rules, size of the spectrum reserve

The FCC is postponing its vote on rules for next year's planned incentive auction of 600 MHz broadcast TV spectrum until Aug. 6 after pressure from Congress to push back the vote that had been planned for the agency's July 16 meeting.

Despite the postponement, FCC Chairman Tom Wheeler thinks the auction can still take place in early 2016. "In the spirit of cooperation that has marked our work together on the incentive auctions, I am today postponing Commission consideration of this order and the related reconsideration of the mobile spectrum holdings order until the Commission's next regularly scheduled meeting on August 6," Wheeler wrote in a letter to Reps. Fred Upton (R-Mich.) and Greg Walden (R-Ore.) that was obtained by FierceWireless. "I believe that even with this delay we will be able to stay on course for the first quarter of 2016."

The delay in the vote will push back by several weeks decisions on how the auction will be structured, the rules for opening bid prices for broadcasters' spectrum and how large the spectrum reserve will be for airwaves set aside for smaller carriers to bid on.

Upton, the House Energy and Commerce Committee's chairman, and Walden, the chairman of the committee's Communications and Technology Subcommittee, wrote a letter to Wheeler on Tuesday expressing their concerns with steps the FC had taken to add more information to the record on the incentive auction.

On Friday, the FCC's Incentive Auction Task Force added new data on simulations for how the auction might proceed depending upon how much spectrum broadcasters give up. The National Association of Broadcasters, a key player in the auction debate, issued a filing expressing deep concerns over the new simulation data, saying the data was inadequate to let broadcasters gauge how the auction might proceed.

As TV Technology notes, a so-called "Sunshine Notice" closing the record for further comment was issued a week before the meeting, but on Friday, the day the new data was released, the FCC waived the sunshine period to allow comments until 7 p.m. on July 15.

"The revised timeline and additional data placed into the record limits the commissioners' ability to participate during the open meeting or make an informed vote, casting a shadow over an innovative and novel auction that could be this commission's legacy," wrote Upton and Walden in their letter.

"Stakeholders now find themselves in the unfortunate position of being handed an incomplete document at the 11th hour that lacks the underlying data to support its conclusions," the lawmakers continued. "Releasing data of this complexity and importance in such close proximity to the open meeting impairs the ability of the public and industry to provide meaningful and considered feedback to the commission."

Wheeler defended the release of the new data. "The data released last Friday was simply a more granular version of the auction simulations data that has been in the public's hands since May," he wrote. "We released it in response to requests by several parties for more detail on the assumptions in those scenarios regarding broadcaster participation, and on the specific markets that would be affected if the auction system assigned stations to the duplex gap. I made the decision to provide it publicly and to all, while simultaneously suspending the sunshine rules so that commenters could provide input. The purpose of releasing the data was to demonstrate to broadcasters and the unlicensed community the de minimis impact of the duplex gap option at multiple levels of licensee participation. It is worth noting that the full Commission sought comment on whether the auction system should be able to assign stations to the duplex gap in December 2014, asking specifically about this point as part of our release of proposed auction procedures."

A major issue up in the air for the auction is whether TV stations will be allowed to move into guard bands in the 600 MHz band after the auction. Last year, the commission decided to dedicate the "duplex gap," also known as the guard band, to Wi-Fi and other unlicensed uses, as well as for licensed broadcast news microphones, but a staff recommendation reverses that. Recently, the NAB, the Radio & Television Digital News Association, Microsoft (NASDAQ: MSFT), Open Technology Institute at New America, Public Knowledge, Free Press and Common Cause were among the parties jointly asking the FCC to back off the staff recommendation to relocate TV stations in the duplex gap.

Wheeler wrote in his letter that since the FCC does not know how many stations will participate in the auction until it starts, it needs to make provisions for assigning a few stations to the wireless band in case there is insufficient spectrum in the TV band for all of the stations that wish to remain on the air.

"The question is where in the 600 MHz band they are placed. The data we released in May and augmented last week show that of the 210 television markets in the country, in only about a half dozen would there be a need to consider putting a 6 MHz broadcast licensee in the 11 MHz space between the mobile uplink and downlink," he wrote. "Absent this option, assigning even just a few additional stations to the uplink or the downlink would increase interference to adjacent markets to the extent that an entire 10 MHz block of spectrum would be lost to the auction--an effect that would ripple across the country to significantly reduce the number of broadcast licenses available for purchase and repurposing. This would not only reduce opportunities for broadcasters seeking alternatives for their spectrum and reduce the amount available for new wireless uses, but it would also reduce the revenues available to pay broadcasters by approximately 25 percent, and the revenues for deficit reduction by a similar amount. We believe the simulations and associated data we released last week make clear the importance of preserving the duplex gap option."

No one seems happy with the FCC's postponement. "The FCC's original incentive auction order fashioned a careful compromise allowing licensed wireless microphones and unlicensed users to operate in the duplex gap," NAB spokesman Dennis Wharton said in a statement. "The FCC could easily have voted tomorrow on an order maintaining this balanced approach and not delayed the process. Instead, the Commission has produced no explanation for its about-face and has left stakeholders baffled as to why it is walking away from previous commitments. It's time for the FCC to engage stakeholders in a transparent, data-driven manner, and come to a successful resolution of this issue."

Competitive Carriers Association President Steve Berry said in a statement his organization is "most disappointed" with the move. "Competitive carriers desperately need access to additional spectrum, especially low-band spectrum," he said. "I strongly urge the Commission to act as quickly as possible to move critical low-band spectrum to market.  Any delay in the auction will be harmful to competitive carriers and ultimately consumers, and I urge the FCC to move forward on this issue as promptly as possible."

For more:
- see this TV Technology article
- see this FCC statement
- see this The Hill article
- see this separate TV Technology article
- see this Broadcasting & Cable article

Related articles:
Former Rep. Waxman, now a T-Mobile adviser, proposes compromises on 600 MHz auction
Unlikely allies fight plan to move TV stations into duplex gap
T-Mobile, leaning on economist's arguments, keeps pushing for larger 600 MHz spectrum reserve
Broadcasters warn that FCC could lower 600 MHz auction opening prices by a collective $8.3B
FCC's Wheeler reaffirms that incentive auction will take place in Q1 2016

Read more on