AT&T Mobility (NYSE:T) continues to urge the FCC not to repack and place TV broadcasters into the 600 MHz band as part of next year's incentive auction. The carrier also said it conducted a study that found varying levels of interference for carriers depending upon how much spectrum broadcasters give up.
Last week, AT&T officials met with FCC officials to discuss the study, according to an FCC filing. The meeting included Joan Marsh, AT&T's vice president of federal regulatory, and Gary Epstein and Howard Symons, the chairman and vice chairman of the FCC's Incentive Auctions Task Force.
The study was trying to quantify how much impairment, or interference, there would be in the 600 MHz licenses in areas near the Mexican and Canadian borders that would result from the set of TV channel allotments currently held by Mexico and Canada. The situation could be especially critical for AT&T, which recently purchased spectrum and wireless networks in Mexico with the goal of offering cross-border service.
The FCC's current proposal envisions impairment on up to 20 percent of the spectrum that carriers will bid on. The FCC will impair the spectrum on an aggregated, weighted and nationwide basis.
The study indicates that based on current allotments, if the FCC got broadcasters to give up 126 MHz of spectrum, around 13 percent of MHz/POPs nationwide would be impaired. If 84 MHz was given up, that figure would be around 11.6 percent. AT&T said that these numbers would drop reduced to around 10 percent and 6 percent, respectively, when only active broadcasters in Mexico and Canada are considered.
While it used the FCC's methodology and systems, the study was limited to current TV allotments, without regard to whether these may change prior to the auction as a result of negotiations with Canada or Mexico. However, the study also looked how much interference would result from only those stations that are operating in Canada and Mexico currently (as opposed to vacant allotments).
The incentive auction will consist of two main parts: The first is a "reverse" auction, in which broadcasters agree to sell their spectrum rights. After the reverse auction, the spectrum will then be moved around or "repacked" based on which stations relinquish their spectrum. Then the FCC will conduct a more traditional "forward" auction in which carriers and other entities bid on the spectrum licenses.
AT&T continues to think the FCC should avoid repacking any U.S.-based broadcasters in the 600 MHz band. "The unavoidable impairments represented by the TV allotments held by Canada and Mexico already will cover a substantial percentage of the MHz/POPs in the 600 MHz band," AT&T noted.
AT&T wants the FCC to offer carriers only one class of spectrum, with no or very light (perhaps 10 percent or less) impairment, to make sure the spectrum blocks are as uniform as possible. If the FCC did otherwise, AT&T argued, it would make that part of the auction more complicated and might suppress demand from carriers.
A key worry among carriers and broadcasters is that auction participants won't know how much impairment there will be on their spectrum until after they buy it.
T-Mobile US (NYSE:TMUS) wants the FCC to use a "gradiated acceptance of impairment," meaning that the more spectrum broadcasters give up, the more impairment carriers should be willing to accept. Sprint (NYSE: S) would prefer to have carriers bid on "frequency-specific" blocks of spectrum so they know exactly how much impairment they are getting.
Speaking yesterday to broadcasters at the National Association of Broadcasters 2015 Conference, FCC Chairman Tom Wheeler said that the FCC is going to modify its auction rules to reflect the concerns of broadcasters. "Based on the public input in response to the Public Notice, the commission will, in the next few months, consider a 'Procedures Public Notice' adopting final rules and auction procedures," Wheeler said. "Let me give you a hint where we are heading: we want to make broadcaster participation more accommodating.
Wheeler noted the auction will only be successful if broadcasters are "informed and have confidence in the rules and the process."
The FCC chief did not go into many details about how the rules might change but he said channel sharing for broadcasters will be more flexible that originally proposed. He noted the new rules will allow stations to enter into sharing deals both before and after the auction, and broadcasters will also be able to enter into channel sharing agreements for fixed terms.
"We like channel sharing so much, in fact, that we're proposing to allow channel sharing between stations regardless of whether they participate in the auction next year or not--although those that decide to channel share outside of the auction context will not be able to collect auction proceeds," he said.
- see this FCC filing
- see this CNET article
- see this Broadcasting & Cable article
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