The FCC is laying out its plans to hold next year's incentive auction of 600 MHz broadcast TV spectrum by the end of March, and said it will start by releasing a public notice for broadcasters in "early fall" about how the application process will unfold.
In an FCC blog post, Gary Epstein, the chairman of the Incentive Auction Task Force, and Howard Symons, the vice chair, explained step-by-step how the FCC will proceed now that the commission has voted on final rules for the highly complex auction. So far, the rules have drawn lukewarm responses from both carriers and broadcasters, whose participation is crucial.
Some analysts question whether the auction will take place by March 29, 2016, as the FCC intends, but the roadmap laid out by Epstein and Symons is intended to quiet the skeptics. Some wireless carriers, most vocally at this point AT&T (NYSE: T), have carped at the rules, especially the fact that the FCC has said broadcasters could be assigned into the wireless bands after the auction, which carriers argue could cause harmful interference. Meanwhile, some broadcasters have been especially dismayed, including the National Association of Broadcasters, which has criticized the FCC for penalizing broadcasters that choose not to relinquish their spectrum "by making those stations the only ones 'eligible' to be placed in the wireless band."
In the blog post, Epstein and Symons said that in the early fall the FCC will release an application procedures public notice, which will "describe the nuts and bolts of the auction application process and post-auction procedures, including the opening dates for the application filing windows, the filing deadline, the schedule for mock auctions and the information required on the auction application forms."
The FCC plans to publicly announce the opening bid prices for the reverse auction no later than 60 days before the deadline for reverse auction applications. In the reverse auction, broadcasters will sell their spectrum at prices that will start high and then descend downward.
The opening bid prices will be calculated using the formula already adopted by the FCC in its auction rules, which were approved earlier this month. The FCC has said that opening bid prices will be based on a TV station's interference and population characteristics, and that this methodology will yield opening price offers in the reverse auction of up to $900 million.
Meanwhile, the FCC will reveal the opening prices later this fall for the forward auction, in which wireless carriers will bid on blocks of spectrum broadcasters have given up. That way, the FCC said, carriers can plan on making upfront payments.
Once all of that information has been released, the FCC will start accepting applications to participate in the reverse and forward auction, and the application windows will close before the end of the year. After the application deadline, the FCC staff will review the applications for completeness and accuracy.
Broadcasters will be able to make minor modifications or corrections necessary to complete their applications, and then, by March 29, 2016, each participating broadcaster that has completed an application must commit to whether it wants to sell all its spectrum, engage in channel sharing or move to a lower channel or from a UHF or a VHF channel.
Broadcasters will be bound to give up their spectrum usage rights at the opening bid price that lines up with what they want to do. However, if, in the auction itself, the price offered to the broadcaster drops, the broadcaster is no longer bound to give up its spectrum unless it chooses to remain in the auction at the lower price.
After broadcasters make their initial commitments, the auction system will determine the initial clearing target and associated band plan, according to the FCC. Broadcasters will have the opportunity to participate in a mock auction, and then the reverse auction bidding rounds will begin.
Forward auction applicants with complete applications that want become qualified to bid will be required to make their upfront payments after the clearing target and band plan are announced. After upfront payments are made, qualified carriers will also have an opportunity to participate in a mock auction. The first round of the forward auction will start no sooner than 15 business days after the FCC releases the list of qualified forward auction bidders.
This fall the FCC will offer workshops, webinars and an interactive on-line tutorial before applications are due. The agency will also be providing a technical hotline during the application and bidding processes.
For more:
- see this FCC blog post
- see this Broadcasting & Cable article
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