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FCC to vote on broadcast incentive auction rules July 16

FCC Chairman Tom Wheeler FCC Chairman Tom Wheeler at NAB 2014

The Federal Communications Commission is closing in on the key details for the rules that will govern the broadcast incentive auction and is planning to issue a procedural public notice in time for a vote at the commission’s monthly July 16 meeting.

Commission staff briefed commissioners’ staff on the proposed recommendations on Tuesday, chairman Tom Wheeler wrote in a blog post.

Planned for early 2016, the two-sided auction, which will transfer spectrum voluntarily relinquished by broadcasters for wireless use, is the most complex ever attempted. For months, broadcasters, wireless companies, public interest groups, and other interested parties, have been lobbying the FCC over the rules.

“It is now time to end the back-and-forth and make decisions. No single party will be happy with everything we’ve done, but the final product is a balanced solution to a challenging situation with more moving parts than a Swiss watch,” Wheeler wrote. “One message we heard loud and clear, however, was that the final rules must be as simple as possible. We have thus eliminated earlier ideas that added to complexity.”

With the success of the auction riding on broadcaster participation, the FCC has also been busy in conducting outreach to stations in all markets. The plan, Wheeler said, “aims to clear the highest possible amount of spectrum for broadband consistent with broadcasters’ voluntary decisions to relinquish some or all of their spectrum usage parts.”

For the most part, the rules that will be proposed next month should make it easier for broadcasters to participate in the auction, according to a source familiar with the meetings between the FCC and stakeholders. The agency has already adopted an order last Friday giving broadcasters more flexibility about when stations can cut deals with other stations to share a channel.

The FCC plans to drop dynamic reserve pricing (DRP), a method of pricing that could have lowered station prices. Although the FCC is killing DRP, it rejected a proposal from would-be station sellers for a more preferred pricing formula that takes into account population covered by the station.

The agency is also leaning towards keeping the reserve spectrum set aside for smaller wireless carriers (any company other than AT&T and Verizon) at its current 30 MHz. That won’t please T-Mobile, Sprint, Dish and others have been pushing for the FCC to increase the reserve, but broadcasters fear that could lower prices.

Broadcasters will also get more transparency about the progress of the pricing during the reverse auction bidding process.

“No single party will be happy with everything we’ve done, but the final product is a balanced solution,” Wheeler wrote.