TV Spectrum Auction Order – The First Step

It took a few weeks after their narrow 3-2 vote, but the FCC did publish its Incentive Auction Report & Order (“R&O”) in early June, the first step of many in a long process that could repurpose some TV spectrum for wireless use. If you’ve taken the time to find it, you already know that the R&O is 484 pages long, which may be a record for the FCC (we’re checking). We are still deciphering the order and will advise clients on the specifics in July.

In the meantime, the FCC is now on an all-out blitz to convince broadcasters to voluntarily participate in the auction (remember, without participation, the spectrum auction will fail). And they’re not wasting any time, or sparing anything. The FCC has already hired a New York based investment firm, Greenhill & Co. (reportedly for $150,000). The firm is apparently preparing a “book”, including a financial analysis, to help station owners decide whether to throw in the towel.

Meanwhile, the NAB has publicly taken the position that the Incentive Auction R&O and accompanying rule changes do not follow Congress’ edict that broadcaster auction participation be voluntary. Litigation over the order is likely. At the same time, NAB is continuing its efforts to obtain information about the FCC’s repacking plans. At NAB’s urging, the FCC has finally released the data files used in the new OET-69 interference software, though interestingly, that move came only after the FCC, in the auction rulemaking, rejected every NAB argument opposing use of the new software for bid selection and repacking. The data release is a critical step, as this software will be used to optimize TV channel assignments during the repacking process (though this could central to NAB’s legal challenge). Optimization/repacking decisions will happen very quickly during the actual auction process so the FCC can determine which bids to accept or reject.

In a related action, the FCC has asked for comment by July 11, 2014 on how they plan on measuring the interference potential from wireless LTE (long-term evolution) to DTV receivers. That decision will factor into how the FCC structures adjacent LTE/DTV spectrum bands.

As a backdrop to all of this, the two FCC Commissioners who dissented from the auction R&O as unfair to TV station owners are decrying the recent impact of the FCC’s ownership decision making TV joint sales agreements attributable, which has forced some station owners to shut down stations in order to come into compliance with the ownership rules.

In short, the landscape is as muddled as it has been on the TV front in some years, but perhaps never as interesting in terms of a modern-day spectrum duel that will play out incrementally.