FCC requests comments on details of spectrum auction rules

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After hearing statements of dissent from its two Republican commissioners, the FCC approved on a party-line vote Wednesday the release of a notice requesting comment on the nuts and bolts of the upcoming broadcast spectrum auction.

The notice, which will be issued later this week, considers complex specifics of the auction of interest to broadcasters, such as calculations to determine opening bid prices and the process for reassigning television channels. It builds on the commission’s Incentive Auction Report and Order and Mobile Spectrum Holdings Order adopted in May, which set basic rules.

Congress asked the commission to conduct the voluntary auction to clear bandwidth for mobile devices. Television broadcasters must decide whether to participate by selling off spectrum and dropping their licenses, selling a portion to share a channel with another station, switching from UHF to VHF, or not participating at all.

Among the proposals in the public notice:

  • That a UHF station’s opening price for moving to a low VHF station (channels 2 to 6, more prone to interference) should be 67 percent to 80 percent of the opening price for fully relinquishing its license. The opening price for moving to a high VHF station (channels 7 to 13) should be 33 percent to 50 percent of that price.
  • Minimum opening bids should be established by assigning a number of “bidding units” to each license based on factors such as population and relative prices from past auctions.
  • For channel repacking following the auction, the FCC should try to keep stations on their pre-auction channels and avoid reassignments with high relocation costs.
Pai

Pai

Republican Commissioner Ajit Pai objected and said the rules “introduce unnecessary complexity into the incentive auction. They restrict participation . . . instead of allowing market forces to govern.”

“I wish parties the very best of luck as they plan to comment,” Pai said, “because they’re going to need it as they try to decipher what these proposals mean and how they’re supposed to work.”

O'Rielly

O’Rielly

Commissioner Michael O’Rielly, also a Republican, said that “sadly, at this point, I do not have confidence that the complex and confusing proposals in this public notice will maximize revenues or ensure that the spectrum goes to its highest valued use.”

Recognizing the political disagreements, Commissioner Mignon Clyburn, a Democrat, noted that when Congress asked the FCC to conduct the auction, it presented “more than engineering and auction design challenges. We were faced with a character challenge. We could let doubt and acrimony minimize the success of the auction, or when it comes to a few topics, we could agree to disagree, then through collaboration proceed to design a framework that would honor the ingenuity that brought us the Internet and fueled the next generation of mobile broadband innovation.”

Commissioner Jessica Rosenworcel, also a Democrat, said that “the art and science of reclaiming old airwaves and repurposing them for new wireless use is not for the timid or fainthearted. There is a lot of work to do,” and it’s the responsibility of the commission to make it work.

“What is important,” said FCC Chair Tom Wheeler, also a Democrat, “is that this is a notice, as we’ve all said. We’re seeking comments on proposals, not making final decisions.”

Comments are due by Jan. 30, 2015, with reply comments due by Feb. 27. Next up is a Procedures Public Notice that will set final auction details and provide explanations and instructions to potential participating stations.

 Questions, comments, tips? sefton@current.org