WASHINGTON—Potential bid prices, a spectrum clearing target, final channel assignments and other logistics of the Spectrum Incentive Auction will be put to vote next month when the Federal Communications Commission considers a Public Notice seeking comment on the finer points of the auction.
An FCC official described it as “proposals to the commissioners to create proposals from.”
The PN will seek comment on establishing a reserve bid price for each volunteered 6 MHz. This is the so-called “reverse auction,” where TV stations can elect to surrender their 6 MHz licenses at a given price. If set too low, broadcasters have no incentive to participate. If set to high, the auction could drag on indefinitely.
The commission is shooting to assess license value using population served and post-auction interference probability in a “dynamic reserve procedure” enabling it to “tweak” prices based on location—both on the ground and in the spectrum.* I.e., the commission can offer a higher price to stations in desired bandwidth where there may not be a lot of competition in the reverse auction.
The reserve bid prices represent the dollar amount stations can choose to accept for their 6 MHz. If there are no takers, the price will drop in successive rounds and broadcasters can drop out at any time if their own threshold is not met.
The final reserve bid prices in the reverse auction may or may not reflect those put forth by the FCC Oct. 1 in the “Greenhill Report,” which employs the interference-population formula applied to a strictly hypothetical figure yielding “high-end estimates,” according to FCC officials. (See “$45 Billion Auction Projection Rests on AT&T’s DirecTV Acquisition Pledge.”)
With regard to the forward auction, where wireless providers step in and start bidding for spectrum, the commission will establish reserves prices based on population served weighted by past auction relative pricing. Simply put, populations in some areas—metro-adjacent markets, for example—are worth more.
Additionally, the PN will update wireless carrier qualifications, including bidding eligibility based on how much spectrum at what frequencies they already hold.
It also includes a final stage rule establishing the spectrum-clearing target and the benchmark for megahertz price per population. (E.g., the average MHz/pop price for the 2008 auction of TV channels 52-69 was $1.22.) The spectrum clearing target will comprise “near-nationwide coverage” accounting for the number of impairments across the country. Spectrum may be “impaired” for wireless use due to predicted interference to or from TV stations where assigned frequencies for each may overlap.
In terms of a hard and fast number, the commission won’t know how much spectrum it ultimately will auction off because broadcaster participation is confidential. The FCC will not begin accepting applications for auction participation until the fall of 2015.
At the very least, the commission would like to clear the spectrum above Channel 37, which will continue to be reserved for radio astronomy and medical telemetry. This would free 84 MHz of spectrum between Chs. 37 and 51, the current top end of the TV spectrum. It would be offered in seven, paired 5 MHz blocks for up/downlink service with an 11 MHz buffer zone between the two. Other band plans have been proposed should more than 84 MHz become available at auction.
Finally, the PN will outline factors to consider in the provisional and final channel assignments in the repack, based on relocation costs and interference potential.
A likewise Public Notice typically would be released at the bureau level, but the full commission is required by its own order to attend to the details of the auction. The PN will be voted on by the full commission at its montly open meeting Dec. 11.
*Doug Lung takes a deep dive into the interference probability calculation method in “FCC Outlines Rules for Predicting and Limiting Interference in Repacking.”
Also see…
November 13, 2014, “Feds to Take Auction Pitch on the Road”
Regulators are taking their spectrum incentive auction pitch on the road after the holidays, with bid figures based on interference rather than enterprise value.
September 30, 2014, “FCC Drills Down Into AuctionItems”
Regulators issued several rules and proposals related to the 2015 TV spectrum incentive auction.
September 26, 2014, “FCC Proposes Post-Auction Reimbursement Forms”
The FCC has released a draft of its reimbursement form for TV stations to recoup some of their expense for relocating after the 2015 spectrum incentive auction.
September 26, 2014, “T-Mobile: 84 MHz of UHF Spectrum Can Be Reclaimed With Limited Impact on TV”
In an ex-parte filing earlier this month, T-Mobile USA demonstrated that the 600 MHz incentive auction can “readily clear at least 84 MHz of spectrum” without the participation of major network stations.
June 23, 2014, “FCC Seeks Feedback on LTE-to-DTV Interference”
The OET seeks to supplement the record in the incentive auction proceeding by inviting comment on measurements of wireless Long-Term Evolution interference into digital television receivers conducted by OET engineers
June 3, 2014, “FCC Sets Forth Rules for Incentive Auction”
The FCC has issued its long-awaited Report and Order addressing the Congressionally mandated incentive auction and repacking of television broadcast spectrum.
May 15, 2014, “Divided FCC Passes Incentive Auction Order”
The FCC passed an incentive auction order codifying the use of contested technology and giving broadcasters 39 months to move. It also establishes a 5 MHz band plan, assumes a set-aside channel in each market for unlicensed devices, and allows low-power TV stations and translators to continue operating in reassigned channels until the new airlords take over.
April 18, 2014:“FCC Outlines Incentive Auction R&O on May Meeting Agenda”
Broadcast TV reception will be preserved for the same viewers, rather than the same number of them, after next year’s spectrum incentive auction, FCC executives said Friday in a conference call.
June 13, 2013, “TV Band Plan Proposals Diverge”
No single solution is emerging for how the TV spectrum should be configured following next year’s incentive.
Feb. 23, 2012: “Obama Signs Spectrum Auction Authority Bill”
TV spectrum can officially go on the auction block.
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