—The Federal Communications Commission 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.
The order itself was unavailable at press time, but discussion during the
commission’s open meeting on Thursday suggested little new information. One item on the staff
summary issued after the meeting was notable:
“The rules will grandfather existing broadcast stations that would otherwise no
longer comply with media ownership rules as a result of the auction,” it
The summary also gave cursory mention to an inferred set-aside channel for
unlicensed devices and wireless mics:
The order “designates one naturally occurring white space channel in the
remaining TV band in each area for use by unlicensed devices as well as
The legal meaning of “naturally occurring” was not provided, nor were details
on how the $1.75 billion repacking funds will be allocated. Congress designated
$1.75 billion in auction proceeds to help cover the relocation costs
of displaced broadcasters. During the staff presentation at the meeting, it was
suggested that fund may be available for reasonable expenses before they are
The LPTV/translator easement allowing extended operation was new. LPTVs and
translators are not allowed to participate in the auction and could be squeezed
out in the repack. Commission Mignon Clyburn, an LPTV champion, said the FCC will undertake a separate
rulemaking on potential auction-induced LPTV extinction.
The R&O was referred to by staff as a “framework only,” with details to
come. This did not set well with Commissioner Michael O’Reilly.
“Too many pieces are punted to a later date,” he said.
O’Reilly and his fellow Republican, Ajit Pai, voted “no” on the Report &
Order after each flamed it for the record. Both said it delegated too much
responsibility away from the commissioners. Democrats Jessica Rosenworcel and Clyburn
gave Chairman Tom Wheeler the votes to pass it after each of them deconstructed
Rosenworcel said it was short on information for broadcasters. Stations should
be able to know what their options are without having to hire expensive
consultants, she said. Every meeting she and her staff have had with
broadcasters “yields the same refrain,” she said. “‘We need a number.’”
“Until the agency can provide broadcasters a better sense of what price their
spectrum might yield, including tax consequences,” they lack information necessary
to determine whether or not to participate, she said.
Rosenworcel also questioned the lack of guidance for property ownership between
commercial and noncommercial broadcasters sharing facilities, and asked if
there should be a sharing template.
Pai took the most umbrage. He said the R&O “forsakes simplicity for
complexity in order to manipulate the market.” He said it wasn’t fair to taxpayers,
safety officials, broadcasters and rural markets, offering his dissent just a
few words into his statement.
He said the reverse auction design was unfair to broadcasters in that the FCC
sets the price for each station via “scoring.”
“The commission should not impose a value on particular stations in a reverse
auction. This should be market-based,” he said.
As for the forward auction, where wireless providers bid on spectrum paired in
5 MHz blocks, Pai said, “Let anyone bid on any block of spectrum and let the
highest bidder win.”
Rather, the R&O limits bidders with more than one-third of the low-band
spectrum in a given Partial Economic Area—the FCC’s artificial geographic
parcel for each of the 5 MHz pairs. The use of PEAs is intended to give local
providers an entrée into the bidding, while the big carriers can aggregate their
winnings into a nationwide network if they so choose.
Pai said the R&O was unfair to taxpayers in that it would trigger a tax
hike if the commission doesn’t raise the statute’s expected $27 billion in
revenues, much of which has been spent.
Pai, who grew up in Western Kansas, said the R&O was unfair to non-participating
broadcasters and rural Americans. He said the auction will require translators
to relocate or shut down. The commission could have done more to mitigate the
impact and allowed communities to preserve their own local services.
“As is too often the case, rural America could be left behind,” he said.
Pai also lobbed one for broadcast lobby with regard to the repack.
“I don’t believe the item stays true of Spectrum Act, including ‘all reasonable
efforts’ to preserve coverage area,” he said. “From a policy perspective, I
agree with commission’s decision in this regard—OET-69 changes seem for the
better—but the courts could find them unlawful.”
The R&O adopts TVStudy
methodology for repacking TV stations into fewer channels. TVStudy
is an updated
version of OET-69, which calculates interference based on a set of mathematical
inputs and therefore yields different results from OET-69. The National Association
of Broadcasters ran trials with TVStudy
demonstrate less coverage for a majority of TV stations. (See “NAB:
1,978 Stations Lose Coverage With FCC Repack Software.”
The NAB contends that TVStudy
the 2012 Spectrum Auction Authority bill because OET-69 was in place when it
passed, and the bill states that:
“The commission shall make all reasonable efforts to preserve, as of the
enactment date of this act, the coverage area and population served of each
broadcast television licensee.”
The NAB commended the FCC staff but registered their objection with the
"Simply put, a deeply-divided commission
chose not to fulfill required obligations under the Spectrum Act. It adopted
new coverage and interference software that has not yet worked, potentially
jeopardizing hundreds of TV stations and millions of over-the-air television
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
Feb. 23, 2012:
Signs Spectrum Auction Authority Bill
TV spectrum can
officially go on the auction block.