WASHINGTON—The FCC has issued its long-awaited Report and Order addressing the Congressionally mandated incentive auction and repacking of television broadcast spectrum. However, the 482-page document contains relatively little new information.
In brief, the document—FCC 14-50
—describes the creation of a band for new wireless services in the 600 MHz spectrum region. The FCC’s band plan for these services recognizes two sectors—one for “uplinking” and one for “downlinking.” As described by the commission, the uplink portion of the band "will begin at [television] Ch. 51 and expand downward, followed by an 11 MHz duplex gap and then the downlink portion of the band."
Several scenarios for the wireless band were offered in the document, depending upon the amount of spectrum that broadcasters are willing to give up within a given geographic area. Cleared spectrum within this "Ch. 51 and down" region would be offered in five MHz blocks to the highest bidders once it is vacated by broadcasters. (Such an allocation of spectrum is in accord with the FCC’s original plan in its Oct. 2, 2012 Notice of Proposed Rulemaking.) [See note below.]
The R&O again reassured all full-power and Class A UHF television stations that they would not be forced to vacate currently occupied operating frequencies; all moves would be strictly voluntary and there would be space for stations wishing to carry on with their broadcasting activities as usual.
The FCC also reiterated its promise that full-power station “service areas” and Class A “protected contours” would be maintained regardless of the auction and any spectrum reassignment. “We will not allow any channel reassignments that, considered on a station-to-station basis, would reduce a station’s population served by more than a de minimis (0.5 percent) amount,” the commission said.
The R&O makes provision for operation of white space devices and wireless microphones within the newly reallocated and repacked spectrum.
A guarantee was also made concerning Ch. 37 (608 to 614 MHz) spectrum. (This 6 MHz chunk has been off-limits for a long time as it was reserved exclusively for radio astronomy purposes. In later years, wireless medical devices—Wireless Medical Telemetry Service or WMTS—have been permitted to “squat” in this space so long as radio astronomy wasn’t impacted.) The new rules state that the FCC will not relocate WMTS or RAS from Ch. 37 and promise to implement guard bands to protect legitimate Ch. 37 spectrum users.
THE AUCTION PROCESS
The rules for the incentive auction appear unchanged, with the document spelling out rules in detail for both reverse and forward auction processes.
Stations are specifically warned that they are prohibited from communicating “directly or indirectly” with each other regarding bids or bidding strategies during the auction process, from the initial application filing deadline to the final announcement of auction results and repacking arrangements.
While terming the incentive auction a “once in a lifetime opportunity” for television broadcasters as mentioned, the R&O affirms that stations will not be forced to give up their current channels. However, the commission is encouraging broadcaster participation by establishing a simplified process for offering up spectrum. Under the new rules, broadcasters can establish before the reverse auction, the lowest amount they will accept and they can drop out of the auction if bids are not up to expectation without tipping their hand. The FCC promises to keep station identities confidential during the auction and for a two-year period after its conclusion, except in the case of winning bidders.
For stations wishing to participate in the auction, yet not wanting to go off the air, the rules provide options for relocating to a VHF channel or sharing a channel with another area broadcaster. The R&O also includes provisions for current high-band VHF operators to move to low-band V channels.
The FCC will create an outreach program to help educate broadcasters about the auction process.
THE POST-AUCTION TRANSITION PROCESS
The R&O requires broadcasters to clear auctioned spectrum no later than 39 months after the repacking process becomes effective. Stations electing to give up their licenses or move to channel sharing arrangements must cease operations on pre-auction channels within three months after receiving proceeds from the auction.
Broadcasters opting to continue operations must transition to new channel assignments within 39 months. The R&O recognizes that repacking procedures will vary from market to market, and will individually assign stations a transition deadline within the 39-month period which reflects individual circumstances.
Stations will be reimbursed for expenses “reasonably incurred” as part of the relocation to new operating frequencies during the repacking process, with some $1.75 billion authorized to cover such expenses under the “Spectrum Act.” The R&O also addresses reimbursement of MVPDs in connection with “costs reasonably incurred in order to continue to carry the signals of stations relocating to new channels.” “Reasonable” costs, include the rental or purchase of equipment necessary to maintain operations on an interim basis during repacking. Specifically excluded are any claims for lost revenues that might be incurred during the reverse auction and repacking process. The FCC is required to settle all valid reimbursement claims within three years after completion of the forward auction.
Upon release of the R&O, FCC Chairman Tom Wheeler stated that the action would make better use of spectrum, allow the expansion of mobile wireless coverage, and ultimately increase competition and drive down prices for mobile service consumers. He noted too that the auction in itself was something of a “first” for the country and marketplace practices.
“This new approach to the marketplace could revolutionize how spectrum is allocated,” he said. “The Incentive Auction will harness market forces to reallocate valuable low-band (below 1 GHz) spectrum from television broadcasters who voluntarily choose to relinquish some or all of their spectrum usage in exchange for incentive payments wireless providers who will bid against each other to buy those frequencies to provide mobile broadband services,” said Wheeler.
Wheeler noted too that broadcasters would benefit too.
“The auction will also provide a game-changing financial opportunity to broadcasters and fully fund the Public Safety Trust Fund for FirstNet,” he continued. “New channel-sharing technologies offer broadcasters a rare opportunity for an infusion of cash to expand their business model and explore new innovations, while continuing to provide their traditional services to consumers.”
Wheeler also observed that the R&O would open up unlicensed spectrum for Wi-Fi-like applications on a national basis, “…providing economic value to businesses and consumers alike.”
He further noted that wireless microphone users needs had also been addressed in the R&O.
“These [wireless mic] users provide invaluable services to American consumers, and we will continue to develop a framework of solutions to ensure that the spectrum needs of these users will be met in the future.”
Reaction from other commissioners concerning the adoption of the R&O was not as rosy or flattering as that offered by Wheeler. Commissioner Ajit Pai, in particular, expressed dissatisfaction with the document and the changes it would signal. Pai voted no last month when the FCC introduced the R&O.
“When the commission adopted its Notice of Proposed Rulemaking in this proceeding 20 months ago, I shared several principles that would guide my deliberations,” Pai said. “In particular, I said that we should keep the auction as simple as possible, be fair to all stakeholders, and remain faithful to the statute passed by Congress. Unfortunately, this item strays from each of these principles. In both the reverse and forward auction, the commission forsakes simplicity for unnecessary complexity, primarily for the purpose of manipulating the market to suit its chosen ends. The rules that we adopt are not fair to many important constituencies, including taxpayers, public safety officials, broadcasters, rural Americans, and those wireless carriers that have chosen to participate in past auctions. And the commission at key junctures substitutes its own policy preferences for the direction provided by Congress in the Spectrum Act.”
Pai added that he felt the shift in television station facilities stemming from the auction would ultimately leave many without access to off-air television service. He specifically cited the lack of provision in the R&O for priority treatment of TV translators.
“I am also concerned that today’s order is unfair to rural Americans,” said Pai. “Those who live in rural areas often rely on translators for free, over-the-air television service. The incentive auction will require many of these translators to relocate, and some may disappear entirely because there will not be room for them once spectrum is reallocated and television stations are repacked.”
He observed that in setting forth the R&O the commission overlooked a proposal made in the NPRM for giving preference to broadcasters providing local service to smaller communities.
“As a result, there is a greater risk that some Americans will be left without any over-the-air television service after the incentive auction,” Pai said. “This is wrong. As is too often the case, rural America may be left behind.”
[Note: An earlier version of this story referenced 608 MHz as the top of the 600 MHz wireless service downlink band. This is just one of several possible scenarios and has been omitted in this updated version of the story.]