LEAWOOD, Kan.—A few years ago at the ATSC Annual Meeting in Washington, D.C., a reporter asked a simple question to James (“Jimmy”) Goodmon Jr., now president and COO of Capitol Broadcasting Company, during a panel discussion on the impending TV spectrum repack.

“What’s your repack strategy?” the reporter inquired. “To chain myself to my tower,” Goodmon retorted, winning nods of approval and laughter from many in the audience.

After attending a breakfast sponsored by Palo Alto, Calif.-based law firm Cooley LLP at the 2019 NAB Show, I have one piece of advice for Goodmon and other broadcasters interested in maintaining their over-the-air TV service: Keep the chains handy.

During the event, former FCC Commissioner Robert McDowell, now a partner with the law firm, conducted a one-on-one interview with current FCC Commissioner Michael O’Rielly.

The commissioner, who has demonstrated an interest in TV broadcasters over the years—warning the industry not to fence sit with regards to 3.0 at last year’s ATSC Annual Meeting, visiting Phoenix to view Next Gen TV up close and personal in the Pearl TV-led 3.0 model market and proposing to ease what many see as antiquated children’s TV rules—warned TV broadcasters that he sees another voluntary incentive auction of TV spectrum at some indefinite point in the future.

It’s one thing to hear broadcasters, vendors, consultants, industry advocates, pundits and others speculate about the prospect of another auction; it’s entirely another thing to have an FCC commissioner relay such a warning.

To be clear, O’Rielly did not say that another incentive auction is scheduled, or even planned, but rather that he’s had a sense since his earliest days at the agency as a commissioner that another auction will occur sometime in the future.

Good news, perhaps, for the 858 TV stations that unsuccessfully bid in the reverse auction and were willing to go off air or share a channel for a slice of the pie.

But for those who wish to remain, continue serving their local markets and maybe one day soon begin pursuing new revenue opportunities made possible by 3.0, it’s hard to see the silver lining, even if a new incentive auction is “voluntary.”

Sure, neither Congress nor the FCC held a gun to the heads of broadcasters to participate in the first voluntary incentive auction. But there were many other individuals and parties who didn’t volunteer to be part of the process but have been forced to respond nonetheless.

The most obvious are the repacked TV broadcasters, who didn’t volunteer to change channel assignments and endure the disruptions that is causing. Nor did the broadcasters who didn’t change channel assignments but had to engage in tower work to accommodate the real estate requirements of repacked tower mates. Ditto FM broadcasters.

Then there were the transmitter manufacturers and other RF vendors that held on by their fingernails or actually closed up shop when the FCC shut the construction permit window while it took years to set up the auction. Those companies didn’t volunteer for the pain. Nor have the OTA TV viewers who have been or will be required to rescan—in some instances multiple times—to find the repacked channels they wish to watch.

Maybe when the next voluntary incentive auction comes along things will be different, and broadcasters will be in the business of wireless delivery of IP packets.

Maybe Congress and regulators will recognize broadcasters as a vital part of next-generation broadband service, a valued part of a National Broadband Plan 2.0. Maybe broadcasters will even be given the chance to bid on their own spectrum, allowing them to disengage from other takeaways. In lieu of that, take a page from Goodmon’s book. Keep the chains handy.

WASHINGTON—All those TV station employees wondering whether they dodged a bullet in the 2017 broadcast incentive auction can now search for that info, which shows that there were 858 stations willing to give up spectrum, or a little under half of the 1,800 stations the FCC was interested in getting bids from. Those 858 bids totaled a whopping $187,391,861,235.

The FCC announced the broadcasters who successfully bid to go off the air or share channels in the auction soon after it closed, but placed a two-year hold on publicizing which broadcasters got outbid.

That two-year moratorium expired Monday (April 22), and the information, plus more data on the reverse auction, has now been made public, with thousands of bids now available for perusal.

The FCC had already revealed that a total of 175 TV stations got payouts for giving up spectrum in the broadcast incentive auction, and 50 wireless bidders—including Comcast/NBCU and Dish—got that spectrum, with the largest single TV station payout $304 million. The largest payout for a noncommercial station was $194 million.

There were 2,200 stations that could have participated—commercial and noncommercial full-powers, plus Class A low powers—but that number was reduced to 1,800 because there were stations that the FCC knew going in they didn't need, for instance in smaller markets where they could get the spectrum out of what was laying fallow.

The legislation creating the broadcast incentive auction had not required the FCC to keep the losing bidders identities secret beyond the end of the reallocation of the spectrum in the forward auction involving wireless bidders on that reclaimed spectrum, but broadcasters had sought a moratorium on unsuccessful bids, ideally in perpetuity.

They had pointed out that "if an unsuccessful bidder’s participation were made public, it could be construed by competitors, investors, advertisers, employees, viewers, and others as a statement by the licensee that it is no longer committed to investing in the station’s programming and operations going forward."

The FCC staked out a middle ground in its final rules for the auction.

"Delaying the release of confidential information regarding unsuccessful bids until two years after the effective date will permit sufficient time to pass to ameliorate the potential competitive harms identified by commenters," it said at the time. 

For more information on the repack, visit TV Technology's repack silo.

WASHINGTON--On Friday, Nov. 30, broadcasters in the first of a 10-phase post incentive auction repack must have completed their move to new channels and ceased broadcasting on their pre-transition channels. Phase two begins Dec. 1.

According to the FCC, more than 140 TV stations in over 20 markets will have moved frequencies when phase one is over, which includes stations that moved from later phases to phase one because they were ready early (see below), but does not include some original phase one stations that asked and got permission to move to later phases. The FCC built such flexibility into what is a Rubik's cube-like repack of stations.

For example, in just the last week the FCC granted requests from four stations to move from phase one to a later phase.

At press time, 94 stations across all 10 phases had gotten permission to move to another phase, both earlier and later, with more such requests in the pipeline, according to the FCC.

The commission has been keeping a log of those changes, so to check out just what a complicated and challenging exercise the repack is, go here.

Most of a thousand TV stations are being repacked in a process that extends to July 3, 2020, the deadline for the last phase to be completed in the 39-month process, though it could go longer since there is an extension available for up to 180 more days if, "despite all reasonable efforts, the station is unable to complete construction of its new facility on time due to circumstances that were either unforeseeable or beyond its control."

[Read: Repack Begins, Deadlines Tight]

Some of the stations that had already moved before the phase one deadline were paid by T-Mobile to exit sooner than scheduled so it could get earlier access to broadcast spectrum it won in the auction. Many hurricane-affected stations in the Virgin Islands and Puerto Rico were allowed to move to "phase zero" as well—rather than have to re-rebuild on their old channels then turn around and re-fit them for new channels.

Some argue that phase one was actually phase two given the early moves by many stations, but "phase zero" was more of an informal moniker for all the stations asking to make their switches before the phase one deadline.

Stations were required to move after 175 broadcasters relinquished rights to 70 MHz of spectrum in the broadcast incentive auction and the FCC needed to squeeze the remaining stations into smaller space to free up clean swaths of spectrum for wireless broadband companies like T-Mobile.

Stations moving to new channels have to modify their facilities—antennas, towers, transmission lines—to transmit on a different channel, then test that equipment (phase one testing began Sept. 14), all while remaining on the air and serving their local communities. Many had to coordinate with one or more other stations to prevent interference during testing.

The FCC is compensating broadcasters for their moves—and some MVPDs for re-tuning headends to the new channels—out of a congressionally mandated repack fund of a couple billion dollars.

For all the latest news and insight on the repack, visit our repack silo.

WASHINGTON—The American Cable Association says MPVDs and full power and Class A TV stations should get priority access to $400 million in 2019 incentive auction relocation funds before FM radio stations or low powers and translators get a share.

The latter were initially not included in the fund, set up to compensate broadcasters and MVPDs for costs of the post-incentive auction repack, but Congress earlier this year made them part of the fund, directing funds for 2018 specifically to FMs ($50 million) and low powers and translators ($150 million), but was less clear about the 2019 funds.

In proposing a framework for allocating that money, the FCC noted the lack of specificity about the 2019 funds and asked whether it should prioritize MVPDs et al. before FMs and low powers. ACA says definitely.

ACA told the FCC in comments this week that it is certainly feasible that MVPDS, full powers and class A's may need all $400 million, and if that is the case, they should get it.

"It would be unfair, therefore, to permit others—including LPTV, TV translator, and FM stations—to access the funds appropriated for 2019 until all entities for whom the reimbursement fund was originally created are fully satisfied," ACA said.

[Read: NAB Urges FCC To Minimize Consumer Disruptions, Wait To Prioritize Repack Reimbursements]

ACA pointed out that while only 136 MVPDs have so far filed for reimbursement—many have to adjust their headends to receive stations being moved in the repack—"hundreds more" are expected to file for reimbursement over the next two years.

Congress has consistently prioritized reimbursement of MVPDs and full power and Class A stations over all others," ACA president and CEO Matthew M. Polka said of the filing.

For a comprehensive list of TV Technology’s ATSC 3.0 coverage, see our ATSC3 silo.

WASHINGTON—If you work in either radio or TV and are about to embark on a “repack” project (as I am) then what you are about to read may not seem very amusing at all.

The incentive auction has been over for quite some time, and we can now point to the following facts:

• Verizon indicated initially that they were going to participate, but in the end, did not
• AT&T is already selling the 600 MHz spectrum that it picked up
• Sprint never participated
• T-mobile ends up the only one of the big four that collected a substantial amount of 600 MHz spectrum

“The incentive auction largely sprang from Congress’ National Broadband Plan in 2010, which tasked the FCC with conducting a first-of-its-kind of auction that paid TV broadcasters to relinquish their 600 MHz licenses so that wireless carriers and others could buy them in an auction,” according to fiercewireless.com. “Expectations were high...Prior to the start of the auction, Moody's predicted it could generate as much as $60 billion in winning bids. After all, AT&T said in 2014 it would purchase between 20 MHz and 40 MHz of spectrum in the auction...but the auction only ended up generating roughly $20 billion in winning bids.”

To be fair, $20B is nothing to sneeze at, but it represents only a fraction of what was originally expected. AT&T now has access to a swath of 700 MHz spectrum because of its FirstNet deal, so the spectrum they bought is already expendable. The other major incentive auction winners included Dish Network, Comcast and U.S. Cellular. U.S. Cellular will likely build out its 600 MHz holdings, but it’s unclear whether Dish and Comcast will actually use theirs, according to the same article. Dish has said it will build an IoT network. Comcast could use its 600 MHz spectrum for its Xfinity Mobile or its own IoT network known as MachineQ.

So what has really happened here? Why has the 600 MHz “beachfront” property suddenly dropped off in value? The reality is that technology moved along a lot faster than the U.S. Government did. Spectrum owners are using what they already have in more efficient manners. Verizon, as an example, is using MIMO (multiple in, multiple out), non-licensed Wi-Fi spectrum (i.e., LAA), smaller cells and carrier aggregation. In addition the big four and others are increasingly interested in milli-meter wavelengths too, especially when it comes to 5G.

I hope we don’t look back a few years from now and call this entire debacle a complete waste of time. 

This article originally appeared on TVT's sister publication Radio. 

For more information on the repack, visit TV Technology's repack silo.

WASHINGTON—The first filing deadline of Transition Progress Reports for full power and Class A stations that will be changing channels during the post-incentive auction transition is Oct. 10, per an FCC reminder. The progress reports must provide information regarding steps stations have taken toward construction of their post-auction facilities from July 1 to Sept. 30, 2017.

The filing of quarterly reports became mandatory with the first full quarter after the release of the “Closing and Channel Reassignment Public Notice” that came out on April 13. All progress reports must be filled using Form 2100, Schedule 387, which is available through the FCC’s Licensing and Management System.

For additional information on Form 2100, Schedule 387, contact Joyce Bernstein or Hossein Hashemzadeh.

WASHINGTON—The Federal Communications Commission today announced the conclusion of the TV spectrum incentive auction. The assignment phase, where winning wireless bidders vied for specific frequencies, concluded today as planned. The final take was $19.8 billion. Specifically, the commission added another $136 million in the frequency-assignment phase of the auction.

“Today’s conclusion of the assignment phase formally brings all bidding activity in this multi-phase auction to a close,” said Auction Task Force Chairman Gary Epstein. “The incentive auction has required unprecedented commitment from bidders as well as commission staff, who from the moment that broadcasters made their initial commitments to the final bids processed this afternoon have worked each day to assist bidders and ensure a fair and successful auction. We are excited to share the results of the reverse and forward auctions and extensive information about the post-auction transition in the next few weeks.

From the commission’s spectrum auction Dashboard site: “The FCC will release the Incentive Auction Closing and Channel Reassignment Public Notice in a few weeks. This public notice will announce the results of the reverse and forward auctions and will provide important information, reminders, and details regarding post-auction procedures and the obligations of successful bidders in the reverse and forward auctions. On the same day, each forward auction applicant that became a qualified bidder will receive an email with a link to the location of the public notice on the commission's website. A few days later, forward auction bidders will receive a package that includes the form needed to make payments for winning bids and an envelope for returning the RSA SecurID tokens used to access the auction system.

“The day after release of the Incentive Auction Closing and Channel Reassignment Public Notice, the commission will make available complete forward auction round-by-round results, including bidder identities. These results will be available to bidders and to the public in the Public Reporting System [aka , the “Dashboard.”

“Before the end of the day tomorrow [Friday, March 31, 2017], a document [specifying the file formats of the reverse and forward auction results will be published after the Incentive Auction Closing and Channel Reassignment Public Notice is released. It will] be available under the Data section of both the Auction 1001 and the Auction 1002 websites.” 

“In addition, an online tutorial on the immediate post-auction process for the forward auction will be available under the Education section of the Auction 1002 website.

“We suggest that bidders also review the Post-Auction Process section of the Applications Procedure Public Notice (DA 15-1183), released Oct. 15, 2015.

“Bidder access to the auction system for the assignment phase will be available until 5 p.m. Eastern on Tuesday, April 4, 2017. Bidders that wish to download their results files for the forward auction assignment phase should do so before that time.

“The Auction Bidder Line will be available until 5:30 p.m. Eastern time today. If you have further questions after that time, please call the Auction Hotline at 717-338-2868.

“We remind all forward auction applicants that they remain subject to the commission’s rules prohibiting certain communications relating to the incentive auction until either: with respect to communications with broadcasters, the completion of the incentive auction as announced by the Incentive Auction Closing and Channel Reassignment Public Notice; or, with respect to other forward auction applicants and related parties, until the winning bid down payment deadline. All forward auction applicants remain subject to the prohibition regardless of developments during the auction process and regardless of whether they qualified to bid or became winning bidders.”

For more TV Technology coverage, see our spectrum auction silo.

WASHINGTON—The TV spectrum incentive action is going into lightning rounds as the prices inch up in a handful of smaller markets where demand continues to exceed supply. Bidding will go from four, one-hour rounds to six lasting 40 minutes each, beginning Wednesday, Feb. 8 at 10 a.m. ET.

Bidding continued in just 26 out of 416 wireless licensing partial economic areas (PEAs) at the end of round 41 on Tuesday afternoon. Most were in smaller markets, with only two in the top 100, and none larger than South Bend, Ind., at No. 64. Both reserved and unreserved spectrum remained active in South Bend, No. 167 Harrisonburg, Pa.; and No. 378 Waynesboro, Ga., for a total of 29 active bidding areas. Of the 29 remaining in play, the price exceeded $1 million in just seven.

Over the course of Tuesday in the space of four auction rounds, demand was met in 26 areas leaving the 29 areas in play for round 42 Wednesday morning.

Bids totaled $19.5 billion ($19,497,368,002) at the end of R41, up $12.1 million from the previous round. The opening round of the auction generated $17.7 billion. Another $1 billion was added after 16 more rounds of bidding in which prices increased in 5 percent increments. Twenty-four more rounds, during which the price boost went to 10 percent increments, yielded another $827 million.

As demand and supply crept into equilibrium, the Federal Communications Commission speeded up the bidding process and began preparing for the post-auction transition. Most recently, it lifted the quiet period pertaining to broadcasters, allowing them to communicate with one another about their post-auction strategy. It also extended the comment period on its TV channel repack reporting proposal and updated the software it will use to assign channels during the process.

In a matter separate from the spectrum auction but integral to the repack, the commission also proposed a strategy for adopting ATSC 3.0, the so-called “next-gen” broadcast transmission standard, now under development at the Advanced Television Systems Committee. (See “FCC@3.0: OET-69, Public Interest, Yes; Tuner Edict, No,” Feb. 2, 2017.)

For more TV Technology coverage, see our spectrum auction silo.

WASHINGTON—The Federal Communications Commission today waived the quiet period that enjoined broadcasters from talking shop during the TV spectrum incentive auction. After the auction closing criteria were met by wireless bidders Jan. 18, broadcasters were no longer subject to another round of reverse auction bidding, and broadcast attorneys started asking when stations could communicate about post-auction repack plans. (See “Broadcast Lawyers to FCC: Can We Talk?” Jan. 30, 2017.)

“The Wireless Telecommunications Bureau waives the rules prohibiting communication between specified parties of any incentive auction applicant’s reverse auction bids or bidding strategies,” the commission said today in a Public Notice. “This limited waiver will serve the public interest in a rapid, non-disruptive post-auction transition by enabling broadcasters and related parties to prepare by communicating post-auction channel assignment information without risk of violating FCC rules. This limited waiver does not affect the rules that prohibit communication of any incentive auction applicant’s forward auction bids or bidding strategies.”

Forward auction participants, who are still bidding for spectrum, will remain under a quiet period until the deadline for down payment on winning bids.

In its auction Bidding Procedures Public Notice released Aug. 11, 2015, the commission said it would impose a “prohibition on communicating information relating to bids or bidding strategies, such as non-public information that bidders may access in the auction system, to broadcast licensees eligible to participate in the reverse auction or to forward auction applicants, subject to specified exceptions,” involving joint ownership and channel-sharing arrangements.

In the same Public Notice, the FCC Media Bureau also noted that it would be sending out confidential letters to all full-power and Class A stations that intend to continue broadcasting confidential letters informing them of their repack channel assignments. These will be going out within “the next few days,” the PN said.

For more TV Technology coverage, check ourspectrum auction silo.

OAKLAND, CALIF.—On Jan. 18, two days before he left office, former FCC Chairman Tom Wheeler released a statement lauding the completion of the incentive auction. “[T]he benefits of the auction are indisputable,” he said. “We will repurpose 70 MHz of high-value, completely clear low-band spectrum for mobile broadband on a nationwide basis. On top of that, 14 MHz of unlicensed spectrum—the test bed for wireless innovation—will be available for consumer devices and new services. The auction will provide $10.05 billion to broadcast television licensees who participated and billions toward deficit reduction.”

The commission and the overall business environment may look quite different with the passage of enough time to see whether the promises of new public service delivery are achieved in practice. But even now, some caveats are in order after the applause dies down and before we ever embark on an incentive auction like this again.

MANY WILL LOSE TV, BUT NEVER SEE NEW BROADBAND SERVICES
Successful wireless bidders in the forward auction will be given a 12-year license term. They will be given six years to provide reliable signal coverage and offer wireless service to at least 40 percent of the population in the license area. In 12 years they will be required to offer reliable wireless service to 75 percent of the license area. They will never be required to offer service to all or substantially all the areas being served.

Television broadcasting, which will be degraded through the loss of many bought-out stations and through removal from Channels 38-50, will see a march backward from what is now almost universal coverage. Nielsen universe estimates for the 2016-2017 season put at 96 percent the number of homes with televisions receiving traditional TV signals via broadcast, cable, DBS or telco. The role of over-the-air TV is growing, not declining. As of the second quarter of 2016, Nielsen reported that 94 percent of households had an HDTV, up from 91 percent in 2015. This compared with smartphones (83 percent), subscription video-on-demand (45 percent), and any tablet (52 percent).

THE AUCTION DISRUPTED, DISFIGURED BROADCAST TV; MORE TO COME
The auction formally began a year ago, when broadcasters were required to submit a form stating their interest by 6 p.m. Eastern Time, Jan. 12, 2016. On that date, strict confidentiality regarding bids and bidding strategies went into effect. Actual bidding started on May 31, and continued until the merciful conclusion on Jan. 17. Because the amount of the spectrum kept changing, TV owners could not know whether their own station would have to move or be displaced. They did not know what monies might be forthcoming, because each stage involved new bids. Because of strict nondisclosure beginning on Jan. 12, 2016, the auction immobilized station sales and equipment upgrades.

Incentive auction winners will be required to surrender their licenses promptly. Their studios, offices and transmitters will become scrap and their staffs will be largely pink-slipped. Up next: Staff publication of a Channel Reassignment Public Notice will start a 90-day period for stations assigned new channels to apply for changes consistent with their new frequencies. Then they will have 36 months and a set-aside of $1.75 billion in reimbursements to get this done. The time and the money were decided long ago, and no one knows whether either one will be adequate.

Claims that reverse auction payouts to broadcasters will be re-invested in TV broadcasting are hard to fathom. By definition, a payee who gives up its channel no longer has it to refurbish. The use of proceeds is unconditional, so that the real “beach front property” may be the one where the former TV broadcaster constructs a retirement villa.

AUCTION PLANNERS OVERESTIMATED THE DEMAND
FCC planners foresaw a revenue bonanza, by projecting from the result of the Advanced Wireless Services Auction (AWS-3), which closed on Jan. 29, 2015, with bids of $41.33 billion for blocks at 1695 MHz and up. But the final stage rule was met with only $18.2 billion offered for 70 MHz.

The wireless companies are still digesting their AWS-3 wins. But they also are beginning to realize that the “beachfront” at UHF may be harder to exploit than cleaner, higher bands. Doug Lung observed (in TV Technology, June, 2015): “As cell sites become more overloaded, wireless carriers increase capacity by adding more sites, so each one serves a smaller number of customers. As the service area of each site is reduced, the long-range coverage of UHF frequencies becomes less important and limiting interference more complicated.” We will have to wait and see how zealous the carriers actually are in building out and marketing for these bands.

U.S. TREASURY BENEFIT OVERSOLD
The incentive auction was sold to Congress as a painless way to reduce the deficit without raising taxes. As Wheeler testified at a House Appropriations Subcommittee, March 27, 2014, “The commission welcomed the statutory authority to initiate and operate incentive auctions because of its benefits to consumers and stakeholders, as well as the Treasury.” It’s now clear that the overage from payments and administrative costs will only be billions in the single digits. With a new Congress hankering for large tax cuts, that windfall is hardly going to live up to its initial PR.


AUCTION CREATED WHITE-SPACE PROBLEM IT IS ‘SOLVING’
Wheeler noted: “14 MHz of unlicensed spectrum—the test bed for wireless innovation—will be available for consumer devices and new services.” But without the removal of Channels 38 to 50 from TV broadcasting, white space was open and available already, throughout the TV band, and the technology existed to exploit it on the local level without destructive interference.

The reservation of 14 MHz for a white space, being set aside nationwide, makes it more likely that this technology will be developed and controlled by a few very large national entities. Ironically, the extinguishing of TV spectrum is being monetized, the wireless spectrum is being repurposed monetized, yet the approach to white spaces makes them available “for free.”

AUCTION REVERSED NATIONAL POLICY FAVORING UNIVERSAL PUBLIC TV
TV stations typically operate on channels reserved for them, under a fundamental FCC policy since 1952. Public TV stations by law may not accept advertising, and their revenue potential is circumscribed by a number of FCC and IRS rules and policies, and in many cases by institutional licensing to government and education. In the incentive auction, no distinction was made between commercial and non-commercial. The public TV stations may be easy or willing targets, but by deliberately killing them off, the incentive auction is an inversion of the long-term policy goal stated in the Public Broadcasting Act of 1967 that “it is necessary and appropriate for the Federal Government to complement, assist and support a national policy that will most effectively make public telecommunications services available to all citizens of the United States.” 47 U.S.C. Section 396(a)(7).

REPACKING MAY SEVERELY DAMAGE RURAL TV RECEPTION
When stations are moved out of the sold spectrum and repacked in Channels 36 and below, the 2012 enabling law instructed the FCC to replicate, as far as possible, the area and population currently covered. In many cases, full service TV stations depend on extended terrestrial coverage, over mountain ranges and into valleys, by means of rebroadcasting TV translators. This coverage is factored into their TV ratings, their maps, their sales brochures, and their rate cards. Yet the planners of the incentive auction decided to treat these translators and their coverage as though they did not exist. Consequently, in the repacking, rural residents in Utah, Colorado, New Mexico, and several other states will face loss of their only practical means of reception.

In the set aside of $1.75 billion to compensate full service TV stations for their moving costs, no funds are provided for TV translator relocation costs. This is in contrast to the DTV transition, where the Department of Commerce had a reimbursement program for rural translators that upgraded to digital. Many of these translator stations are operated by local government and non-profit entities who will be hard pressed to find the money to cover this unfunded Federal mandate.

AUCTION WILL DEGRADE OR DEMOLISH LPTV SERVICE
Class A low-power TV stations have co-equal protected spectrum rights, along with full service TV's. In February, 2013, the Media Bureau began issuing citations based on minor deficiencies such as late or missing children's TV quota reports. The stations were threatened with large fines, up into the five figures. Thirty-seven such letters were issued in one day, on February 12. But the FCC licensees were told that, if they would simply downgrade to LPTV and surrender their Class A spectrum rights, all would be forgiven and the fines would be waived. The cynicism in these actions was clear because, if the stations downgraded, they would no longer even need to do any children's programming at all. This was a brute-force band clearing measure.

Low-power TV stations (non-Class A) have no spectrum rights or compensation rights in the repacking. If anything, the threat to their business from the drawn-out auction and its uncertainties was worse than for full service TV stations. A study by the General Accountability Office looked at possible LPTV losses, based on a survey conducted in the summer of 2016, that obtained 115 responses, representing approximately one-fourth of the licensed 2,063 LPTV stations, and more than 40 percent of the 3,660 licensed translators. The report, published in December, predicted substantial repacking losses of niche programming by LPTV, including specialized cultural programs, foreign language, and Tribal program services. One estimate had the population of licensed TV translators and LPTV's in Channel 38 to 50 at 2,332.

CONCLUSION
The FCC has pursued consistent policies since 1952 that favored a fair, efficient and equitable distribution of radio services among the several states and communities, 47 U.S.C. Sec. 307(b), with first TV service being a foremost goal. Now universal coverage is largely achieved. Homes that never subscribed to cable, satellite or telco TV, or who dropped their subscription were estimated by the end of 2016 as 26.7 million homes, or 21.9 percent of households, up by more than four million homes since 2014, according to a report by Convergence Research Group Ltd. (Canada). The growth of “cord cutters” and of those who never had a TV cord to cut are bringing healthy competitive balance to the overall TV marketplace. Only time will tell whether the sacrifice of these values serves a higher goal, or proves to be a mistake.

Michael Couzens is a communications attorney in Oakland, Calif. A long-time supporter of low power TV and rural TV translators, he is currently vice president-legal affairs for the National Translator Association.

WASHINGTON—Demand for spectrum remained highest in small and mid-sized markets after three rounds of bidding in Stage 4 of the TV spectrum incentive auction—in cities such as Corpus Christi, Texas; Evansville, Ind.; Hannibal, Mo.; South Bend, Ind.; Valentine, Neb.; and Red Oak, Iowa, to name a few. Demand exceeded supply in 184 wireless licensing areas, referred to as “partial economic areas” or PEAs, after Round 3 concluded Thursday afternoon.*

Demand was highest for unreserved spectrum—spectrum not set aside for bidders with little or no low-band wireless spectrum, who in turn have exclusive access to 30 MHz of reserved spectrum in each PEA. Demand for unreserved spectrum exceeded supply in 146 PEAs and for reserved spectrum in 38 PEAs.

Fig. 1, The top 12 of non-top 40 PEAs ranked by demand for unreserved spectrum after Round 3 bidding.

Among the top 40 PEAs in terms of population, supply met demand in all but one after Round 3. Demand for spectrum in Milwaukee (No. 38) exceeded supply five-to-four for unreserved paired spectrum blocks, called “products.” The opening price for those products will be $19.3 million each when Round 4 bidding begins on Monday.

Supply exceeded demand in two of the top 40 PEAs: Los Angeles (No. 2), where product will open at $407.9 million; and San Diego, (No. 18), at $55.6 million, in Round 4.

Fig. 2, The top 12 of non-top 40 PEAs after Round 3 bidding, ranked by Round 4 Opening Price.

Beyond the top 40, demand was greatest for unreserved spectrum in Corpus Christi, Texas, (No. 132) at 14-to-four, with a Round 4 opener of $73,000. Evansville, Ind., was next at 13-to-four, also at $73,000. South Bend, Ind., was 11-to-one and priced at $150,000 for Round 4, most likely because of its proximity to Chicago. (See Fig. 1.)

The highest Round 4 opening price for unreserved spectrum among non-top 40 PEAs was in Charlotte, N.C., (No. 43) at $8.5 million per product. Frederick, Md., (No. 88) a Washington, D.C.-adjacent community, was next at $4.76 million. Knoxville, Tenn., (No. 71) was next at $4.6 million. (See Fig. 2.)

Fig. 3, The top 12 of non-top 40 PEAs ranked by demand for reserved spectrum after Round 3. Demand for reserved spectrum was met in all top 40 PEAs, but not in several mid-sized and smaller markets, including Evansville, Corpus Christi, Guam-North Marianas, Biloxi, Miss., and Hickory, N.C. (Fig. 3.) The highest Round 4 opening price for reserved product where demand remained was in Raleigh, N.C., at $11.5 million. (Fig. 4.) R4 opening product prices for both unreserved and reserved spectrum were the same in all but two of top 40 PEA, and was only slightly higher for unreserved spectrum in several non-top 40 PEAs.

Fig. 4, The top 12 of non-top 40 PEAs after Round 3 bidding, ranked by Round 4 Opening Price. The two closing criteria of the auction were met on Wednesday, Jan. 18, after Round 2, when bids reached $18.2 billion and met a market reserve price. Bidding in Round 4 will begin Monday, Jan. 23, at 10 a.m. Eastern.

* The United States and its territories comprise 416 PEAs, each of which is divided into reserved and unreserved spectrum, creating 832 bidding areas.

WASHINGTON—Today’s opening round of bidding by wireless providers in the fourth round of the spectrum incentive auction yielded $17.7 billion—enough to cover the $10 billion that broadcasters asked for 84 MHz of spectrum in the reverse auction, but not enough to meet the first closing criteria of $1.25 MHz/Pop. A second round of bidding will commence at 2 p.m Eastern.

On Tuesday afternoon, the Federal Communications Commission said it was changing the first component of the final stage rule, which must be met to close the auction: “Beginning in Stage 4, the first component of the final stage rule is no longer based on auction proceeds, but instead will be met when the average price per MHz/Pop for Category 1 blocks in the high-demand PEAs (PEAs 1-40) is at least $1.25 per MHz/Pop.”

Category 1 spectrum represents frequency blocks within the partial economic areas (PEAs) with 15 percent or less interference. That actual price reached in the first round of bidding this morning was off by less than three cents: $1.2239, according to the FCC’s auction dashboard.

The second component comprises broadcaster ask—$10,054,676,822—“plus approximately $1.9 billion of other cost requirements,” the commission said.

The second round of Stage 4 forward-auction bidding will conclude today at 4 p.m. Eastern.

See the archive of TV Technology auction coverage at our spectrum auction silo.

WASHINGTON— Broadcasters asked $10 billion for 84 MHz in the fourth stage of the TV spectrum incentive reverse auction, which concluded as scheduled on Friday, Jan. 13.

The 84 MHz clearing target will yield 70 MHz of spectrum for wireless bidders in the fourth-stage forward auction, with the remaining 14 MHz dedicated to interference buffer zones, or “guard bands.”

The fourth-stage forward auction is tentatively scheduled to begin Wednesday, Jan. 18. The Federal Communications Commission previously said it would confirm this date on Tuesday, Jan. 17—the day after the Martin Luther King, Jr. Day federal holiday —but that “forward auction bidders should be prepared for bidding to begin that day.”

Fig. 1

Click on the Image to Enlarge

Bidding in the fourth stage reverse auction started Dec. 13, following three previous stages that failed to close at higher clearing targets. In Stage 3, broadcasters sought $40.3 billion for 108 MHz, which left 80 MHz for wireless bidders after consideration for guard bands. Stage 3 concluded Dec. 5 after just a single round of bidding by wireless providers yielded $19.7 billion for the 80 MHz offered, a difference of $20.6 billion.

In Stage 2, broadcasters sought $54.6 billion for 114 MHz. Wireless bidders came back at $21.5 billion for 90 MHz after a single, two-hour round of bidding on Oct. 19. The auction commenced last March with a Stage 1 clearing target of 126 MHz yielding 100 MHz for wireless bidders. Broadcasters asked for $86 billion; wireless providers offered $23.1 billon before discounts.

Each successive stage of the auction has targeted sequentially less spectrum for clearing, as illustrated in Fig. 1, with prospective sellers and buyers coming progressively closer in price but not enough to close the auction. (See table below.) Auction observers have noted the current clearing target of 84 MHz is where sellers and buyers are most likely to come together because Ch. 37, which is reserved for radioastronomy, will serve as a de facto guard band between broadcast and wireless spectrum. Therefore, only one 3 MHz guard band between Ch. 37 and wireless spectrum, and one 11 MHz guard band between wireless up- and downlink spectrum is necessary, leaving more of the cleared spectrum available for sale.

“The dramatic reduction in the targeted net proceeds of the reverse auction shows just how effective the auction mechanics have been in bringing together supply and demand," offered Dan Hays, principal of Strategy&. “Such a move was hoped for given the 24 MHz reduction in the spectrum clearing target for Stage 4, and at just over $10 billion, we are confident that the auction is well within striking range of the budgets of mobile network operators.

“It could well close as early as next week, maintaining smaller operators’ access to the 30 MHz of spectrum set aside for companies with relatively little spectrum below 1 GHz. While a fifth stage of the auction is still not out of the question, it is now far from a certainty. For broadcasters, this is a clear indication of extremely strong competition to relinquish their spectrum, even at dramatically lower prices. The ball is now squarely in the court of the wireless industry to bring things to a close.”

Each stage of the auction represents a reverse-forward cycle that ends when either the final stage rule is met, or if there is no more excess demand in the top 40 partial economic areas, or PEAs, which represent the geographic area of license for wireless providers.

The final stage rule comprises meeting a reserve price reflective of market value, and raising enough revenue to pay the aggregate sale price, plus cover a$1.75 billion broadcaster relocation fund as well as the administrative cost of the auction itself.

See more TV Technology coverage at our spectrum auction silo

WASHINGTON—Stage three of the TV spectrum incentive auction has now concluded, with broadcasters seeking $40.3 billion for 108 MHz of spectrum, and wireless providers bidding $19.7 billion for the 80 MHz designated for sale. The forward auction portion of the third stage, which started this morning, appeared to conclude after a single round of bidding, as was the case in the second stage. (Indeed, the third stage forward auction did conclude after one round of bidding.)

“Bidding in the forward auction has concluded for stage three without meeting the final stage rule and without meeting the conditions to trigger an extended round. The incentive auction will continue with stage four at a lower clearing target,” the Federal Communications Commission said on its auction dashboard this morning.

The FCC said it expects to release a public notice this Friday, Dec. 9, announcing the clearing target and the time and date when stage four reverse auction bidding will start, with a current goal of starting it Tuesday, Dec. 13, 2016.

Depending on how many broadcasters elect to continue the process, the clearing target for stage four would be 84 MHz, or 70 MHz for wireless bidders in the form of paired, 5 MHz blocks, and 14 MHz for interference guard bands and some unlicensed usage.

Broadcaster sellers and wireless buyers have yet to reach middle ground in the auction, which commenced March 29, 2016. Broadcasters sought $86 billion in stage one for 126 MHz. Wireless bidders came back with $22.5 billion for 100 MHz after 11 days and 27 rounds of bidding.

In stage two, broadcasters sought $54.6 billion for 114 MHz. Wireless bidders came back at $21.5 billion for 90 MHz after a single, two-hour round of bidding on Oct. 19.

Forward auction bids must fulfill the criteria of the final stage rule for the auction to close. These criteria include raising enough revenue to pay broadcaster ask, plus cover a $1.75 billion broadcaster relocation fund as well as the administrative cost of the auction itself—around $250,000. The bids also must meet a reserve, or benchmark, price set to reflect what the commission considers a fair market price of $1.25 per person per MHz, in the top 40 wireless licensing areas. The benchmark was achieved in all three stages.

Forward auction bidding in all three stages concluded as demand came to equal supply in those top 40 areas before broadcaster ask plus costs were met. The latest results evoked a fiery statement from Preston Padden, former executive director of a now-disbanded sellers’ coalition, who at one point speculated the bids might reach as high as $80 billion:

“This is not an auction. It is a joke and an abuse of the broadcasters, the FCC and the public who will be put through a disruptive repacking process that increasingly looks unjustified. The question is why the carriers lobbied so hard for a statute to authorize an auction of spectrum they don’t want. The carriers now have twice walked away from blocks of spectrum they told Congress was ‘vital’ and for which they predicted bidding as high as $58 billion. (CTIA Whitepaper Feb. 15, 2011) ” (Editor’s note: Mr. Padden followed up with an email noting that the amount cited was $48 billion, not $58 billion.)

SEeo more TV Technology coverage at our spectrum auction silo.

WASHINGTON—Broadcasters participating in the TV spectrum incentive auction are seeking $40.3 billion for the 108 MHz now targeted for clearing.

The reverse portion of the auction, where broadcasters name their price for spectrum, today concluded for a third stage of the incentive auction, as expected. The Federal Communications Commission announced earlier this week that it would step up the pace of reverse auction in order to wrap it up Dec. 1, and to start the forward auction—where wireless providers bid on the spectrum—on Monday.

Sellers and bidders have not yet come together in this auction, which commenced March 29 and is now in the third stage. The ask-bid spread in stage one was $86 billion-$22.5 billion; and in stage two, it was $56.5 billion-$21.5 billion. (Correction: $56.5 billion was the clearing cost. Broadcaster ask was $54.6 billion.)

Each stage represents a reverse-forward cycle that ends when either the final stage rule is met, or if there is no more excess demand in the top 40 partial economic areas, or PEAs, which represent the geographic area of license for wireless providers.

The final stage rule comprises meeting a certain reserve price and raising enough revenue to pay the aggregate sale price, plus cover a $1.75 billion broadcaster relocation fund as well as the administrative cost of the auction itself.

The reserve or benchmark price, $15.9 billion, was established as a baseline for ensuring the TV spectrum being sold was fetching a fair market price. It was calculated by multiplying the number of people served by 70 MHz in the top 40 PEAs by $1.25, or $1.25 MHz/pop.

The benchmark price was achieved in both the first and second stage of the auction and will be determined again in the third when bidding in the forward auction is complete.

The aggregate sale price, as illustrated by the ask-bids noted above, has not been reached. In each subsequent stage of the auction, the total amount of spectrum targeted for clearing is reduced.

The clearing targets are based on 6 MHz, the bandwidth of a TV channel. Thus the clearing targets in each of the three stages (highlighted in yellow on the band plan chart at left) were 126 MHz, 114 MHz and 108 MHz respectively.

However, because the spectrum is being sold to wireless providers in paired, 5 MHz blocks, and because some of the cleared spectrum must be designated for interference guard bands, the total amount of spectrum offered to bidders is less than the clearing target. Thus, the spectrum offered to bidders in each of the three stages respectively was 100 MHz, 90 MHz and, starting with Monday’s forward-auction bidding, 80 MHz.

Bidding will begin Monday at opening round prices that reflect where bidding ended in the previous stage. This amount will increase incrementally between rounds until the final stage rule is met—meaning bids totaling around $42.3 billion—or demand equals supply in the top 40 PEAs, in which case, a fourth stage will be triggered with a likely clearing target of 84 MHz (highlighted in light blue on the chart).

Many observers, including Wells Fargo Senior Analyst Marci Ryvicker, predict the auction will go to a fourth stage because less bandwidth is designated to guard bands (illustrated on the chart as blocks with gray hash marks) at the 84 MHz clearing target, because Channel 37 (orange blocks), which is dedicated to radioastronomy, would serve as a buffer between the broadcast band (white blocks) and the wireless band (blue blocks).

The commission announced on Monday, Nov. 28, that the third-stage reverse auction would wrap today because it would reach round 52, where the provisionally offered price would reach zero. Prices are reduced between sequential rounds by five percent or 1 percent of the opening price.

Two additional rounds were scheduled for any orphaned VHF stations. These are defined by the bidding status of “frozen—currently infeasible,” meaning there’s no VHF channels left in that station’s market, but one may open up in subsequent rounds. The extra rounds were not needed.

See more coverage at the TV Technologyspectrum auction silo.

WASHINGTON— Broadcasters will set their final collective asking price for 108 MHz of TV spectrum on Thursday, and bidding by wireless providers for 80 MHz of that spectrum will start four days later, on Monday, Dec. 5.

The Federal Communications Commission today announced that bidding in the third-stage reverse auction, in which broadcasters set their sale price for 108 MHz, will conclude with five individual rounds scheduled for Dec. 1.

“Under the current bidding schedule and decrement, the base clock price will reach $0 in round 52, which will be held Thursday, Dec. 1,” the commission’s auction dashboard states. “As a reminder, it is possible for the auction to take up to two additional bidding rounds beyond the point at which the base clock price has reached $0 if the final bidding status has not yet been determined for any VHF stations.”

The schedule through Wednesday will include three, one-hour rounds per day. On Thursday, one-hour rounds will commence at 10 a.m. and 1 p.m., with three half-hour rounds beginning at 3, 4 and 5 p.m., all times Eastern.

The commission said it would announce the initial bidding schedule for the third-stage forward auction the day after reverse auction bidding ends, which would be Friday. It recommended that forward auction participants be prepared for bidding to begin Monday.

The auction stages represent the number of attempts made to close the auction at an incrementally reduced amount of spectrum, or “clearing target,” in FCC parlance. Each clearing target represents the total amount of TV spectrum to be cleared, but not sold, because some must be reserved for interference buffer zones and guard bands. The remaining spectrum is sold in paired, 5 MHz blocks (10 MHz per pair).

Two conditions, or “components” must be met for the auction to close.

The first component involves meeting a benchmark price of $15.9 billion, derived by calculating the number of people served by 70 MHz of unimpaired spectrum covering the top 40 partial economic areas—wireless geographic units—at $1.25 per MHz/pop. The benchmark was reached in both the first and second stage of the incentive auction.

The second component requires purchase bids to cover the sale price of the spectrum plus the cost of auction itself and another $1.75 billion to relocate broadcasters. It has not been met.

Buyers and sellers were $63.5 billion apart when the first stage concluded Aug. 30 at a 126 MHz clearing target, with broadcasters asking $86 billion and wireless bidders offering $22.5 billion for the 100 MHz of usable spectrum at that clearing target.

Buyers and sellers were $35 billion apart when the second stage concluded Oct. 19 following a single round of bidding in the forward auction. Broadcasters asked $56.5 billion for the second-stage clearing target of 114 MHz. Wireless providers offered $21.5 billion for the resulting 90 MHz of spectrum.

The third and current stage commenced Nov. 1 with broadcasters participating in a reverse auction now set to conclude Thursday.

See more coverage at TV Technology’sspectrum auction silo.

WASHINGTON—Four days after stage two of the reverse auction closes, the FCC has announced that it will launch the second stage of the forward auction portion of the broadcast spectrum incentive auction. There is no confirmed date for this to happen as of yet, but some expect stage two of the reverse auction to complete mid next week, perhaps sooner; the reverse auction is currently in round 35. The FCC has reminded bidders to pay attention to its public reporting system for important auction announcements.

For the complete story, visit TVT's sister publication B&C.

WASHINGTON—The Federal Communications Commission has proposed a phased-in repack following the TV spectrum incentive auction. The transition will involve a market-by-market approach, concentrating on moving stations within individual designated market area in no more than two moves.

The post-auction transition will involve moving many TV station signals to new channels. The Transition Scheduling Plan Public Notice(TSPPN) is the staff's proposal for an orderly transition, it said. FCC officials emphasized that the TSPPN comprises a proposal and implored stakeholders to file comments. Those comments are due Oct. 31, (on MB Docket No. 16-306/GN Docket No. 12-268). Replies are due Nov. 17. The commission also said it would host a webinar on the TSPPN Oct. 13. (Editor’s Note: The commission has changed the date of the webinar to Monday, Oct. 17, from 1 to 4 p.m. Eastern to avoid conflicting with the IEEE Broadcast Technology Society’s Annual Broadcast Symposium is being held from Oct. 12 - 14. The webinar will be streamed live with open captioning over the Internet from the FCC’s web page atwww.fcc.gov/live. The webinar slides will be posted on the broadcast incentive auction website’s resources page prior to the start of the webinar. )

The TSPPN makes no mention of ATSC 3.0, the over-the-air transmission standard being compiled by the Advanced Television Systems Committee, and targeted for an early 2017 completion. Commission officials reiterated their intention of considering auction activities independently of the approval process for allowing broadcasting to adopt ATSC 3.0, an IP-based platform that would enable broadband-like connectivity.

The TSPPN outlines a 10-phase transition and announces that TV stations will receive confidential letters with their final channel assignments shortly after the final stage rule is satisfied so they can finalize equipment orders. Vendors will likely need a quick turn-around on this information to commence fabrication of transmitters and antennas, for example. The tool developed by the commission to determine when to move stations is said to anticipate vendor schedules.

This Phase Scheduling Tool, is said to take into account current manufacturer inventories, ordering, manufacturing and delivery times, as well as the time required for planning and zoning, legal work and pre-construction tower alterations, and coordination with other stations within a Designated Market Area. This Phase Scheduling Tool is described in the TSPPN at some length.

The question of 3.0 equipment remains unknown for the time being, but an FCC official did say that the Widelity Report, first published in 2014, would be updated to reflect 2016 prices very soon.

The proposal assigns each station into one of 10 transition phases with staggered completion dates to ease coordination issues and enable the commission to track progress. The dates all fall within the previously established 39-month deadline for all stations assigned to new channels to move from their current channels. But as the graphic below indicates, not all stations will have 39 months to make the switch. The earliest would have a little over a year to vacate their current channel in what the commission describes as the hypothetical schedule illustrated in the graphic below. 

The phased approach is intended to protect broadcasters from undue interference throughout the transition. The proposal attempts to move stations residing in the new wireless band as early as possible to ensure forward auction winners have timely access to spectrum. The proposal intends to minimize impact on consumers by limiting the number of times over-the-air viewers will have to rescan for channels.

Those stations that must move to a new channel will have to modify their existing facilities — antennas, transmission lines—to transmit on a different frequency. Then they must test their equipment. Unless a station’s new channel is available, that is, free from interference caused by other stations, it will need to coordinate carefully with one or more other stations to prevent the testing from causing interference. 

With hundreds of stations nationwide needing to move to new channels, there is the potential for a traffic jam in which a station can’t move to its new channel until a second station moves, and that station in turn must wait for a third station to move, and so on. Stations whose moves are dependent on another’s move are called “linked stations,” and these links can span dozens of stations across a large geographic area. Linked stations can switch to their new channels simultaneously to break up these congestion points, but doing so requires careful coordination.


In order to facilitate an orderly and timely transition, the staff proposes using a mathematical tool – the Phase Assignment Tool – that determines the order in which stations must transition to new channels. With hundreds of stations needing to move to new channels, there are millions of possible sequences, the commission said.

The TSPPN proposes a procedure for determining the optimal sequence by assigning stations to phases, by the end of which all stations within the phase must be off their pre-auction channels. The optimal sequence will meet a set of conditions, including:

Clear 600 MHz Wireless Band As Soon As Possible: Assigning U.S. stations whose pre-auction channels are in the 600 MHz Band to earlier phases would help open it up to licensees to offer new innovative services.

Limit TV Viewer Rescans/Preserve Regional Focus: Limiting stations in the same Designated Market Area to two phases also limits to two the number of times viewers would need to rescan for over-the-air channels. It also reflects the regional approach that stakeholders have suggested.

Give “Complicated” Stations More Time: Assigning the most challenging and time-consuming stations (as defined in the Widelity Report) to later phases allows adequate time for their transitions.

Limit Linked Station Sets in a Phase: Limiting linked sets within a phase would limit the effect of dependencies and facilitate coordination among broadcasters.

Limit the Total Number of Phases to 10: Using 10 phases strikes a balance between limiting the size of linked-station sets and other goals. A greater number of phases could decrease the number of linked-station sets in each phase but makes more difficult other goals such as transitioning stations within the same DMA at the same time and avoiding the need for multiple channel rescans by viewers. Keeping the number of stations in each phase roughly equal also helps in the sharing of resources in each phase.

No More than 2 Percent Temporary Interference: Allowing temporary limited increases in interference between two stations is in accord with past transitions and would significantly reduce the number and complexity of dependencies.

No Temporary Channels: Using a temporary channel during the transition could reduce the size of linked-station sets but would also add costs, strain resources, and add more rescans for viewers. 

Once stations are assigned to phases, the commission will determine whenthose stations switch to their new channels with the Phase Scheduling Tool.
Specifically, the tool:
- Assigns minimum completion times for each station based on certain characteristics.
- Allows the FCC to assess the impact of unknowns such as the order in which stations receive required resources.
- Gives the FCC the ability to gauge the impact of resource availability and adjust accordingly.

The TSPPN proposal details the specific tasks or processes proposed to be modeled for each of the stages of the transition process, as well as the estimated time and resource availability for each task. 

Putting stations into different phases with a detailed schedule will let stations, tower crews, and equipment manufacturers know when the FCC expects specific stations to complete their transition and so that they can plan accordingly, the commission said. It also intends ensures that the majority of stations will be able to test on their post-auction channel during a specified testing period without having to coordinate with neighboring stations—or those stations’ neighbors.

Also see our Spectrum Auction silo for more coverage.

WASHINGTON—As the incentive auction is now into the second week of its reverse portion, the number of rounds per day could be bumped up to three as bidders become more comfortable with the process. After stage two began on Sept. 13 with a single four-hour round, the auction has held two two-hour rounds per day. However, an increase in rounds will require more diligence for stations to monitor bids and other action.

To read the full story, visit TVT’s sister publication B&C.

WASHINGTON—The first week of the TV spectrum incentive forward auction concluded with bids totaling 12 percent of the $88.4 billion closing goal. The bell on round seven of the auction rang Friday afternoon at 4 p.m. ET with $11 billion ($10.96 billion) in net proceeds. Total proceeds were $11.257 billion, yielding a net of nearly $11 billion minus around $567 million in discounts for small business and rural wireless providers.

The forward auction got underway on Tuesday of this week, with bids reflecting opening prices finalized by the Federal Communications Commission in June, and totaling $8.49 billion after the first round. Asking prices increase 5 percent between rounds for spectrum in demand, or roughly half of the spectrum blocks for sale, according to early indicators parsed by Wells Fargo analysts, who noted that demand was focused on 2,047 of 4,048 available spectrum blocks in the second round of the auction. 

Total proceeds without discounts for each completed round and the percentage increase in between is illustrated in the table below:
Round 1: $8.49 billion
6 percent
Round 2: $9.04 billion 
7 percent
Round 3: $9.7 billion 
4 percent
Round 4: $10.1 billion 
5 percent
Round 5: $10.6 billion 
4 percent
Round 6: $11 billion
X percent
Round 7: $11.5 billion (As of Friday, Aug. 19)
Should the rate of increase between bidding rounds remain at roughly five percent, total proceeds will just exceed $20 billion by the close of round 21 next Friday. However, this rate of increase is entirely dependent on continued demand, thus not assured. The FCC must raise $88.4 billion to cover the $86.4 billion layout generated by the reverse auction in which broadcasters conditionally sold 126 MHz of TV spectrum, plus relocation and administration costs. The auction will continue again Monday with round eight starting at 10 a.m. Eastern.

For more, see ourSpectrum Auction silo.
Also see....

Aug. 18. 2016
“Auction Net Inches Over $10 Billion”
Net proceeds after round five of the TV spectrum incentive forward auction reach just over $10 billion on Thursday afternoon, the third day of bidding.

Aug. 17, 2016
“Auction Round 3 Yields $9.2 Billion”
The commission must raise around $88 billion from 100 MHz of paired spectrum, or an estimated $2.76 per MHz/pop.

WASHINGTON—Net proceeds after round five of the TV spectrum incentive forward auction reach just over $10 billion on Thursday afternoon, the third day of bidding. The results were posted at the Federal Communications Commission auction portal after 4 p.m. ET, when the round closed. The net proceeds came in at $10.05 billion, reflecting discounts totaling $537.6 million from total proceeds of $10.6 billion. Rural wireless providers and small business receive a discount off their bids. Nineteen of the 62 bidders in the forward auction qualified for discounts.

The bidding started on Tuesday at the opening prices finalized by the commission in June, with the opening round yielding $8.49 billion in bids. Bidders are vying for blocks of TV spectrum provisionally relinquished by broadcasters in the earlier reverse auction for a total of $86.4 billion. If the forward auction does not raise $84.6 billion, plus $1.75 billion to fund broadcaster relocation and a lesser sum to pay for the auction, the process will begin again with another reverse auction seeking less spectrum. Of the 126 MHz proffered through the reverse auction, 100 MHz is on the forward auction block, with 26 MHz going to buffer zones, wireless mics and unlicensed uses. The bidding is expected to go for several more rounds before the auction either closes or starts at a lower clearing target.

The commission planned for various scenarios going into the auction with regard to how much spectrum it could clear. This clearing target is calculated by optimization software that determines how many TV stations can be repacked into a reduced amount of spectrum without exceeding an interference threshold. Bidding will recommence Friday morning.

For more, see ourSpectrum Auction silo.
Also see....
Aug. 17, 2016
“Auction Round 3 Yields $9.2 Billion”
The commission must raise around $88 billion from 100 MHz of paired spectrum, or an estimated $2.76 per MHz/pop.

WASHINGTON—Broadcasters sold 126 MHz for $86.4 billion in the reverse portion of the TV spectrum incentive auction. On Friday, the Federal Communications Commission revealed that 62 bidders would vie for 100 MHz of that spectrum; (the 126 MHz clearing target minus 26 MHz set aside for buffer zones). Of those 62 bidders, 19 will be able to bid at discounted prices.

The auction will not be able to close if bidders do not cover the $86.4 billion sale price, plus another $1.75 billion to move broadcasters and $207 million to cover the FCC’s cost. If it fails to close, the whole process will have to begin again in a reverse auction with a lower clearing target. Here are some thoughts from Dan Hays, principal with PwC’s Strategy&, on the process.

TV Technology:What if the reverse and forward auction price points do not initially come together?
Hays: A gap between the reverse auction commitment… and the forward auction commitment to be seen in the coming months would likely see the auction extended by as much as four to six months. For broadcasters, this would mean a delay in seeing auction proceeds until at least the middle of 2017, with both a reduction in proceeds to some and others being eliminated from the auction altogether.

TV Technology:What is the potential impact of this?
Hays: For broadcasters who were not prepared to relinquish their spectrum immediately upon the auction close anyway, this will have little impact. For others who are anxious to cash in and go off the air or begin sharing channels with fellow licensees, the addition of a second stage presents a modest delay to their expectations. The net impacts to tax liabilities could be minimal.

The same delay in the availability of this new spectrum for mobile operators may have somewhat less consequence, but could force them to find alternative ways to fulfill growing demand for mobile data, as well as their planned deployment of 5G networks. The delay could accelerate the use of less attractive and efficient spectrum bands, and it may accelerate the use of alternative network technologies such as small cells.

TV Technology:Why have these not been more widely deployed already? Do small cell networks cost more in terms of infrastructure or otherwise than building out low-band spectrum?
Hays: Mobile network operators have already begun deploying small cells, but have been hindered by slow-to-change environments for zoning, permitting, and leasing. The operators themselves are also still experimenting with new operating models for these less-costly, lower-capacity cell sites, in the hope of finding a formula that balances cost with performance. Access to low-band spectrum promised to stave off some of the need for small cells, but this could accelerate if significant delays are encountered.

TV Technology:At the $88 billion price point where this first reverse auction ended and that the forward auction would have to cover—$2.75 per MHz/pop, according to Wells Fargo’s Marci Ryvicker—would alternatives such as small cell networks and accelerating the use of less attractive and efficient spectrum bands be a less expensive option?
Hays: The calculus of mobile network capacity and coverage is extremely complicated and difficult to paint with a broad brush, but given the high total clearing cost from the first stage of the reverse auction, it’s likely that the spectrum costs in some markets would be much greater than the other options available to mobile network operators, including small cells.

TV Technology:Is 100 MHz of low-band spectrum that will be available for auction worth $86 billion to the wireless industry, and specifically, the forward auction bidders?
Hays: With mobile phones now above 100 percent penetration in the United States, mobile operators are increasingly under pressure to watch every penny of capital expense. Given this, an outlay of $86 billion seems highly unlikely at this time. To put it in perspective, this is two to three times the typical annual capital spending of the industry. That’s an awful lot to bite off in one big chunk.

Also see...
“FCC: 62 Applicants Qualified to Bid for TV Spectrum.”
Many of the smaller entities will receive bidding credits, which amount to a discount on spectrum. Of the total 62 applicants, 19, or 30 percent, received a bidding credit related to rural service or a small-business revenue threshold.

For comprehensive coverage, see ourSpectrum Auction silo.

WASHINGTON—The first reverse stage of the TV spectrum incentive auction has concluded, with a clearing cost of $86,422,558,704. That’s according to the Federal Communications Commission’s Incentive Auction Dashboard. It will now be left to the wireless industry bidders to cover that amount, plus $1.75 billion to cover the broadcaster relocation fund as well as the administrative costs of holding the auction. Those bidders will participate in the forward auction, which likely will start toward the end of July, according a calculation made by B&C’s John Eggerton.

Wells Fargo Senior Analyst Marci Ryvicker noted that the $86 billion exceeded her firm’s expectations.

“This is way, way, way above what we had been expecting ($35 billion) and also way, way, way above what consultants had been saying ($50 billion to $60 billion),” she wrote in an email following the conclusion of the reverse auction. “What does this mean? Our quick take is that the broadcasters showed discipline—investors were fearful that this would be a race to the bottom and it clearly was not; rather, this was an orderly auction that came out with prices much higher than expected.”

The result creates a higher bar for the forward auction. If sufficient revenues are not raised in the forward auction, the entire process would have to start again with another reverse auction.

“This creates a challenge for the forward auction as we have struggled to see more than $30 billion being spent by the wireless companies. This clearly means, to us, that the entire incentive auction will run through multiple stages and could go into 2017 unless the FCC will pursue a quick forward process; i.e. allowing multiple—and when I say multiple, I mean multiple—rounds per day.”

Ryvicker said the $86 billion came out to $2.18 per MHz/pop, a measure the size of the population covered by the spectrum sold. On the buying side, it would have to reach $2.75 per MHz/pop to cover the $86 billion, the relocation fund and the auction admin costs. This also is due to only 100 MHz of the 126 MHz cleared being sold at the forward auction, because 26 MHz is being set aside for buffer zones.

“...We do not think these prices will hold as we go through subsequent rounds,” she said. “Let us reiterate this point one more time—we would not read into these prices for either the broadcasters or Dish; it will be the forward side of the auction that begins to tell us both what the broadcasters may receive, and the implied price of this 600MHz spectrum.”

The National Association of Broadcasters Executive Vice President of Communications Dennis Wharton released the following statement regarding the conclusion of the first reverse auction:

“Broadcasters have done our part; now it’s up to the wireless industry to demonstrate the demand is there for low-band TV spectrum.”

WASHINGTON—The next step in the broadcast incentive auction looks to be about four weeks away, according to the FCC’s public notice on the forward auction. The reverse portion of the incentive auction looks like it will end on June29, but per the public notice regarding the forward auction, it will begin “on the second business day after the close of bidding in the reverse auction, but no sooner than 15 business days after the release of the Qualified Bidders PN [public notice].” That would put the earliest that the forward auction could begin at July 26.

TV Technology sister publication B&C has the full story.

WASHINGTON—Upfront payments from parties intending to bid for relinquished 600 MHz TV spectrum are due July 1, the Federal Communications Commission announced Wednesday. The commission released its upfront payments Public Notice, along with a modification of the schedule for the reverse auction, which started May 31 with a six-hour bidding round, followed the next day by a four-hour session, and thereafter through this week, a series of two-hour rounds, twice daily. As of Monday, June 13, the schedule will comprise three, one-hour bidding rounds per business day. According to John Eggerton of Broadcasting & Cable, this schedule means the reverse auction will conclude the last week in June. (See, “FCC’s Spectrum Auction Moves to Three Rounds.”)

Beginning with Wednesday morning’s round of the currently running reverse auction, the dollar amount that reverse auction bidders can enter as a proxy floor price cannot be less than 50 percent of the price offered for a station’s currently held option. The floor was previously set at no less than 75 percent of the price offered for a station’s currently held option to prevent participants from accidentally setting their price lower then they intended.

On the forward auction side, all qualified applicants vying to buy TV spectrum sold in the reverse auction will be required to make their upfront payment by 5 p.m. ET on July 1. The payment must be made by wire transfer into the FCC account at the Federal Reserve Bank of New York.

“Upfront payments help deter frivolous or insincere bidding, and provide the commission with a source of funds in the event that the bidder incurs liability during the auction,” the PN states.

The commission urged forward auction bidders to pay close mind to the upfront payment instructions, “because they differ in several respects from instructions provided in past auctions.”This PN will be sent by overnight delivery to the contact person listed on each forward auction applicant’s FCC Form 175. The PN noted that of 104 forward auction applicants, 99 qualified. Those 99 will have to make upfront payments to participate. The upfront payments will be treated as refundable deposits.

The amount will determine how much spectrum—in terms of bidding units—each participant is eligible to bid for. A certain number of bidding units comprise each of the Partial Economic Areas that wireless providers use to define U.S. market boundaries. For example, New York, the No. 1 television market, is also the top PEA, comprising 27,000 bidding units. (Bidding units for each PEA is laid out in Appendix F of today’s Public Notice.) Upfront payments should be calculated by multiplying the number of bidding units targeted by $2,500. Applicants previously considered defaulters will have to multiply that number again by 1.5.

These upfront payments will not be assigned to any particular bidding units, but will apply to the total across all areas forward auction applicants selected on Form 175. Applicants previously considered defaulters will have to multiply that number again by 1.5. The commission said it would release an upfront bidding calculator shortly after the release of the Public Notice.

WASHINGTON—The Federal Communications Commission has released the “Incentive Auction Reverse Auction Bidding System User Guide.” The 67-page document details the process for using its auction software platform, which spit out a clearing target of 126 MHz last week based on how many TV stations will go on the auction block. (See, “FCC Releases 126 MHz Clearing Target.” April 29, 2016.)

According to the Guide, qualifying participants will learn which of their elected relinquishment options the system accepted on May 23, when the auction system opens for preview. One or more of three relinquishment options were selected during the application process, and included going off the air (to go dark or share another channel); moving from a UHF channel to a high VHF, or moving from a high VHF to a lower one.

Participating stations will be presumed sold at the opening price offered at the accepted option when actual bidding begins May 31.

Participants also will be informed of their bidding status during the May 23-24 preview. The auction system will assign each station one of six bidding statuses after each auction round:
— “Bidding” will indicate a channel in the TV band is available for that station.
— “Frozen—provisionally winning” means a station cannot be repacked in the TV band.
— “Frozen—currently infeasible” means a VHF channel may open up in subsequent rounds.
— “Frozen—pending catch-up,” is a “frozen—provisionally winning” station that is no longer provisionally winning.
— “Exited voluntary” for stations that drop out.
— “Unneeded” for those licenses the commission does not need to secure its 126 MHz spectrum clear target.

The reverse auction clock phase will proceed in a series of timed bidding rounds. “In each round, stations with the status of “bidding” will be offered prices for their available relinquishment options,” the Guide states. “Each bidder may choose to bid to accept one of these options (and, if appropriate, a fallback option) or, alternatively, may choose to drop out of bidding.”

After a bidding round closes, the auction system processes the bids and posts the results. Participants will then be able to view their own bidding status, which may change from one round to the next. Round results also will indicate which options remain available at what price to participants, as well as the “vacancy range” of channels remaining available for those options.

The Guide provides a step-by-step walk-through of using the online auction system, including login and navigation information relevant to the mock auction to be held before the real deal on May 31.

The commission’s countdown to this first-ever historic, two-part incentive spectrum auction includes the following (all times Eastern):

— Wednesday, May 18: An online tutorial will be held.
— Monday, May 23, 10 a.m.: Auction platform will be opened for preview through 6 p.m. Tuesday, May 24.
— Wednesday, May 25, 10 a.m.: Mock auction will commence and continue through 6 p.m. Thursday, May 26, at several intervals over those two days.
— Tuesday, May 31, 10 a.m.: The reverse auction commences.

The “Incentive Auction Reverse Auction Bidding System User Guide” was mailed to qualified participants May 5 and can be downloaded here.

WASHINGTON—The Federal Communications Commission today released its clearing target for the TV spectrum incentive auction. The commission will seek 126 MHz of spectrum in the first round, which will begin with bidding in the reverse auction, now set to begin Tuesday, May 31.

“By this Public Notice, the Incentive Auction Task Force and the Wireless Telecommunications Bureau announce the 126 MHz initial spectrum clearing target that has been set by the Auction System’s initial clearing target determination procedure, and the associated band plan for the initial stage of the incentive auction, as well as the number of Category 1 and Category 2 generic license blocks in each Partial Economic Area that will be offered in the initial stage during the forward auction,” stated the notice, released by the commission Friday morning.

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The commission also is sending out Final Confidential Status Letters to broadcasters informing them of their position going into the auction under one of four classifications: 1) The station is qualified to participate; 2) station is not qualified because no initial commitment was made; 3) the station is not qualified because its initial commitment could not be met, and; 4) the station is not qualified because the auction software determined it was not needed to reach the 126 MHz clearing target.

The band plan associated with the 126 MHz clearing target has 10 paired blocks of 10 MHz each—for a total of 100 MHz, to be offered in the forward auction to wireless bidders. According to an FCC official, 99 percent of that spectrum will be unimpaired by interference between wireless providers and broadcasters such that signals are not receivable in up to 15 percent of that Partial Economic Area—the geographic division used for assigning spectrum use to wireless providers. There are 416 PEAs in the United States.

Impairment was divided into two categories. Category 1, with zero to 15 percent PEA impairment, and Category 2, with 15 to 50 percent impairment. At 126 MHz, 4,160 total blocks of 10 MHz each will be made available in the forward auction (10 blocks times 416 total PEAs.) The commission will offer 4,048 of these individual blocks in the auction; 4,030 will be Category 1, with 15 percent or less impairment. In addition, 3,999 are unimpaired, “because we do not have to assign TV [stations] to the wireless band in that PEA,” an FCC official said.

An appendix to today’s Public Notice illustrates these numbers and indicates markets where impairment was highest. For example, San Diego, Calif.—defined as PEA018—had only four unimpaired blocks of spectrum out of the total 10. This is in large part a geographic constraint that affected about 12 PEAs along the U.S. border with Mexico.

“The availability of spectrum along the Southern border is limited by impairments that result from U.S. international obligations to protect Mexican television stations below Channel 37,” the Appendix states.“While Mexico has agreed to clear the 600 MHz band for mobile broadband use from Channel 51 down to Channel 37, the initial clearing target of 126 MHz would repurpose spectrum down to Channel 29. Thus, the obligation to protect Mexican stations that remain in Channels 29-36 will create impairments along the border in several blocks.”

FCC official did not say how many TV stations would end up in wireless spectrum or the duplex gap, nor how many low-power TV and translator stations were frozen out of the repack for lack of a channel in the repack. (Editor’s addendum: The FCC official said, “We have not done a systematic analysis of the impact on LPTVs and translators.”)

The commission has set a number of informational events and releases before the bidding in the reverse auction begins May 31. On May 5, the FCC will issue an “Incentive Auction Reverse Auction Bidding System User Guide” describing the features within the auction software platform that will be used in the reverse auction. It will be emailed to qualified broadcasters and posted on the FCC’s Incentive Auction site.

An online tutorial is scheduled for May 18, and the auction platform will be opened for preview at 10 am. Eastern on May 23 through 6 p.m. ET May 24. The preview will allow authorized bidders to “view the list of stations for which they may make bids in the clock phase, each station’s bidding status, the initial relinquishment option assigned to the station, and, where applicable, available bid options with associated vacancy ranges and next round clock price offers,” according to the Public Notice.

A mock auction will commence May 25 and close May 26 with the following schedule (all times Eastern):
May 25, 2016: Mock Bidding Round 1— 10 a.m. – 12 p.m.
Mock Bidding Round 2— 3 – 5 p.m.
May 26, 2016: Mock Bidding Round 3— 10 – 11 a.m. ET
Mock Bidding Round 4— 1 – 2 p.m.
Mock Bidding Round 5— 4 – 5 p.m.

The mock auction will allow qualified bidders to become familiar with the system and ask questions of auction and technical support staff. The auction platform “will provide each bidder with a number and variety of stations for the mock auction the mock auction similar to what the bidder will have during the actual clock phase of the reverse auction,” the PN states.

“The station(s) assigned to a bidder in the mock auction will be hypothetical... and the price offers that bidders see in the mock auction will not be the same as the actual price offers they see in the reverse auction itself. The mock auction will simulate the start of the auction, and each bidder will be allowed to submit bids for the stations shown. If a bidder does not make bids for a station, the station will be eliminated from further bidding in the mock auction.”

The mock auction will be conducted over the Internet with the option to bid by telephone.

Bidding in the clock phase of the reverse auction will commence May 31, 2016, at 10 a.m. through 4 p.m. ET. The next bidding round will be June 1, from 10 a.m. to 2 p.m. ET. Starting on June 2 and continuing until further notice, the schedule will be week days from 10 am. to noon, ET, and 3 to 5 p.m. ET.

“The Wireless Telecommunications Bureau may adjust the number and length of bidding rounds based upon its monitoring of the bidding and assessment of the reverse auction’s progress,” the PN states. “We will provide notice of any adjustments by announcement in the Auction System during the course of the auction.”

LAS VEGAS—In anticipation of the conclusion of the FCC’s Broadcast Incentive Auction and expected mandated television channel changes, Electronic Research, Inc. announced at the 2016 NAB Show an agreement with T-Mobile that will see the acceleration of antenna production by what ERI describes as 800 percent.

ERI has announced that installation crews will be immediately available after the FCC issues new channel assignments to broadcasters that are either relocated within the UHF television band or relocating from UHF to VHF channels. The company says that this will accelerate the process of clearing the 600 MHz frequency band within the FCC’s 39 month repacking timeline.

“ERI will have the capacity to manufacture television antennas, transmission line, and filter systems and to have trained and equipped installation crews at the beginning of the FCC’s 39 month clearing window,” said Tom Silliman, ERI president and CEO.

In order to meet these goals, ERI has announced that it will hire and train manufacturing, test and installation personnel, and expand its manufacturing and test facilities.

WASHINGTON—Broadcasters approved to participate in the TV spectrum incentive auction will not be able to pull out of the starting round after today. March 29, 2016, is the official start date of the two-part auction—a reverse auction with descending prices for broadcasters; a forward, more traditionally structured auction for the 100 or so wireless providers lined up to buy spectrum, including Verizon, AT&T and T-Mobile.

To participate in the auction, accepted applicants will have to commit to a relinquishment option at the opening price for that option by 6 p.m. ET March 29. The three relinquishment options include going off the air, voluntarily moving from a UHF to a VHF channel assignment, or moving from a high VHF to a low VHF. Each option incorporates a percentage of the opening price: full price for going off the air; 40 percent for going high VHF and 75 percent for going low VHF. 

Reverse auction opening prices are based on a maximum value of $900 million divided into 1 million units of interference-population volume. For example, the opening bid price for WCBS-TV in New York to fully relinquish its spectrum is $888,687,700. Moving from a U to a V opens WCBS at $666,515,250, and from a high V to a low V, $355,747,800.

There is no guarantee of receiving those top bids, and broadcasters can drop out of the auction if their price expectation is not met. The Federal Communications Commission’s auction system will determine a spectrum-clearing target between 42 and 144 MHz based on how many and which stations participate. This also will determine which participating stations are most needed for a given clearing target, and therefore most likely to receive a higher opening bid.

Only full-power TV and Class A licensees may participate. Non Class A low-power TV licensees are not authorized to participate, but may enter into a channel-sharing arrangement with another broadcaster in the post-auction repack.

Broadcaster participation in the auction is anonymous by statute. Applicants are under a quiet period until the auction closes, so there is no public data available on how many TV stations may be sold or moved in the post-auction repack. This information will become available only after the auction closes, tentatively sometime in the third quarter of this year.

The clearing target is expected to be announced within three to four weeks, along with the starting time of the reverse auction clock phase, when actual bidding begins in the live auction system.

WASHINGTON—The post-auction TV station relocation reimbursement process is taking shape. The reimbursement form has received the federal seal of approval from the Office of Management and Budget. Broadcasters who wish to tap into the $1.75 billion relocation fund set aside by Congress from expected incentive auction revenues will need to use an interactive online version of FCC Form 2100, Schedule 399, (the “paper” representation of the form sent to the OMB for approval, which was announced via publication in the Federal Register March 24.)

The debut date of the live, interactive form has not yet been announced. The auction is set to commence Tuesday, March 29.

The OMB OK’d both the form and directions, which state that Form 2100 can be used by TV stations and cable operators for advance estimates, for actual costs and for the final accounting.

PRE-AUCTION EXPENSES
The Federal Communications Commission has not yet determined if pre-auction planning expenses will be reimbursable, but a decision is expected any time. Pre-auction planning expenses may comprise tower mapping or other engineering consultation work.

Even if pre-auction planning expenses are deemed reimbursable, they will not be paid until after the auction closes. If the auction does not raise enough money at any clearing target to cover administrative expenses and the relocation reimbursement fund, as well as reaching a spectrum-price threshold, it will not close and broadcasters could be on the hook for pre-auction expenses. The FCC has set a graduated range of clearing targets from 126 MHz down to 42 MHz. If the initial clearing target is 126 and that auction stage fails to close, then the commission will drop to a lower target and resume the auction.

Assuming the auction does close, the statute requires reimbursement within three years of that time.

The rules of eligibility and reimbursement are included in the FCC’s May 2014 Report and Order, “Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions,” and in the Code of Federal Regulations.

ELIGIBILITY
Only full-power and Class A TV licensees are eligible, as well as cable TV plant modifications made “in order to continue to carry the signal of a broadcast television licensee” reassigned to a new channel in the repack: 

(1) Full-power or Class A TV stations involuntarily reassigned in the repacking process;
(2) Channel-sharer stations involuntarily reassigned in the repacking process;
(3) Broadcast TV licensees that voluntarily move from a UHF to a VHF channel;
(4) Broadcast TV licensees that voluntarily move from a high VHF to a low VHF; and
(5) Broadcast TV licensees that voluntarily relinquish spectrum usage rights to share a channel with another licensee.

Only the host TV station in a channel-sharing arrangement is eligible for repacking reimbursement, and only if the shared facility receives a new channel assignment. “Sharees” are those stations relinquishing spectrum in the auction and will not be reimbursed for moving to a shared facility. Moving expenses for broadcast auxiliary service operations are not eligible for reimbursement. Wireless mic users and non-Class A low-power TV licensees are ineligible as well.

ALLOCATION
Broadcasters and cable operators who submit estimates will receive an initial allocation of up to 80 percent of estimated costs. A cost catalog of equipment and services—based on the December 2013 Widelity Report—will be embedded in the online version of Form 2100. Given the date of the report, the commission intends to seek comment on how to adjust those prices accordingly.

If an item is not in the cost catalog or a price differential occurs in estimating expenses, a broadcaster may submit “supporting evidence and certify that the estimate is made in good faith.”

Broadcasters who receive an initial allocation will be able to draw against it as they incur moving expenses. These must then be submitted as “actual costs” with receipts, invoices and other documentation by a date to be determined by the FCC’s Media Bureau. Final accountings will take place thereafter. Should the $1.75 billion not cover 100 percent of aggregate repacking expenses, it will be distributed proportionally.

‘REASONABLY INCURRED’
The Spectrum Act states that relocation costs must be “reasonably incurred” to qualify for reimbursement. The commission interpreted “reasonably incurred” in the 2014 R&O as follows:

“We interpret the Spectrum Act’s mandate to reimburse ‘costs reasonably incurred’ to require that we reimburse costs that are reasonable to provide facilities comparable to those that a broadcaster or [multichannel video provider] had prior to the auction that are reasonably replaced or modified following the auction, as a result of the repacking process, in order to allow the broadcaster to operate on a new channel or to allow the MVPD to carry the signal of a broadcaster on a new channel.”

The commission also said it expects that stations will not always be able to replace older, legacy equipment with “comparable” equipment when, for example, manufacturers no longer support older models, and because of advances in technology. The commission said it would recognize that some reimbursable technology may include “improved functionality,” but that it does intend to reimburse applicants for new, optional features in equipment, “unless the station or MVPD documents that the feature is already present in the equipment that is being replaced.”

Finally, the commission said that stations and MVPDs can upgrade on their own dime, and it will reimburse for the cost minus the upgrade. 

WASHINGTON—At T-minus 11 days before the official start of the TV spectrum incentive auction: low power wins one, the forward-auction bidder list is out and bidding tokens have been sent to qualifying broadcasters applying to participate in the reverse auction.

LPTV LEGAL MANEUVERS
The fun started on St. Patrick’s Day when a federal court ruled in favor of Latina Broadcasting of Daytona Beach, Fla. Latina, owner of the low-power TV station WDYB. Latina’s been at odds with the Federal Communications Commission for nearly two years over being let into the auction. Without auction status, WDYB isn’t guaranteed a channel in the post-auction repack.

WDYB, an Azteca America affiliate, also is one of only four TV stations in the United States owned by a Hispanic woman—an example of the type of diversity the commission is supposed to promote with its media ownership regulations.

The FCC initially excluded WDYB from the auction in 2014, reinstated it in June of 2015 after Latina appealed, then booted it from the list again last month in a reconsideration involving other LPTVs trying to get into the auction. FCC Commissioner Ajit Pai wrote a takedown of the decision in his dissenting statement.

In it, he concluded, “It is impossible to reconcile the commission’s ostensible support for promoting diversity with such shabby treatment of one the few television stations in this nation owned by a Hispanic woman.”

The U.S. Court of Appeals for the D.C. Circuit stayed the ruling with respect to Latina, which can now provisionally participate in the auction while the court considers the merits of its appeal.

The issue of auction eligibility is tied to calculations for repacking the TV spectrum after the auction. The commission’s models are based on the list of eligible stations, including those with spectrum it does not need. Those stations are still eligible for a channel in the repack.

In markets where the commission expects to have enough spectrum for both wireless bidders and remaining TV stations, some that are eligible are considered “not needed.” In other words, the auction system has “determined that the station will always have a feasible channel assignment in its pre-auction band at all of the possible auction clearing targets,” according to the FCC’s Reverse Auction Opening Bid Prices Public Notice.

Most of those “not needed” are in smaller markets, such as Grand Junction, Colo., at No.185, and Juneau, Alaska, at No. 207. This is not exclusively the case, however, as even Los Angeles at No. 2 has a “not needed” station, and Phoenix at No. 12, has five.

The Orlando-Daytona Beach-Melbourne TV market in central Florida—the 19th largest in the nation—is one of those where all eligible stations have an opening bid. A total of 23 stations in the Orlando-Daytona Beach-Melbourne TV market in central Florida—the 19th largest in the nation—are on the FCC opening bid list. The high-end opening bids (for full relinquishment) range from $84 million to $344 million for WOPX, an ION full-power station.

Because of the complicated calculations of the repack, the FCC told the court letting Latina back in could delay the start of the auction. When court let Latina back in Thursday, the FCC said on Friday that it would commence March 29 as planned. That is, as long as the court didn’t grant a similar request from Videohouse, a low-power broadcaster in Pittsburgh petitioning the same federal court to be let into the auction.

“Granting Videohouse’s request for a stay or provisional participation will cause substantial delay and resulting harm to the public,” an FCC spokesman said on Friday, the day after the Latina ruling came out.

“Once again, the FCC is saying one thing and doing another,” Videohouse shot back in a letter to Mark J. Langer, Clerk of the U.S. Court of Appeals for D.C. (The court denied Videohouse’s request for a stay after this post was published.)

In the meantime, the court set a hearing schedule for Latina, according to John Eggerton at B&C.

BIDDER CHIPS DISPATCHED
While the legal drama unfolded on March 17, the FCC released a Public Notice indicating it was processing broadcaster applications to participate. The PN said eligible applicants would be receiving a Second Confidential Status Letter, and those deemed complete and with at least one selected station would be given a SecureID auction token that will allow them into the auction system, and directions for the next step in the process.

In order to participate in the auction, accepted applicants will have to commit to a relinquishment option at the opening price for that option between 10 a.m. March 28 and 6 p.m. ET March 29.

BUYER LIST RELEASED
The auction wheels continued to turn on Friday, when the commission released the forward auction applicant list—i.e., those in line to buy the relinquished TV spectrum. AT&T, as expected, is on it, as is Verizon, T-Mobile, although AT&T is on a list of 39 “incomplete” applicants out of a total of 104. Eggerton has details on the applicants.

SAN JOSE, CALIF.—The FCC incentive auction is a game-changing opportunity for broadcasters. Many broadcasters look at channel sharing as a way to cash in on the spectrum auction and still remain on-air. However, stations considering channel sharing need to be aware of the technology challenges and solutions. This article provides insight into how channel-sharing stations can optimize encoding efficiency and video quality utilizing the latest tools in compression including distributed statistical multiplex (statmux) architectures.

KEY TECHNOLOGY CHALLENGES
A channel sharing agreement (CSA) can be between two or more duopolies, station groups or independents, and effectively allows the participating stations to distribute their programming over a shared amount of bandwidth. This pooled use of available spectrum offers a number of benefits, but also carries with it several technical challenges. One of the main issues is encoding efficiency. Broadcasters need to pack as many MPEG-2 channels as possible into the available 19.39-Mbps ATSC transport stream while maintaining their desired level of video quality.

Bitrate allocation can also be challenging, which is where statmuxing plays a critical role. To ensure that the requirements of a CSA are met, the participating channels must agree on how to distribute the bit-rate and video quality. Utilizing a constant bit-rate stream in a multiplex is not a viable option, as it would limit bandwidth efficiency and impact overall video quality.

Furthermore, many broadcasters want to combine their channels from geographically dispersed encoding feeds. But how do you maintain an encoder at one station when the statmuxing and transmission is happening across town—or perhaps across the country? Passing SDI circuits between the channel-sharing stations is an expensive proposition, so the solution needs to be both cost-effective and efficient while guaranteeing quality.

ADVANCED VIDEO COMPRESSION AND ANALYTICS TECHNOLOGY
As new video compression standards have been created over the last several years, they’ve essentially doubled encoding efficiency. These developments actually trickle down, so that coding techniques developed for both MPEG-4 AVC and HEVC also benefit MPEG-2. Statmux technology works hand in hand with AVC and HEVC tools and techniques to support the higher channel density required of CSAs.

Utilizing statistical multiplexing, stations can balance video quality across all of the channels in a statmux pool, shifting the bit-rate between those channels with low complexity statistics to those with more in real time. The VQ runs at its highest average when all sources in the pool are of a different content type: sports, sitcoms, talk shows, etc. There needs to be at least two channels of differing content in each to gain noticeable benefit.

A distributed statmux solution goes even further, allowing channel-sharing stations to build a single statmux pool from up to 32 geographically dispersed encoders. This capability further increases bandwidth efficiency, flexibility and cost savings, while enabling broadcasters to maintain high video quality.

For monitoring and measuring bit-rate allocation in the pool, video analytics software plays a crucial role in assuring that quality benchmarks are reached. Look for a solution that integrates seamlessly with the encoder to offer monitoring dashboards, real-time video degradation alarms, channel/pool quality comparisons, trend analysis, and a variety of reporting tools. These capabilities will enable broadcasters to achieve the highest possible video quality for their allocation, and to gauge the ultimate success of their CSA.

CONCLUSION
As the world leader in video delivery infrastructure, Harmonic offers Emmy Award-winning video compression, statistical multiplexing and video analytics solutions, enabling broadcasters to make a seamless migration to channel sharing and provide amazing video quality across all channels.

METUCHEN, N.J.—When the upcoming TV spectrum incentive auction concludes later this year, the heavy lift begins. Several hundred TV station signals—as many as 1,200 according to one estimate—will have to be repacked into a reduced amount of spectrum. Think of running a giant electronic jigsaw puzzle through a compression codec to fit it into a smaller space. What’s more, consider that there will be no way to know which pieces will have to be fit into how much space, until after the auction.

By comparison, the repack following the 2009 digital transition involved a set amount of space and the knowledge of where nearly every puzzle piece would end up, much earlier in the process.

TV Technology has canvassed many experts over the last several months about how this next repack will be carried out, and what TV stations can do to anticipate it. We put the question to S. Merrill Weiss, a respected and well-known media engineer whose contributions were fundamental to the development and deployment of digital television. His credits include Fellow status with the Society of Motion Picture and Television Engineers, and winner of that group’s prestigious David Sarnoff Gold Medal Award, its highest technical recognition, the Progress Medal, the Engineering Achievement Award from the National Association of Broadcasters, and the Bernard J. Lechner Outstanding Contributor Award from the Advanced Television Systems Committee. 

Weiss provided a succinct and cogent breakdown of what TV stations and engineering personnel are up against with regard to the repack. Specifically, we ask what is necessary for stations to know and/or do immediately. Mr. Weiss responded as follows:

The answer is not simple. It all depends on the station’s position in the incentive auction and how the outcome of the auction affects the station’s situation.

There are a number of categories into which each station may fall. In addition, knowing what to do can be obscured from station personnel by upper-management decisions of which the station folks may be unaware. (I know first-hand of several cases of that sort.) The result can be that the stations cannot plan because they don’t know what possible fate awaits them. 

There can be good reasons for this, given the FCC’s proscription of communication to other participants of strategies and positions being taken in the auction.

To categorize at least some of the possible situations in which stations may find themselves, here are some that come to mind, on which I will elaborate below:
Stations that choose to go off the air;
Stations that choose to channel-share with one or more stations;
Stations that choose to move from one band to another (i.e., from UHF to High-VHF or to Low-VHF, from High-VHF to Low-VHF);
Finally, stations that are repacked whether they want to move or not.

Each of these categories brings a different set of considerations. Taking them one by one:

· Stations that choose to go off the air: It seems unlikely that station personnel will be told about such positions being taken in the auction, because such information could lead to a mass exodus for something that might never come to pass, depending on what happens in the auction.

Moreover, having station personnel on the street, seeking other employment, would serve to other stations as a signal of a station’s position in the auction, which communication is forbidden. Given this, I doubt such stations will be able to do anything in advance. Once the auction is over, the only things to be done will relate to preparing to shut down operations and to salvage whatever of a station’s facilities and equipment might have value post-auction. 

There will be 90 days after the auction, with the possibility of an extension of another 90 days, for the station to go off the air. Any salvage work can happen thereafter for as long as it takes. Of course, it also could be that a station will go off the air but maintain certain operations for distribution of its content by other means, for instance, by cable or by Internet delivery.

· Stations that choose to channel-share: This is one category in which stations can prepare, if their personnel know about the plan to share. (They very well may not know of such plans, for reasons similar to those already described.)

Even in cases in which station personnel know of sharing plans, it may not be possible to move forward beyond planning because actual implementation of such plans is likely to depend on one or more of the sharing parties being successful in the auction. So, implementation will depend on knowledge of such success.

Considering the planning that can be done before the auction is finished, it largely will focus on designing the facilities for a joint operation, selecting the protocols used to connect the stations together, deciding where to place certain equipment such as encoding pools, and so on. Some of this already has been done, in some cases, as a part of channel-sharing negotiations, but there may be other cases in which it is yet to be done.

Even when it has been done to a certain level for purposes of writing a contract, there still are likely to be details to be worked out, such as operating plans and the like.

· Stations that choose to move from one band to another: This is another category in which station personnel could prepare plans for post-auction facilities and operations—once again, if they know what position is being taken in the auction. 

Such plans could include preliminary technical designs and budgets. They would have to remain very preliminary because the real designs would depend quite heavily on what channels and coverage areas the stations are allotted by the FCC, which won’t be known until the auction is completed.

Then, there may be tradeoffs required to fit antennas and other equipment into the space available on towers or in transmitter rooms or shelters. Yet another possibility is that stations might be able to seek modification of the facilities that the FCC allots them, and that is likely to lead to design impacts, too.

· Stations that are repacked: Stations that choose not to participate in the auction may be orphaned in the middle of the new wireless broadband spectrum and have no changes to make. Others that either chose not to participate or that were not successful in the auction might be moved to a new spectrum location by the FCC.

In such cases, certain equipment that is channel-dependent is likely to have to be replaced, modified, or retuned, depending on its nature. Such changes are predictable and can be planned to some extent, although real planning will require knowledge of the actual channels to which the stations will move.

Again, there may be tradeoffs required due to space constraints of one sort or another (e.g., channel-dependent equipment can be larger at lower frequencies than at the higher frequencies from which the stations are likely to be moving).

Certainly, preliminary plans and budgets can be prepared, but they will have to be finalized post-auction, once the true outcome is known. Again, too, there may be opportunities for modifications of what the FCC allots to stations, which would be another cause for having to delay completion of planning and budgeting until after the auction and repack.

· Additional considerations: In respect to the last two cases, in which stations will remain on the air but move to new channels (including those that will channel-share on their new channels), it was mentioned that modifications of FCC-allotted facilities might be possible. This would be done to improve the service areas and signal strengths of the station facilities before they are built.

Planning for such potential opportunities could include lining up consultants to consider such possibilities as soon as the auction results are known. The chance exists that there will be a “land rush” after the auction, and, if there is, the stations that apply first are more likely to get what they might want than those that apply later. 

The extent to which this possibility will exist will depend on what the FCC will be willing to entertain post-auction. To some extent, that willingness will depend on what the commission already has decided, but they still are making decisions, leaving the potential for opening doors that may now seem closed.

Join Mr. Weiss on Tuesday, March 8 at 2:30 p.m. EST for “Drilling Down Into the Post-Auction Repack,” an exclusive Webinar produced by TV Technology and B&C, and also featuring theFCC’s Howard Symons; NAB’s Patrick McFadden and RF experts Jay Adrick and S. Merrill Weiss. Register here

Also see:
Feb. 26, 2016
“McAdams On: The Repack”
The post-incentive auction TV channel repack will make or break broadcasting. That’s not just my assessment, but the abridgment of many off-the-record conversations I’ve had over the last year with people who know a lot more than I do.

WASHINGTON—The incentive auction application window closes tomorrow. Broadcasters who wish to participate must file a Form 177 with the Federal Communications Commission by 6 p.m. Eastern time Tuesday. While it’s one of the major deadlines in the incentive auction process, Washington, D.C. media attorney Scott Flick said it won’t determine final participation.

“While signing up channel-sharing agreements by Jan. 12 is a big deal, the number of Form 177 filings may be unknown, since they are confidential,” he said in an email exchange with TV Technology. “However, they are also not particularly helpful as an indicator of the likelihood of a successful auction. They do not commit a station to the auction, and can be withdrawn prior to March 29.”

Consequently, he said the only thing that can be revealed involves stations that did not file a Form 177, that will not participate in the auction, but may be participating in a channel-sharing arrangement.

There is one particularly significant aspect to tomorrow’s deadline, according to Dennis Wharton of the National Association of Broadcasters.

“The Tuesday deadline triggers the ‘quiet period’ for broadcasters under the commission’s rules—meaning that certain communications are now prohibited. Broadcasters will not be permitted to convey bids or bidding strategies of any applicant to other broadcasters or to wireless carriers participating in the forward auction. This quiet period will run until the FCC announces the final auction results.”

Flick further noted that stations filing a Form 177 can select all three participatory options: Going off the air, moving from a UHF to a high VHF, or to a low VHF. Each option incorporates a percentage of the opening price: full price for going off the air; 40 percent for going high V and 75 percent for going low V.

The pricing formula for the opening bidsis based on a maximum value of $900 million divided into 1 million units of interference-population volume, or a “$900 base clock price.” The $900 million is the top figure among opening base prices, applied only to WNJU, the Telemundo affiliate located in Linden, N.J., serving the New York market, and transmitting on Ch. 36, which will be within any clearing target of more than 84 MHz.

The clearing target and the associated band plan will be determined after March 29, 2016, the deadline for Form 177 modifications.

As for opening bid prices, the numbers are binding for participating stations that get offered those amounts, but the FCC is not bound to offer them. Also, of 2,022 auction-eligible TV stations, the FCC has determined it will not need around 324, including KVME-TV in Los Angeles, five stations in Phoenix, the No. 12 market. None of the eligible stations in No. 40 Las Vegas are needed, and just two of 25 in market No. 48, Albuquerque-Santa Fe, N.M.

“With regard to opening bids, they are just that, and in nearly all markets the bids will drop from there until too few stations step up to relinquish their spectrum for the then-current bid,” Flick said. “In a few key markets like New York and Philadelphia, the bids may well freeze early, but in less spectrum-congested markets, the ultimate bid will likely be a lot lower than the opening bid. Until a station has its bid accepted by the FCC, it is free to walk away from the auction at any point.

“In addition,” he said, “even where the FCC accepts a station’s bid to sell its spectrum, that station will need to wait to make sure that the forward auction is sufficiently successful in raising money to cover the reverse auction bids before it can start planning how to spend its proceeds. If the forward auction comes up short, then the FCC will need to reduce its spectrum clearing target and start the reverse auction over again.”

The extent of probable station participation is unknown. Several station groups—including Sinclair, Nexstar and Media General—have confirmed their interest, but the total number of the nearly 1,700 stations offered an opening bid price by the FCC has not emerged, even speculatively.

Flick said much remains unknown.

“There are a lot of moving parts, and the FCC’s auction plans continue to evolve as each day passes,” he said. “As a result, broadcasters are planning for as many scenarios as they can, because no one knows with any great certainty how the auction process will ultimately unfold. To paraphrase Rilke, this will be a year full of things that have never been.”

WASHINGTON—The TV spectrum incentive auction application is now open. Federal Communications Commission officials held a workshop Tuesday morning to outline the steps necessary for participation.

“Once you leave here, you’re on the clock,” said Gary Epstein, chair of the FCC’s Incentive Auction Task Force.

Broadcasters who wish to participate must bear in mind two important deadlines, FCC staff said. The first—Jan. 12, 2016, 6 p.m. ET—is the deadline for filing Form 177, in the FCC’s electronic auction system.

The second—March 29, 2016, 6 p.m. ET—is when applicants must make an “initial commitment” to a relinquishment option—going dark or moving to a lower VHF channel assignment.

“Initial commitment” in this case means the station has agreed to accept the first bid in the reverse auction, said the FCC’s Erin Griffith. (Opening bid prices, which vary according to relinquish option, were published last month.)

“It’s an irrevocable offer by the applicant to reinquish the spectrum usage right at the opening price for that station,” she said.

Griffith reiterated that Form 177 must be filed by 6 p.m. on Jan. 12 for applicants to be able to particpate in the auction. The quiet period also starts for all applicants at 6 p.m. Jan. 12, 2016, and extends through the auction.

Once applications are filed, the commission will review them, determine if more information is required, then send out a first confidentialstatus letter to notify applicants of this determination.

A window of time will be provided for making corrections. The review process then will be repeated and a second status letter will go out. Those with properly completed applications will need to make their intitial commitment to one of three relinquishment options, again, by March 29, 2016, 6 p.m.

Once these application steps are completed, the commission will determine an initial spectrum clearing target and the associated band plan. Staff will then send a third letter to the qualified applicants notifying of them whether or not their station will be needed.

If not, the application will be rejected. A station also may be booted for not making an intitial relinquishment commitment, or if the one selected cannot be accommodated by the auction system. Such stations would be “subject to repacking in the pre-auction bands.” In other words, if they’re in UHF now, they’ll be first in line for UHFs in the repack.

Stations accepted for participation in the opening round of the reverse auction will proceed to a mock auction before actual bidding begins.

With regard to Form 177, it is entirely electronic, but pages may be printed out for review. (TV Technology has a .pdf of the screen shots submitted for approval to the Office of Management and Budget here.) Applicants can log in with their FCC Registration Number and password. The FRN automatically will bring up associated station license information.

Within the form, contact information must include physical address—no P.O. boxes—and a fax number, or in the absence of a fax number, a phone number. The contact information is particularly important, because commission staff will communicate only with the applicant’s designated contact.

The only way commission staff will speak with someone other than the designated contact is if that person notifies the commission of a change and authorizes a new representative by email at auction1001@fcc.gov.

There is no rule against more than one licensee using the same designated contact or authorized bidder, but applicants must be aware of what communications are specifically prohibited during the quiet period.

Applicants also will choose designated bidders. Up to three may be authorized, and the commission urged applicants to select more than one should something unexpected occur.

Form 177 includes a section on which stations will be put on the auction block. Stations associated with an applicant’s FRN automatically will come up on the form. Others can be added.

Full-power station licencees will need to indicate whether or not if the licenses is noncommercial, and if so, operated on a reserved channel. All applicants must disclose any impending changes in license statuses. Auction-eligible licensees of stations with pending validity orders will be able to participate in the auction subject to payment being held until the proceeding is resolved.

The next section of Form 177 covers relinquishment options. Applicants may select as many as are available to the station:
UHF licensees may go dark or move to a high or low VHF.
High VHFs can go dark or move to a low VHF.
Low VHFs can go dark (or share, which is the same as going dark in terms of auction valuation).

Stations must select all applicable options for those to remain available during the auction. I.e., a UHF that elects to go dark cannot elect instead to move to a VHF during the auction. At the same time, a UHF that selects all options will not be bound to any of those options in the absence of an acceptible bid.

These relinquishment options are hierarchical. Participants may decide at any point during the auction to select a different option, but they only can move in one direction—from doing dark, to high VHF and then, to low VHF.

“So if you’re a UHF and your initial commitment is full relinquishment of your UHF, you can in a future round change your bid option to a move to low-VHF if there’s a VHF channel available to you – but then you cannot later decide you want to go back to full relinquishment. That option will no longer be available to you,” an FCC official clarified.

The form includes a section on channel-sharing options, of which there are two—with a completed channel-sharing agreement, or the intent to execute one after the auction.

Channel-sharing stations with completed CSAs will be asked to input the name and facility IDs of all potential partners, including those on backup CSAs. This applies only to stations relinquishing spectrum in the auction, not to those making room for the sharing tenant.

The CSAs of stations that accept a bid and relinquish spectrum will be placed in the licensee’s Public Inspection File, with the FCC allowing parties to redact confidential and proprietary terms.

Station ownership must be disclosed on Form 177. In short, any individual or entity that directly or indirectly controls 10 percent of the station must be attributed. Broadcasters would be well-advised to carefully consult FCC ownership-attribution rules on Form 177.

The FCC’s Howard Symons said that depending on bidding activities and the number of auction stages necessary, the auction is expected to conclude in the third quarter of 2016.

Also see…
Dec. 7, 2015
Auction Application Window Opens
The application process will begin with filling out FCC Form 177, to be released at noon Eastern when the workshop opens.

WASHINGTON—The application window for selling spectrum in the 2016 TV spectrum incentive auction opens Tuesday, Dec. 8 at noon. The auction team at the Federal Communications Commission is kicking off the day with a three-hour workshop that overlaps the window by an hour—from 10 a.m. to 1 p.m. Eastern.

The application process will begin with filling out FCC Form 177, to be released at noon Eastern when the workshop opens. The screenshots of the form approved by the Office of Management and Budget and published in Federal Register Dec. 2 indicate applicants will need their FCC Registration Number and a password to enter. Applicants will be asked about ownership, legal business classification, address, responsible party information, names of authorized bidders, call sign, facility ID, commercial or noncommercial status and relinquishment options.

There are three such options: Going off the air; moving to a low VHF; moving to a high VHF. All three options can be selected at the time of application, but those not selected will not be available during the auction.

Channel-sharing will constitute going off the air for the station that opts to share 6 MHz with another broadcaster. A channel-sharing agreement must be in place and certified on Form 177 for approval.

The Reverse Auction Application Workshop will be streamed live with open captioning from www.fcc.gov/live. A recor’ded version will be available on demand afterward on the Auction 1001 Website. An online tutorial with 32 slides and narration is available now on demand.

Also see…
Dec. 2, 2015
FCC Auction Application Form 177 Becomes Official
The application form for selling a broadcast TV spectrum license has become official.

November 12, 2015
FCC Moves Auction Application Window, Revises Opening Bids
The window for broadcasters to apply to participate in the TV spectrum incentive auction has been pushed back due to some new numbers.

CURIOUS—I hope the bombshell report that landed in my lap Nov. 9 will be considered seriously. I hope it will not be dismissed in a hail of “stall tactic”-type allegations intended solely to delegitimize its merit, and more importantly, its implications for the broadcast television infrastructure in the United States.

The gist of the report is that there are not enough equipment suppliers to pull off a TV repack in 39 months, the prescribed timeframe under the current statute. There were more than twice as many transmitter manufacturers and nearly twice as many tower crews available for the 2009 digital transition, according to the report from Digital Tech Consulting in Dallas, and commissioned by the NAB. This is not a delay tactic, but a simple reality.

The plummeting demand following the ’09 transition in the midst of the Great Recession decimated the broadcast industry supply chain, particularly capital-intense, specialized, heavy-equipment manufacturers.

A total of 174 TV stations were relocated in the 2009 transition. Between 800 and 1,200 will have to be moved in the post-incentive auction repack, according to the supply-chain report—authored by veterans of the ’09 transition, including the former program director of the $2 billion converter-box fund. It further estimates that, given the supply-chain chokepoints, no more than 445 TV stations can be moved within the 39-month window.

Whether or not these numbers come to bear, the very important question this begs is: What happens to stations that can’t be moved within 39 months? Is this really a situation in which possibly hundreds of local TV stations will go off the air? And if so, are we all very sure that we are OK with that?

I, for one, am very uncomfortable with the lack of public discourse on what this transition potentially entails, and that there is no clear vision of what the nation’s communications infrastructure looks like on the other side.

WASHINGTON— The reverse auction application workshop originally scheduled for tomorrow has been moved to Dec. 8. The Federal Communications Commission made the announcement last Friday in a Public Notice that also noted a pre-auction process tutorial for the reverse auction would be made available this Friday, Nov. 20.

The announcement came a day after the commission said it was pushing back the reverse auction applications window, from Dec. 1 - 18, to Dec. 8, 2015 through Jan. 12, 2016. (See, “FCC Moves Auction Application Window, Revises Opening Bids.”) The commission reiterated that the reverse auction process technically will commence March 29, 2016, also the deadline for reverse auction applicants to commit to an initial bid option.

The Dec. 8 workshop will be held from 10 a.m. to 1 p.m. ET. Individuals who are pre-registered for the workshop do not need to re-register. Those who have not yet registered are encouraged to do so by submitting attendee names and company affiliations via email to auction1001-at-fcc-dot-gov in order to expedite the check-in process the day of the event. The FCC requests that individuals use “Reverse Auction Workshop” as the subject line in their emails. An agenda for the workshop will be released prior to the event. More contact information is available on the Public Notice.

WASHINGTON—The window for broadcasters to apply to participate in the TV spectrum incentive auction has been pushed back due to some new numbers. The Federal Communications Commission today released a Public Notice saying that it revised opening bid prices, and would therefore move the application window to Dec. 8, 2015, through Jan. 12, 2016. The window was originally set for Dec. 1 – 18, but the commission moved it to give broadcasters 60 days to consider new opening bid prices.

The original opening bid prices, released Oct. 15, have been recalculated “to reflect the corrected baseline and constraint files,” according to the PN. Constraint files comprise values related to potential interference in the repacked TV band, and population served.

“The update reflects a small number of engineering parameter changes to six stations and the license relinquishment of one station, which occurred in October,” the FCC states its Website with links to the constraint-file data.

The six stations with corrected information include:

• WNJU, Linden, N.J. (new geographic location and parameters);
• KOHD, Bend, Ore. (Ch. 51 move);
• KPXE-TV, Kansas City (Ch. 51 move);
• WPXA-TV, Rome, Georgia (Ch. 51 move);
• KWSU-TV, Pullman, Wash. (antenna height change);
• KEMO-TV, Santa Rosa, Calif. (discrepancy between station’s DTS facilities and information in commission databases).

Also, WAZE in Madisonville, Ky., was voluntarily downgraded from Class A to low-power status on Oct.19, 2015, which means it will not be protected in the repack and in turn, affects the constraint file data calculations.

The constraint file data is the FCC’s basis for calculating the opening bid price for a TV station license. Using a formula of population served times the interference value yields a “volume” figure, which is then multiplied by $900. The $900 figure is derived from $900 million, the FCC’s top value for a TV station, and divided into 1 million units.

“We had to come up with a scale for stations to price with lower volumes. We applied a metric of 1 million and calculated volume on scale of 1 million. We’re translating the $900 million figure to apply to every other station. It’s a two-step process,” an FCC official told TV Technology last February. (See, “FCC Proposes Top Station Opening Bids Totaling $39 Billion.”)

These prices further will be modified by which of the three options a station selects to participate: Full relinquishment or sharing; moving from a UHF to a high VHF; or from a UHF to a low VHF channel, where digital reception is less effective. These options were described in the August bidding procedures PN. (See, “Incentive Auction to Cost $226 Million.”)

Stations relinquishing their full 6 MHz to go off the air or share elsewhere will receive the full $900 x volume pricing. UHF stations moving to a low VHF will get 75 percent, or $675; and UHFs moving to a high VHF will receive 40 percent, or $360. Stations must elect one of the three options on their application—Form 177—all three, or a preferred option and a backup.

Stations accepted for participation will be presumed sold at the opening bid price.

The commission noted that “the correction of WNJU’s geographic location to One World Trade Center will make it the UHF station with the highest volume… and, therefore, the highest opening bid price. That change will also affect the population data of the largest number of other stations.”

WNJU displaced WCBS in New York as the FCC’s $900 million benchmark station. John Eggerton of B&Creported that the 99 percent of the revised opening bid prices “changed by less than 1 percent.”

The FCC will hold a workshop Tuesday Nov. 17, from 10 a.m. to 1 p.m. ET, on the reverse auction application process. Those in the D.C. area who wish to attend personally can register via email at auction1001@fcc.gov. It will be live streamed live at www.fcc.gov/live, and be available for on-demand streaming after the event. The email also will continue to be available for questions after the workshop.

See
November 2, 2015
“Channel-Sharing Rules Go Into Effect Dec. 2”
The eased channel-sharing rules allowing TV stations to select a back-up partner, and to communicate with potential sharing partners without fear of violating the incentive auction rules, go into effect Dec. 2.

October 16, 2015
“Auction Opening Broadcaster Bids Released”
The FCC today released the opening bid price that it will offer each broadcaster in the 2016 TV spectrum incentive auction. It provides the opening bids for the three participation options: relinquishment (including channel-sharing), moving from a UHF to a VHF, or a high VHF to a low VHF.

October 15, 2015
“Incentive Auction Application Window Opens Dec. 1”
The PN also addresses how to identify stations that are not needed in the auction, and which wireless providers are eligible for reserve bidding in each partial economic area, or PEA.

October 14, 2015
“Deadline for Petitions on Auction Bidding Procedures Established”
Petitions for Reconsideration of the Federal Communications Commission’s Aug. 11 Auction 1000 Bidding Procedures Public Notice are due Nov. 13.

August 11, 2015
“Incentive Auction to Cost $226 Million”
At 144 MHz, for example, the FCC estimates 8 percent of the population will experience some interference with wireless service, over-the-air TV reception, or both, in the 600 MHz band. At a 84 MHz, impairment would be around 14 percent; below 78 MHz, it’s capped at 20 percent.

February 9, 2015
“FCC Proposes Top Station Opening Bids Totaling $39 Billion”
The relationship between the maximum opening bid and high-end compensation differs in each market.

ARLINGTON, VA.—“It was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us, we were all going direct to Heaven, we were all going direct the other way….”

As we near the end of 2015, these words penned by Charles Dickens in 1859 seem oddly prescient in light of the impending incentive spectrum auction and repacking. All that’s missing is “nothing was certain but uncertainty itself!”

No matter how much broadcasters wish it would go away, the auction clock is ticking. However, it’s probably not the auction so much as it is the subsequent period for channel “repacking” to clear blocks of spectrum for the wireless broadband “victors” that’s keeping a lot of people awake at night.

In most TV markets, there’s going to be a lot of churn as broadcasters decide to either: (a) take the money and pull the big switch for the last time, or (b) keep operating, but with a high probability of having to change transmitting facilities.

While there can be no absolutes, given the complicated nature of “who stays and who goes” in a particular market, there are some things that the broadcasters should be thinking about right now. These include timelines and deadlines for filing for facility changes; obtaining construction permits; timelines for constructing new facilities; securing funding for facility changes; purchase of a new transmitter, antenna or both; temporary operating facilities; and operational contingency plans. Even if you’re in the former category, you need to think about legally winding down operations.

Joe Davis

WHAT’S GOING TO HAPPEN
To help station operators better prepare for what lies ahead I asked consulting engineer Joseph Davis, president of Chesapeake RF Consultants in Yorktown, Va., to share information about operator responsibilities and the various FCC-mandated post-auction deadlines.

Davis lists three categories of stations, excluding those electing to relinquish their spectrum, once the auction dust settles: (1) those staying on their current channel, (2) stations repacked to another channel within the same band and (3) band changers (broadcasters moving from UHF to VHF, or possibly from high-band V to low).

He noted that it’s not only stations that don’t participate in the auction that may be required to relocate to another channel, but also those offering up spectrum initially, but later dropping out of the auction due to insufficient bids or other reasons.

“If you don’t participle in the auction, but you’re a UHF Channel 48 or 49 you can expect to be repacked,” said Davis. “It’s important to know too that if you’re on Channel 20 you can also be repacked to make room for the guy in the next city. The FCC will try to keep stations on their current channel, but that’s not necessarily going to be the case. In some situations, a station might be assigned to a higher channel, but in most situations they will go down.”

INITIAL POST-AUCTION ACTIONS
So, what’s the first step operators must take once the auction ends?

 “If stations are relinquishing their spectrum, they have three months to wrap up operations and go off the air,” Davis said. “Stations that have elected to channel-share can stay on the air on this basis, but they have to cease operation on their old channel within six months. This may catch some operators by surprise. They need to have plans for executing channel-sharing arrangements very quickly.”

The FCC has made a provision to extend this deadline by six months in some special cases, but has stated that it will not entertain requests for any further extensions.

“The first deadline occurs three months after the FCC makes post-auction channel reassignments public,” Davis said. “Repacked stations have to file for construction permits and provide an estimate of their construction costs.”

Given the uncertainty of what post-auction operating frequencies may be available in a given television market, it may be time to explore antenna/transmitter options that might remain after the 2009 digital transition. Here a side-mount UHF antenna and top-mount VHF radiator still share a tower.

There will be $1.75 billion in funding set aside to help repacking stations defray construction costs. However, Davis noted that operators electing to move from a U to a V frequency will not be eligible to tap this fund. They must pay any reconstruction costs out of revenue gained from selling their UHF spectrum.

“After this initial three-month period, the 36-month ‘broadcast construction’ period begins, so there’s a total of 39 months,” Davis said. “The FCC stated that they will issue construction permits as fast as they can and that they are also going to establish varying construction deadlines. This means that FCC will review station location, weather conditions, and other factors in making a construction period determination, and some stations will have less than 36 months.

“At the same time, the FCC will be reviewing the cost estimates submitted and set aside up to 80 percent of the estimated costs for commercial stations and up to 90 percent for non-commercial stations. Stations can draw on these funds through electronic bank accounts with the submission of expense invoices to the FCC for review.”

VERY IMPORTANT DEADLINES
“You must cease operation on your old channel within 39 months after the date of the reassignment public notice,” Davis said. “There is no flexibility there at all. The FCC said they would entertain requests for a six-month extension of the construction deadline, but this does not extend the deadline for ceasing operation on the old channel.

“Worst case, a station might have to go dark if the construction takes too long. If you’re dark for 12 months, statutorily your license is cancelled. They’ve said there is a procedure for reinstating it in some cases, but that’s not too reassuring.

“What’s going to happen are ‘interim operations.’ We cannot expect that all stations will construct full and final facilities within 39 months. That’s just not practical. We’re going to see loads and loads of ‘interim operations.’ Maybe a transmitter and antenna for the new channel can be set up temporarily and operated at reduced power. A side-mount antenna might be used until a top-mount model can be installed. There’s also the possibility of setting up a “temporary” channel; it might be possible to ‘camp out’ on spectrum already relinquished by a station using that station’s former facility until more permanent facilities can be built.”

Davis observed that in order to accomplish repack, broadcasters would have to be given some leeway from hard and fast policies and rules.

“The FCC is going to have to give us some flexibility under STAs for interim operations just as they did in the last transition.”

WASHINGTON—The National Association of Broadcasters has asked regulators to reconsider the 39-month repacking window following next year’s TV spectrum incentive auction. The organization commissioned a study from Digital Tech Consulting, which concluded that “under ideal conditions, as many as 445 stations can be relocated to new channels within 39 months,” when as many as 850 to 1,150 stations may need to be repacked. (See: “Broadcast Spectrum Repacking Timeline, Resource and Cost Analysis Study”.)

“NAB has met on several occasions with wireless carriers to share our concerns that 39 months may not be sufficient enough time to complete a repack for all stations—which is dependent on how many stations the FCC intends to repack,” NAB Spokesman Dennis Wharton said.

The NAB filed the following ex parte communication to officials at the Federal Communications Comission today.

“Commission officials have noted on many occasions that the commission will not know how many broadcasters will be required to relocate until the auction is complete. In light of this fact, the commission’s one-size-fits-all deadline is manifestly unreasonable; clearly, the deadline for repacking 200 stations should not be the same as the deadline for repacking 1,200 stations.

“The draconian consequences for failing to repack within the commission’s deadline only compound this problem. The commission should therefore establish the deadline immediately following the auction, at which point it will know exactly how many and which stations must relocate. This will allow the commission to oversee an expeditious and successful transition in the 600 MHz band.

“In May 2014, the commission determined in its Incentive Auction Framework Order that every broadcaster required to relocate as a consequence of the auction must do so within 39 months following the auction’s completion.1 The consequences of failing to meet that deadline—regardless of whether the circumstances were within the broadcaster’s control—would be to force the offending broadcaster off the air, and deprive its viewers of free and over-the-air service.

“The FCC provided no flexibility in this rule; i.e., the commission did not develop a formal waiver process to address the circumstance where a broadcaster was unable to complete its move due to no fault of its own. The commission established its 39-month deadline based on the Spectrum Act, which permits the commission to reimburse broadcasters for costs associated with repacking up to 36 months following the conclusion of the forward auction. It did not ground the 39-month timeline in any data analyzing how long it might take to repack a large number of broadcasters across the entire country.

“While NAB understands the relationship between the reimbursement and physical repacking timelines, the commission has expressly provided for broadcasters to receive a “final allocation” of costs based on actual and remaining estimated costs prior to the end of the three-year reimbursement window.

“Indeed, in declining to require that international coordination be completed before the auction, the commission itself noted that this would not put border stations at risk for nonreimbursement because those stations could receive such final allocations for outstanding costs.

“Plainly, regardless of the statutory reimbursement deadline, the commission has the discretion to develop its repacking timeline based on the facts once they are definitively known, rather than an arbitrary deadline divorced from the task at hand. Depending on the number of stations that ultimately must move to new channels, the current deadline of 39 months may not be achievable.

“In a report commissioned by NAB, Digital Tech Consulting, Inc. concluded that, under ideal conditions, as many as 445 stations can be relocated to new channels within 39 months. However, if the transition requires more stations to repack, there is simply no way additional stations will be able to meet the current hard deadline.

“This is not a reasonable approach. Rather than simply establishing a new arbitrary deadline, NAB urges the commission to wait until the conclusion of the auction to set a transition deadline based on the scope of the nationwide repack. This would allow it to, for example, shorten the deadline should fewer stations than expected need to repack.

“It would also allow the commission the flexibility to extend the deadline should the commission need to repack as many as 850 to 1,150 stations, as previously released commission data has suggested.6 Under any circumstances, NAB believes that the deadlines should be aggressive but reasonable, designed to achieve a transition that enables successful forward auction bidders to begin operation while also ensuring a seamless transition for broadcasters and their viewers.

“Repacking the broadcast television band will play a critical role in a successful broadcast spectrum incentive auction. The spectrum the commission can offer wireless carriers in the forward auction will come not only from broadcasters’ voluntary relinquishment, but also from reorganizing the television band. It is critical that this process go smoothly to ensure that wireless carriers can commence operations in a timely fashion and broadcasters can successfully relocate to new channels with only minimal disruption to their viewers.

“The commission should eliminate the current, hard 39-month deadline, and instead work with stakeholders to develop a regional transition plan that will allow for the most expeditious, efficient repack possible once the auction is complete.

“At that point, it will be clear how many stations must actually move. The Media Bureau, which already has delegated authority to assign individual station construction deadlines, should assign those deadlines based on an ambitious, yet attainable, schedule that will ensure that no station is forced off the air due to circumstances outside its control. In any event, the commission should establish a well-defined waiver process to address stations that are unable, despite diligent efforts, to complete the transition by their assigned deadline.”

WASHINGTON—The eased channel-sharing rules allowing TV stations to select a back-up partner, and to communicate with potential sharing partners without fear of violating the incentive auction rules, go into effect Dec. 2.

The Federal Register published the revised channel-sharing rules on Monday, triggering the 30-day effective date of Dec. 2, 2015. The Federal Communications Commission adopted the rules Oct. 21 in a Second Order on Reconsideration that modified intitial rules to make it easier for broadcasters to hammer out channel-sharing agreements before the auction commences March 29, 2016.

The rules added the option of selecting a back-up sharing arrangement in the event that both channels involved in a CSA are frozen during bidding in the reverse auction.

“It would enable both parties to a CSA to participate in the auction while mitigating the risk that the auction system could freeze both stations in the same round and thus deprive both stations of a post-auction host or ‘sharer’ station,” the commission said.

The commission was concerned that some stations would not participate in the auction if there was a risk of going off the air all together.

“By allowing the parties to secure a fallback arrangement in the event that both parties relinquish their spectrum usage rights in the auction, this clarification will help promote wider participation in the auction by broadcasters that require assurance that they will remain on the air in the DMA,” the FCC rules stated.

The commission rejected broadcaster requests to allow “contingent multi-party CSAs across multiple markets,” on the grounds that allowing them would cross antitrust rules. Stations are strictly prohibited from communicating with one another about participating in the auction with the exception of those stations in a CSA or a back-up CSA that is filed with the FCC by the auction application deadline, Dec. 18.

This prohibition runs from Dec. 18 to the close of the auction. Post-auction CSAs will be allowed within a permitted window of time, an FCC spokesman said.

Stations can only communicate with the back-up CSA party if both parties to the original sharing arrangement end up frozen out of the TV band.

“If… the auction system determines that the station can never be assigned a feasible channel in its pre-auction band in the current stage, then parties to a back-up CSA may communicate regarding bids and bidding strategy and must cease communication of this type with the party to the original CSA.”

If a host station of a CSA is frozen but wishes to continue participating in the auction, it may communicate with its provisional sharing partner.

Also see…

October 15, 2015
“Incentive Auction Application Window Opens Dec. 1”
Broadcasters who want to participate it the TV spectrum incentive auction will have 18 days to file their applications. The Federal Communications Commission on Thursday released its Applications Procedures Public Notice, which includes the dates of the application window.

For more information on the Spectrum Incentive Auction, join TV Technology, B&C and auction experts discussing what must be anticipated in the months to come regarding planning for, and participating in, the auction, in a live Webinar on Thursday, Nov. 5 at 2:30 p.m. ET. Please register at https://nbmedia.wufoo.com/forms/spectrum-auction-preparation-pp86mny0bbremz/.

WASHINGTON—Broadcasters’ opening bid prices are out. The Federal Communications Commission today released the opening bid price that it will offer each broadcaster in the 2016 TV spectrum incentive auction. It provides the opening bids for the three participation options: relinquishment (including channel-sharing), moving from a UHF to a VHF, or a high VHF to a low VHF.

Each was calculated based on the Aug. 11 Bidding Procedures Public Notice, and the bidding constraint data—population served and interference factor, particularly—released yesterday in the Applications Procedure Public Notice. That notice defined the broadcaster filing window for the reverse auction as noon, Dec 1, through 6 p.m. on Dec. 18.

A full-power or Class A will have to file during the filing window, set for noon, Dec. 1 through 6 p.m., Dec. 18. These applications are not binding until Marc 29, 2016, the day the reverse auction begins. Applications will not constitute a binding commitment, but after Dec. 18, no other station will be able to apply to participate in the auction.

There are a number of stations for which the commission was able to keep in the pre-auction TV band, and are defined as “not needed” in the accompanying .pdf with the opening bids for all stations, TV Technology will continue follow up on this information:
/portals/0/Reverse Auction Opening Prices 101615 Attachment.pdf

WASHINGTON—The Federal Communications Commission is getting busy. The just-released agenda for its Oct. 22 public meeting includes several incentive auction-related items, one on foreign ownership and another on flexible use in the 24 GHz band.

The commission will consider a Second Order on Reconsideration on channel-sharing. The intent is to “to provide additional flexibility to broadcasters interested in the incentive auction channel sharing option by clarifying that ‘back-up’ channel sharing agreements are permitted under the rules, and providing more time for successful incentive auction bidders to transition to shared facilities after the auction.” Docket No. 15-137.

The commission also will consider a Third Report & Order and First Order on Reconsideration that adopts rules to govern interservice interference between broadcast television stations and wireless licensees in the 600 MHz band after the auction, and sets out protection criteria for television stations and wireless operations in the band. Docket No. 14-14.

Another Report and Order on the agenda addresses when and in what areas 600 MHz band wireless licensees will be deemed to “commence operations” for the purposes of establishing when the secondary and unlicensed users must cease operations and vacate the spectrum in those bands.

Foreign ownership will be the subject of a Notice of Proposed Rulemaking that would streamline the review process for broadcast licensees and applicants, and standardize the review process for broadcast, common carrier and aeronautical licensees and applicants.

A final Notice of Proposed Rulemaking proposes to create new flexible use service rules in certain bands above 24 GHz to support multiple uses, including mobile wireless.

WASHINGTON—The last day to file a petition to challenge incentive auction bidding procedures has been set. Petitions for Reconsideration of the Federal Communications Commission’s Aug. 11 Auction 1000 Bidding Procedures Public Notice are due Nov. 13.

The deadline was established this week when the Public Notice was published in the Federal Register Oct. 14.

“As necessary, the commission will provide notice of any petitions for reconsideration received and establish a pleading cycle for oppositions and replies,” the FCC said.

The bidding procedures PN laid out the strategy for the reverse auction, in which broadcasters will be able to voluntarily sell their 6 MHz licenses, and forward auction, in which wireless providers bid on relinquished broadcast spectrum. It also included a spectrum clearing target range of 42 to 144 MHz—to be honed in on further after the commission has an idea how many stations will participate. Several other aspects cover how and where remaining TV stations may end up in the spectrum as well as international coordination.

The pleading cycle established for any “timely filed” petitions for reconsideration will be “applied to the National Association of Broadcasters’ Petition for Reconsideration,” filed Sept. 11. The NAB’s petition objects to stations ending up in a wireless no-man’s land after the auction. The commission is proposing that it be allowed to place TV stations that it cannot relocate in the reduced TV band in the duplex gap—the spectrum buffer zone between up- and downlink wireless bands.

“NAB asked the FCC to reevaluate two aspects of the incentive auction, whose procedures the commission passed in August on a split 3-2 vote,” the NAB said. “NAB’s motion requests the FCC reassess its rules allowing for the relocation of some broadcasters into the ‘duplex gap’ that the commission had previously proposed for the use of wireless microphones. In addition, the motion also asks the FCC to re-evaluate the level of spectrum variability the FCC will permit between markets in light of recent agreements with Canada and Mexico governing spectrum allocation.”

The NAB also filed a Petition for Clarification seeking information on how the FCC intends to determine which stations fall into the gap.

Portions of the Procedures PN could be read to suggest that the Commission is planning to relocate in the 600 MHz band only those television stations that do not participate in the reverse auction or do not participate in a particular manner,” the NAB said. “NAB requests that the commission clarify that all broadcasters will receive equal treatment in repacking , regardless of whether and how they participate in the auction, if their bids are not ultimately accepted.”

The TV spectrum incentive auction is set to commence March 29, 2015.

WASHINGTON—A group TV stations owners intending to sell their spectrum in the upcoming incentive auction has disbanded. The Economic Opportunities for Broadcasters Coalition, led by former ABC executive Preston Padden, is no more.

“First, we were formed to advocate for the rules of the spectrum,” which are largely done, Padden said. “And second, for the anti-collusion rules. We would have had to follow very strict anti-collusion rules.”

The wiser course of action was to disband, he said.

The EOBC was comprised a total of 87 TV stations held by an undisclosed number of owners. Padden said he anticipated that most of those stations would participate in the auction, in part due to the influence of the EOBC on the formation of the auction rules.

To that end, the group, via Padden, fought tooth and nail against dynamic reserve pricing, a mechanism proposed by the Federal Communications Commission that would have allowed it to pay a lower price than a TV station accepted if that TV station was relocated where it caused interference in the newly designated wireless band.

DRP left a chasm of uncertainty with regard to what a selling broadcaster would be paid, and EOBC wasn’t alone in its opposition to it. A Fox executive speaking at an event in Washington last May said Fox likely would not participate in the auction of the commission kept DRP in the rules.

It did not.

EOBC members also favored more relaxed channel-sharing rules and a station valuation formula based on interference, both of which stand.

Padden remained bullish about the auction, and said the group believed there would be “strong participation” of both TV stations and wireless bidders. He said Sprint’s weekend announcement that it would not to participate in the TV spectrum auction would have “zero” impact.

“Verizon and AT&T and T-Mobile and other carrier bidders will be in the forward auction, we are convinced it will be a huge success,” Padden said.

EOBC member stations were never identified. Congress ruled that TV stations may participate anonymously. Further FCC rules will prohibit TV stations owners from discussing the auction. This anti-collusion parameter was laid out in the commission’s Bidding Procedures Public Notice, released in August.

The Notice said the commission would impose a “prohibition on communicating information relating to bids or bidding strategies, such as non-public information that bidders may access in the auction system, to broadcast licensees eligible to participate in the reverse auction or to forward auction applicants, subject to specified exceptions.”

At one point, the anti-collusion rule raised concerns among 11 D.C. law firms that represent “most television stations participating in the reverse auction,” according to a joint filing addressed to the Federal Communications Bar Association and obtained by TV Technology.

“The primary concern was that the application of the anti-collusion rules should not unduly restrict broadcasters’ right and ability to retain the counsel of their choice prior to and during the reverse auction,” it said. “Few television broadcasters have any experience with the FCC’s auction procedures and, given that lack of experience and the fact that the reverse auction may involve choices affecting the entire future of a company, the group expects that clients, particularly smaller firms that do not have in-house counsel, will want to be able to obtain the judgment of their long-time attorneys as the reverse auction proceeds.”

Ari Meltzer of Wiley Rein said it was no longer a concern among attorneys representing stations, versus the EOBC, where stations held by different owners are in direct contact with one another.

More details about the anti-collusion rule are expected in an Applications Procedures Public Notice to be released next month.

Padden, now a semi-retired grandfather living in Boulder, Colo., said he would continue to consult on the auction, and gave the commission high marks for conduct. He singled out FCC Chairman Tom Wheeler and Incentive Spectrum Auction Task Force chiefs, Gary Epstein and Howard Symon.

“I’ve been around the FCC for 40 years. The normal course is that the chairman and the staff draft a decision, they circulate it, and reporters and advocates have to find a friendly person on the eighth floor to leak the information,” he said. “In this case, Wheeler, Epstein and Symon behaved differently. They invited all stakeholders in to examine the draft decision. The process was more open than anything I’ve seen at the FCC, and saved people running around the eighth floor seeking information about the draft.”

Also see…
August 15, 2015
“Shh! Public TV Questions Auction Quiet Period”
Just how quiet is the “quiet period” following the deadline to apply for the TV spectrum incentive auction? Inquiring public TV station minds want to know.

December 12, 2014
“FCC Clarifies Auction Pricing, EOBC Disputes It”
Organizers of the 2016 TV spectrum incentive auction said a pricing discrepancy in official documents represented a floor and a potential goal, not a vacillation.

OVERLAND PARK, KAN.—Sprint is sitting out the upcoming TV incentive spectrum auction. Marcelo Claure, CEO of the nation’s No. 4 carrier made the announcement on Saturday.

“After thorough analysis, [Sprint] announced today that it will not participate in the 600 MHz incentive auction. Sprint has concluded that its rich spectrum holdings are sufficient to provide its current and future customers great network coverage and be able to provide the consistent reliability, capacity, and speed that its customers demand.”

Sprint also sat out last year’s AWS-3 auction, which raised around $45 billion and ignited new interest in the TV spectrum incentive auction, scheduled for March 29, 2016. When Sprint pulled out of the AWS-3 auction, a spokesman for the company told Bloomberg it would “evaluate the opportunities presented by the upcoming 600 MHz incentive auction.”

Sprint already has around 150 MHz of AWS (advanced wireless service) spectrum in the 2 GHz band. That spectrum is particularly useful for cellular communications because the high frequencies are compatible with the type of small antennas housed in cellphones. When the AWS-3 auction concluded, the value of Sprint’s 2 GHz spectrum was estimated to be $115.1 billion, or 1.4 times the company’s enterprise value, according to Larry Darrell at BidnessEtc. Sprint also was hemorrhaging money at the time, so there was some speculation about it selling some of its 2 GHz licenses. Claure said that wasn’t necessarily the case.

“We’re always running different analysis that says how much spectrum do we need, so we are always open and looking at potential offers,” he said on the company’s 3Q14 conference call. “That doesn’t mean that we’re out there marketing the sale of our spectrum.”

Sprint has since cut its losses—from $224 million in the first quarter of 2015 to $20 million in the most recent quarter—and Claure signaled that the carrier intends to develop its spectrum.

“Sprint has started a major effort to increase coverage and capacity by densifying its network and increasing the number of cell sites using its existing spectrum,” he said. “Sprint is already deploying new technologies, such as carrier aggregation, that unlock the potential of its strong 2.5 GHz spectrum position. The company has seen positive results from its infrastructure upgrades in key U.S. markets, as RootMetrics surveys increasingly show. Sprint is laser-focused on building on that progress and is steadfast in its mission to have a world-class network for consumers and businesses.”

With regard to what impact Sprint’s nonparticipation will have on the auction, Preston Padden, head of the Economic Opportunities for Broadcasters Coalition, (which disbanded this morning) said Sprint’s exit would have “zero” impact.

FCC Commissioner Ajit Pai disagreed. Pai opposed setting aside a “reserve” amount of spectrum in the incentive auction for carriers other than Verizon and AT&T, the nation’s No. 1 and 2 carriers respectively.

“Sprint’s decision not to participate in the incentive auction highlights the folly of the FCC’s attempt to pick winners and losers before the auction begins,” he said in a statement. “It also intensifies doubts about how competitive the bidding will be for set-aside spectrum and whether American taxpayers will receive fair compensation for that scarce public resource. Sprint’s announcement only strengthens my belief that the FCC should not have granted a spectrum giveaway in this auction or placed artificial limits on carriers’ participation.”

Marci Ryvicker of Wells Fargo also was skeptical about Sprint’s exit.

“First, we remind you that we have been begging D.C. and specifically [FCC] Chairman [Tom] Wheeler to take the wireless commentary seriously. However, it appears the proposed March 29 auction start is more or less set in stone for political reasons,” she wrote in response to Sprint’s announcement.

”In our opinion, a delay in the auction is appropriate, as it provides the FCC time to actually answer a whole host of concerns from both sides—broadcast and wireless‑and would also be economically beneficial by allowing AT&T, Dish, Verizon, Sprint, T-Mobile etc. to get their finances in gear following some major M&A and the AWS-3 spectrum auction. Our view is a delay to 2017 would be a net positive for all, especially broadcasters given wireless might be more committal and it would give us a potential catalyst in a non-presidential year.”

See John Eggerton’s coverage at B&C.