FCC Releases 126 MHz Clearing Target

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.”