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Lawsuits Drive FCC Incentive Auction Delay

WASHINGTON—The Federal Communications Commission quietly announced it would delay the spectrum incentive auction to early 2016. The revelation came, not from an official announcement from the agency, but in a blog post by Incentive Auction Task Force Chairman Gary Epstein on Friday.

“Now is a good time to take stock of where we are and where we are going. It is also time to carefully consider and recalibrate our proposed timing for the commencement of the incentive auction,” he said.

Epstein cited legal challenges leveled by broadcasters for instigating the delay. The National Association of Broadcasters sued the commission over a section of its incentive auction rules that lays out the calculative methodology for repacking TV stations after the auction in the remaining spectrum. The NAB says the methodology, incorporated into software called “TVStudy,” does not preserve the same signal coverage area TV stations now have, which they say Congress directed the FCC to do. (See “NAB Sues FCC Over Incentive Auction Rules.”)

A second lawsuit brought by Sinclair Broadcast Group of suburban Baltimore asks the court to vacate the rules all together. Both lawsuits, filed in the U.S. Court of Appeals for the D.C. Circuit, will be heard in tandem starting with briefs on Oct. 31.

The plaintiffs requested an expedited hearing schedule with the court, which complied, but the schedule still pushes the process into 2015. The commission initially was shooting to hold the auction in June of 2015.

“Oral arguments will follow at a later date yet to be determined, with a decision not likely until mid-2015,” Epstein wrote. “We are confident we will prevail in court, but given the reality of that schedule, the complexity of designing and implementing the auction, and the need for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the auction in the fall of 2015 and starting the auction in early 2016. Despite this brief delay, we remain focused on the path to successfully implementing the incentive auction.”

The NAB’s Dennis Wharton issued the following statement after Epstein’s blog post went live:

“As NAB has said repeatedly, it is more important to get the auction done right than right now.
"Given its complexity, there is good reason Congress gave the FCC 10 years to complete the proceeding. We reject suggestions that our narrowly focused lawsuit is cause for delay. We look forward to a speedy resolution of our legal challenge and a successful auction that preserves access to free and local TV for every American.”