FCC Puts Broadcaster Incentive Auction on Hold

Doug Lung

FCC Chairman Tom Wheeler has announced a delay in the Incentive Auction of UHF television spectrum. Wheeler, in a Dec. 6 posting on the Official FCC Blog stated that the plan to recover spectrum had been delayed for at least another year. ““I believe we can conduct a successful auction in the middle of 2015,” he wrote. “ To achieve that goal, there will be a number of important milestones along the way.”

In the same blog, Wheeler praised the work of the Incentive Auction Task Force, saying it “has been working with the focus and speed of a start-up, while meeting the high standard of public engagement and deliberation required of a government agency.”

And after listing the key ingredients to a successful auction, he wrote: “Beyond the policy issues, however, we must also exhaustively test the operating systems and the software necessary to conduct the world’s first-of-a kind incentive auction,” adding “as any responsible manager knows, managing a complex undertaking such as this also requires an ongoing commitment to continuously and honestly assess its readiness and its project plan.”

A Report and Order on the auction is expected in spring 2014. In the second half of 2014 the Task Force plans to release an Auction Comment Public Notice and a Procedures Public Notice that will provide additional details and seek comment on how the specific parts of the auction will actually function. More details on the timeline will be provided in a presentation at the January 2014 Commission meeting. See Official FCC Blog: The Path to a Successful Incentive Auction.

Also this week, Rick Kaplan, NAB executive vice president of strategic planning, described some of the issues the FCC must resolve to have a successful auction in his statement before the Senate Committee on Commerce, Science, and Transportation. A key issue is ensuring broadcasters in border regions can be repacked.

Even if the border coordination issues are solved, the repacking will be complicated.

Kaplan explained: “Unfortunately, the DTV transition will be a walk in the park compared to the repacking process that is part and parcel of this auction. The final channel changes of the DTV transition involved the FCC repacking only about 100 stations. Both viewers and broadcasters had more than five years to prepare for the change, and each station had a second channel on which to ensure a smooth transition. In the post-auction repacking, it is likely that many more stations will be repacked--perhaps in excess of 500--and stations will be required to “flash cut” to their new channel, meaning there is no second channel, and stations will have to quickly move from one frequency to another, resulting in a bumpy ride for consumers.”

Kaplan repeated the broadcasters' position that viewers are not fungible--it isn't sufficient to say that if a station retains the same net number of viewers everything is fine. If a viewer receives a station now, they should be able to continue to receive the station after the repacking.

“It's the viewers that matter most, and consumers should have access to the stations they receive today after the auction, provided those stations remain on the air,” said Kaplan.

He also criticized the FCC's proposal to use proxy channels to speed calculations during the auction, saying: “Under another proposal currently being developed, the Commission would use a 'proxy' channel to calculate a station’s service area during the auction process, instead of the station’s actual channel. Thus, rather than measuring the actual interference a station will receive from another station on the channel it will operate on after repacking, the FCC will choose a different 'proxy' channel to measure interference. This kind of approximation, however, cuts corners, and could result in a service loss or gain in a significantly large number of instances.”

Kaplan warned the lawmakers: “Your constituents will have no idea whether their wireless provider acquired an extra 10 megahertz in the auction to add to its 135 megahertz in their market; but I can guarantee they will start dialing your phone numbers when they are suddenly no longer able to receive the broadcast television stations they’ve relied upon for years, if not decades.”

For the full testimony, see the Statement of Rick Kaplan.

Several other auction stakeholders also provided testimony at the hearing. A video of the hearing and their prepared presentation is available at Hearings: Crafting a Successful Incentive Auction: Stakeholders' Perspectives.

The Competitive Carriers Association and AT&T spoke at the Senate Commerce Committee hearing. One of the major issues to be resolved before the Incentive Auction can take place is whether to restrict the amount of spectrum large carriers like AT&T and Verizon bid on.

On Wednesday the FCC's Wireless Telecommunications Bureau released a Public Notice seeking comment on a proposal to license the 600 MHz band using “Partial Economic Areas.” The FCC originally proposed licensing the 600 MHz band using Economic Areas (EA), but some commenters in the Broadcast Television Incentive Auction NPRM argued that EA licenses are too large for small and rural operators to obtain at auction or deploy. They proposed using Cellular Market Areas (CMAs) instead. Others opposed CMAs noting they do not “nest” (fit neatly) within larger EA-based license areas and could frustrate a carrier's ability to acquire a larger footprint.

The Competitive Carriers Association's solution was to create PEAs--Partial Economic Areas--that are a subdivision of EAs based on CMA boundaries such that some licenses consist of large population centers while other PEAs consist of less populous areas. AT&T urged the Commission to seek public comment on the PEA proposal and to allow package-bidding. AT&T supports a national package bidding approach in conjunction with a PEA-based licensing approach, or at a minimum, a package that consists of the top 100 markets.

See Public Notice DA 13-2351 for more details and the deadlines for filing comments and reply comments. A Map of Proposed PEA Boundaries is also available.

I commend Chairman Wheeler for taking a hard look at the complexities of the FCC's first Incentive Auction and being willing to extend the deadlines to greatly improve the chances it will be successful. Unlike his predecessor, Wheeler doesn't seem as willing to overlook the real complexities and technical constraints that could thwart the FCC and Congress's lofty goals. As a result, I think he stands a much better chance at achieving a successful incentive auction at best, and at worst, avoiding a disaster where TV broadcasters, their viewers, wireless carriers and their customers are frustrated and valuable spectrum is wasted.

I'll offer my comments on possible ways the FCC could balance the needs of broadcasters, their viewers and wireless broadband users in my special New Year’s RF Report.

Doug Lung is one of America's foremost authorities on broadcast RF technology. He has been with NBC since 1985 and is currently vice president of broadcast technology for NBC/Telemundo stations.