The 167-page FCC Public Notice (FCC 14-191) released this week seeking comment on “competitive bidding procedures for broadcast incentive auction 1000, including auctions 1001 and 1002” mainly deals with less technical topics such as bid pricing and procedures. However, reading through the FCC's tome, I noticed the procedures proposed could assign certain stations to frequencies in the 600 MHz band that are either shared with wireless carriers or in the duplex gap, which is supposed to provide needed spectrum for white space (TV band devices) and wireless microphones. While that was expected, what I was surprised to read was that the actual spectrum assigned to these unlucky stations could be anywhere in the 600 MHz band. The channel would be picked by the optimization procedure and could put stations in the upper part of the band used for cellular uplinks!
The Public Notice states, “In cases where a television station must be assigned to a channel in the 600 MHz Band in order to meet a given clearing target, we propose to assign these stations based on our goal of minimizing the loss of value due to impairments, i.e., minimizing the total impaired weighted-pops nationwide. Under this proposal, the optimization procedure could assign TV stations to any frequency in the 600 MHz Band. This could lead to assignments in the uplink portion of the 600 MHz Band in some markets, and in the downlink portion in others.” The FCC recognized that “this approach may result in assigning television stations to the duplex gap or other guard bands in some markets, and limit the contiguity of TV stations if they are not assigned to the downlink portion of the 600 MHz Band.”
It will be interesting to see the comments filed on this approach. It appears to cause problems for everyone. Wireless operators won't want a TV station in the middle of their uplink band, where during episodes of enhanced propagation that station could wipe out base stations over a wide area, nor will TV stations want to deal with the interference from users' wireless equipment in close proximity to their TV sets. However, if the optimization software says it will result in more spectrum and more money for the government, a TV station could find itself in the high UHF band. To add insult to injury, if that TV station was using 1,000 kW on a lower UHF channel, it would not be able to increase power to offset the reduction in coverage due to the dipole factor. Of course, the optimization software would probably assign stations already on high-UHF channels into the shared/impaired 600 MHz spectrum to comply with the FCC's objective of keeping coverage loss to under one percent.
The FCC's proposed opening bids highlight the difference between low-VHF, high-VHF and UHF TV spectrum, but it has as much to do with availability of channels as it does with coverage. Stations moving from UHF or high-VHF to Low-VHF would receive an opening bid between 67 and 80 percent of the station's price to go off-air. Stations moving from UHF to high-VHF would get an opening bid between 33 and 50 percent of the station's off-air price. The FCC notes that these would only be the opening discounts. “Final discounts for the VHF options will be determined by the demand by bidders for VHF channels and the availability of those channels.”
Since there are only five low-VHF channels and only seven high-VHF channels, if a large number of stations want to give up their UHF channel to move to VHF it could boost the price for the VHF channels, some of which are held by Class A LPTV stations eligible to participate in the auction!
The Public Notice analyzes the situation this way: “There are substantially more unoccupied Low-VHF channels than High-VHF channels. As a result, in nearly all markets, a station could move to a Low-VHF channel without the need to reassign any channels in that band. Conversely, there are relatively few markets where a station could move to High-VHF channels unless other stations vacate that band or are repacked within the band. In at least some scenarios, therefore, we may need to pay two stations in connection with a UHF-to-High-VHF move: a High-VHF station to vacate its channel, and UHF licensee to move to High-VHF. A smaller discount, i.e., a higher opening price, for the Low-VHF option would signal the greater value of this option to the auction.”
The FCC's proposal for determining the final TV channel assignment plan includes maximizing channel “stays” (no channel change), minimizing aggregate new interference over one percent, minimizing relocation expenses (using “publicly available data”), and, finally, “prioritizing multiple objectives.” The last objective means the FCC would make trade-offs between the first three objectives, proposing assigning priorities (highest to lowest) to no channel change, interference to less than one percent, least relocation expense.
The Public Notice proposes broadcast spectrum clearing target of 84 MHz—all UHF channels above channel 36—which would result in 70 MHz of spectrum available for the forward auction after allowing for the duplex gap and guard bands. While significantly less than the 120 MHz originally proposed in the National Broadband Plan, this target isn't a surprise given past comments from FCC Commissioners.
Although it seems unlikely the FCC will modify the procedures outlined in the Public Notice after reading the statements from the dissenting Commissioners, comments can be submitted up to Jan. 30, 2015, with the deadline for reply comment Feb. 27, 2015.