Incentive Auction Bidding Procedures NPRM Should Make TV Stations Worry

Posted on December 31st, 2014 by

If you weren’t already concerned about how the FCC was going about implementing Congress’ authority to conduct an incentive auction to repurpose TV spectrum for broadband uses, you should be now. The FCC has now issued its next rulemaking to prepare for the auction. This 167 page document sets out proposed bidding procedures that give the closest view of what might really happen in the auction.

Here are a few brief takeaways that explain our concern. Computation of station values is based on a weighted score of a station’s population, a direct effort by the FCC to control the price stations might receive for participation. While the document sets opening bid prices for spectrum based on new geographic zones, several of the values seem incongruent with the earlier study the FCC released a few months ago. Stations repacked after the auction could be scattered throughout the spectrum instead of all being repacked below a certain channel, thus introducing potential interference problems between broadcasters and broadband companies. And according to one analysis, the number of TV stations repacked based on the FCC’s plan would cause a significant shortfall in the amount repacked stations would be reimbursed.

Some of this will be sorted out in the pending litigation against the FCC. Some of it will be worked out in the actual rulemaking. But rest assured, TV stations should be paying attention. The two Republican Commissioners certainly were, and they objected to and voted against the FCC’s bidding procedures NPRM.