May 31st Start For Clock Phase of TV Auction

That loud exhaling noise is a collective sigh of relief from the broadcast industry and all those connected to it in some way. The clock phase of the incentive TV auction – where bids drop each round and stations that are participating decide whether to stay or go – will get underway on May 31^st. No one can precisely say when the reverse auction will be over, but most are guessing that it will take 6-10 weeks. After that, the FCC will run the forward auction, where entities bid to purchase the spectrum vacated by broadcasters in the reverse auction. That will take a few months as well. Once the FCC determines that the criteria for a successful auction have been met, the auction will be declared over. The earliest this is likely to occur is late-October or sometime in November.

Could it go longer? Yes. If the FCC’s satisfaction criteria are not met, it will have to reset the clearing target (currently 126 Mhz) to a lower target, re-start the reverse auction with those broadcast participants that remained at the end of the first phase of the auction, and have the entities that want the spectrum continue bidding until the satisfaction criteria are met. If this scenario comes to pass, the timing for auction completion becomes less clear, likely ending sometime in 2017.

The FCC only has one chance to complete the auction – there are no second bites at the apple. So that’s why it has been designed with fallback phases so that failure is not an option, only less spectrum cleared.

If you’re not playing in the auction, or find yourself on the outside looking in after either the FCC determines your station is not needed, or you decide that the FCC’s offers don’t align with your plans, all of your attention should be focused on how the FCC will “repack” the TV spectrum. We believe the FCC will announce various procedures and game plans for the repack in an order issued this summer. We’ll be interested to learn whether the FCC takes an “all at once” nationwide approach to the repack, or a regional approach, or a “corners” approach where repacking starts in Vermont, Florida, California and Washington and moves toward the center of the country.

As a reminder, the FCC’s anti-collusion rules remain in place until the end of the auction. Be cautious in your communications with others to stay clear of any rule violations. That applies even to stations that are not participating in the auction that may receive information about the status or strategy of a participating station.