TV Spectrum Auction Update

The FCC voted 3-2 at its May meeting to adopt a Report & Order related to the TV incentive auction.  Other than broad generalizations that are available from an FCC public notice, and the tidbits that could be gathered from the online video of the meeting and dissenting commissioner statements, details of the decision are not known because the FCC has still not released the order it adopted.

While it is not uncommon for the FCC to delay issuing the actual text of the orders they adopt at meetings, the “lag” time in doing so has been reduced to 2-4 days in recent years.  As of this writing, it has been 12 days since the incentive auction meeting and vote.

The one thing we were concerned about – issuance of a “half” order of sorts without complete decisions on issues affecting broadcasters – apparently occurred.  So how the repacking of TV spectrum will work, interference will be calculated, and reimbursement of costs will be determined have all been delegated to the Media Bureau and were not decided by the Commission.  This “punt the hard stuff down the road” approach is precisely the type of inaction that leaves broadcasters in a quandary, not knowing whether they should look into participating, and not having a clue as to the vitality or viability of their current broadcast business model in a post-auction world.

NAB has made clear that the FCC’s decision makes the incentive auction involuntary for broadcasters, violating the Congressional requirement that the auction must be voluntary.  In our humble estimation, it would appear that the FCC’s Report & Order – whenever it is finally issued – will result in years of litigation.  But that doesn’t mean that the FCC won’t proceed with the auction anyway, as they have conducted auctions despite pending litigation in the past.  The only difference here is Congress’ clear directive that the FCC has one opportunity to get this right.  So if the issues raised in the litigation are those that might jeopardize the success of the auction, the FCC might be convinced to wait for the litigation outcome before conducting the auction.