February 10, 2017 - 4:18 pm
By Gary Epstein | Chair, Incentive Auction Task Force
Jean L. Kiddoo | Deputy Chair, Incentive Auction Task Force

Today marks the end of all clock phase bidding in the incentive auction. This is a noteworthy event for winning bidders and an appropriate moment to appreciate the auction’s success in using market forces to allocate spectrum to its highest and best use.

With $19.6 billion in forward auction clock phase gross winning bids, the incentive auction will generate the second highest total proceeds of any Commission spectrum license auction in its 20-plus year history. The public stands to gain substantial economic benefits from mobile broadband utilizing the 84 megahertz of spectrum repurposed by this auction. 

In addition, the auction will provide more than $6 billion to the U.S. Treasury for deficit reduction, more than $10 billion to broadcasters that chose to relinquish spectrum usage rights, and up to $1.75 billion for other broadcasters that incur costs in changing channels.  And, for winning stations that will remain on the air through channel sharing or changing bands, auction proceeds will provide an infusion of capital for them to reinvest in programming and other activities.

This is also a good time to lay out in greater detail what lies ahead in the coming months.

Assignment Phase

The clock phase of the auction is over, but there is one more step to go. The auction will now proceed to the assignment phase, in which winning forward auction bidders – who up to now have bid for generic license blocks – will have the opportunity to bid for frequency-specific licenses. This will be useful for winners seeking to deploy service using the same frequencies across multiple markets or regions.  Bidding in the assignment phase is not mandatory for winning forward auction bidders; they will still receive the number of license blocks they won regardless of whether or not they bid in the assignment phase. 

The Commission will release a public notice in the near future to announce the schedule for the assignment phase, including practice and mock auctions. It will also make available an assignment phase tutorial and bidding system user guide. We expect that bidder education and assignment phase bidding will take several weeks.

Closing and Channel Reassignment Public Notice

After bidding in the assignment phase concludes, the Commission will prepare a Closing and Channel Reassignment Public Notice announcing the formal close of the incentive auction and providing important information about the winning bidders and the post-auction TV band, including:

  1. The results of the reverse auction, including the winning stations, the markets they serve, their incentive payments, their successful bidding option (moving off-air or to a different band), and whether they indicated an intent to channel share;
  2. The results of the forward auction, including the winning bidders, the prices paid, and the specific frequencies they won in the assignment phase. The public notice will set the deadline by which winning bidders will then file “long form” applications to apply for licenses to operate on those frequencies;
  3. The post-auction channel assignments for all reverse auction-eligible stations who will remain on the air after the auction; and
  4. The date by which each station must transition off its pre-auction channel.

Post-Auction Transition

The release of the Closing and Channel Reassignment Public Notice also marks the start of the 39-month transition of the 600 MHz band. The Transition Scheduling Plan adopted by the Task Force and Media Bureau on January 27 established the methodology to determine the order and schedule of stations transitioning to new channels. If you are not familiar with the plan, you can refer to this fact sheet and glossary of terms. 

This week stations received individual letters with information about their post-auction channel assignment and the Wireless Telecommunications Bureau issued a partial waiver of the prohibited communications rule to permit broadcasters and related entities to discuss their channel reassignments and coordinate their relocation planning. We have also adopted an updated cost catalog to assist relocating broadcasters in estimating their reimbursable relocation costs. These actions, taken together, significantly expand the time and information available to broadcasters to coordinate and plan for the transition prior to their submission of construction permits and reimbursement estimates. Broadcaster construction permits and reimbursement cost estimates from both broadcasters and MVPDs must be filed within 90-days after the Closing and Channel Reassignment Public Notice.

Finally, keeping track of the transition’s progress will be vital. We currently are accepting comments in the record on which stations should submit transition status reports to enable the Commission and the public to monitor progress.

We will have more to report as we get closer to the start of the transition period, so please stay tuned.