What’s Next For FCC’s Spectrum Auction?

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By Adam R Jacobson
RBR + TVBR


The Forward Auction is now over for the FCC.

With auction proceeds of $19,632,506,746, the Commission wrapped up the Forward Auction on Friday afternoon following Round 58.

Now, it’s on to the Assignment Phase, which could begin as soon as Feb. 23, based on the assessment of spectrum observers who spoke with RBR + TVBR.

Broadcasters are saying goodbye to 84 MHz of spectrum, and once the $12,011,676,822 in net proceeds are sorted out, they will collectively receive about $10 billion. Some 70 MHz of licensed spectrum is being given to wireless services providers.

The Federal government will pocket some $7 billion from the auction.

Following the Assignment Phase, which could stretch into mid-March, the 39-week countdown clock starts for stations that will need to relocate as part of a “repack” process.

As noted by the FCC, the “final stage rule” was satisfied in Round 58, and there is no excess demand for any products.

Forward auction bidders that have processed demand at the conclusion of the clock phase are winning bidders and will have the opportunity to bid for frequency-specific licenses in the assignment phase.

Participation in the assignment phase is voluntary. All clock phase winners in a PEA will be assigned contiguous frequency blocks regardless of whether they bid in the assignment phase.

ASSIGNMENT PHASE DETAILS FORTHCOMING

The FCC will release a public notice within the next few business days announcing details about the assignment phase, the date and time when bidding in the assignment phase will begin, and the availability of additional educational materials.

The public notice will also provide information about a preview period during which bidders can download their bidding options, and a practice auction and mock auction that will provide bidders an opportunity to get familiar with bidding in the assignment phase, as previously reported by RBR + TVBR.

This public notice will be mailed overnight to the contact representative for each winning bidder.

Additionally, the public notice will be posted under the “Documents” tab of the Auction 1002 website.

The educational materials, which consist of an assignment phase tutorial and bidding system user guide, will be available under the “Education” tab of the website.

“Each bidder should review the public notice and educational materials prior to the start of the assignment phase,” the Commission said. “In the meantime, we suggest that bidders review the Assignment Phase section of the following documents, which are available under the ‘Documents’ tab of the Auction 1002 website.”

The Auction Bidder Line and access to the Auction System for Stage 4 will be available until 5 p.m. Eastern on Tuesday (2/14).

All forward auction applicants remain subject to the Commission’s rules prohibiting certain communications in connection with FCC auctions until either the completion of the incentive auction as announced by the Commission by public notice, with respect to communications with broadcasters; or until the winning bid down payment deadlines, with respect to other forward auction applicants and related parties.

All forward auction applicants remain subject to the prohibition regardless of developments during the auction process and regardless of whether they qualified to bid or became winning bidders.

‘MAJOR MILESTONE’ MET

Ajit Pai
FCC Chairman Ajit Pai

With bidding in the clock phase of the incentive auction concluded and the spectrum auction now set to move on to the assignment phase, in which winning forward auction bidders can bid for specific frequency blocks, FCC Chairman Ajit Pai said the Commission “reached a major milestone in the world’s first incentive auction.”

He congratulated the winners in both the reverse and forward auctions, and explained that the release of 84 MHz of spectrum into the broadband marketplace “will improve wireless coverage across the country, and will play a particularly important role in deploying mobile broadband services in rural areas.”

Pai thanked members of Congress who enabled the Commission to put “a novel auction theory into practice” through the passage of the Spectrum Act of 2012.

He also called on the Commission to ensure “uninterrupted access to over-the-air television” and a timely clearing of the new wireless band.

“Delivering on the promise of this auction will require a smooth and orderly post-auction transition,” Pai said. “We will devote a great deal of attention to those tasks over the coming months, and it will be a top priority of mine as Chairman of this agency.”

HOW DID FCC RULES IMPACT AUCTION RESULTS?

That’s actually what Republican FCC Commissoner Michael O’Rielly would like to know.

In a statement released late Friday, O’Rielly said, “While I am pleased that the forward auction has closed and we don’t have a failed auction on our hands, significant review is necessary to understand how the FCC rules and auction design impacted the results.  Although Congress provided a strong statute to utilize market forces to ensure spectrum is put to its most efficient use, including for necessary wireless voice and data licenses, the previous majority’s implementation appears to have been based on some assumptions that were far off the mark.  Additionally, there is a lot of work ahead to minimize disruption for non-participating broadcasters while ensuring these spectrum blocks are cleared expeditiously.”


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Adam R Jacobson is a veteran radio industry journalist and advertising industry analyst with general, multicultural and Hispanic market expertise. From 1996 to 2006 he served as an editor at Radio & Records.