The incentive auction by which the FCC will try to get some television stations to surrender their spectrum so that it can be sold to wireless broadband users is moving forward. A vote on the general rules to implement the auction and to repack the television band are expected to be held at the Commission’s May 15 meeting. We are now beginning to get a look at what the FCC is thinking, based on a post on the FCC’s blog on Friday by Chairman Wheeler, and a fact sheet released later that day (which does not appear to be available on the FCC website). While not terribly detailed, the documents at least show that the Commission is planning a quick transition – looking for the repacking to be complete within 39 months from the end of the incentive auction – and perhaps sooner for some stations.
The blog post again reiterates the Chairman’s belief that the Incentive Auction process poses:
a once-in-a-lifetime opportunity to expand the benefits of mobile wireless coverage and competition to consumers across the Nation – particularly consumers in rural areas – offering more choices of wireless providers, lower prices, and higher quality mobile services
The post also suggests that TV stations, by agreeing to share television spectrum with another station in their market so that they can give up a channel to the auction have another “once in a lifetime” opportunity to get money from the government to pursue new business opportunities in new technologies, while still providing some broadcast service. This is much the same message that the Chairman conveyed at the NAB Convention in Las Vegas a few weeks ago. But for stations that do not take him up on his invitation to sell their spectrum, what is likely to happen?
The fact sheet released last Friday talks about giving the remaining stations a timetable to change channels if required by the repacking plan. That plan will move all TV stations into a smaller part of what is now the TV band so that the wireless companies bidding on the repurchased spectrum will have the same blocks of spectrum across the country, so that equipment can be standardized on a nationwide plan. While many publications have quoted the 39 month figure as the time that stations will have to move to their new channels following the incentive auction and publication of a new TV table of allotments (which some statements from the Commission have suggested will be generated dynamically as the auction progresses), what the Commission in fact says is that the time frame for moving will be different in each case, and that the maximum amount of time to move will be 39 months. Seemingly, some stations will be ordered to move in a lesser timeframe. If a station cannot move in that period, it will be forced to go silent until it can complete its construction of its new facilities.
In the repacking, stations will be protected to their contours as of February 22, 2012 when Congress passed the law governing the auctions. The Commission will use OET 69 to compute the new service areas of stations, but also notes that this standard will be used with updated computer software and updated information. Exactly what that means will presumably be stated in the final order.
Stations surrendering their spectrum as part of the auction will disappear much faster. They will have 3 months from the end of the auction to terminate their operations.
LPTV stations and TV translators which are not protected in the auction and subsequent repacking of the TV spectrum don’t have many answers yet as to what will happen to them. The Commission in May will apparently give them a timeline to cease operations as new wireless or broadcast users take their channels. The Commission does promise to issue start a further proceeding to address what happens to them next, but does not propose a timetable yet for any action in that further proceeding.
The auction itself will have several rounds. But, according to the fact sheet, the earliest rounds will offer the most money to broadcasters to abandon their spectrum. With each succeeding round, the price will go down as stations effectively compete against each other for the right to be bought out.
Finally, the Commission appears to acknowledge that in some markets, there may not be enough TV stations that decide to turn in their channels. The Commission states that its band plan for the newly freed wireless spectrum:
accommodates variation in the amount of spectrum recovered from broadcasters in different geographic areas in order to prevent the “least common denominator market” from limiting the quantity of spectrum we can offer generally across the nation
Details of all of these decisions and more will no doubt start to leak out in the next few weeks before the FCC meeting. And, soon after the May 15 meeting, we will know many more details. TV stations should be closely monitoring the action in the coming weeks to see what is in store for their businesses in the coming years.