FCC conducts incentive-auction workshop

FCC officials last week outlined various options that are being considered in an effort to clear UHF TV broadcaster spectrum to be auctioned in 2014. The guidance was offered during a workshop on a proposed incentive auction, which is expected to generate a significant amount of the revenue needed to fund a nationwide LTE network for public safety.

Television broadcasters hold licenses to some of the most valuable spectrum in the U.S., with each TV channel utilizing a 6 MHz block. As part of the digital transition from analog TV signals to digital signals that was completed in 2009, enough spectrum was cleared to allow the FCC to auction frequencies in the 700 MHz band.

With the increasing popularity of cable, satellite and Internet-based TV services, the number of television viewers utilizing over-the-air TV has continued to dwindle to less than 20% nationwide, and even smaller percentages in certain markets, according to some estimates. Under the FCC's plan, broadcasters would have the option to stop over-the-air broadcasting — thereby saving on the cost of maintaining their TV towers — and by doing so would receive a portion of the proceeds associated with the auctioning of the spectrum that is cleared.

But if they chose to continue their operations, broadcasters also could have other options, according to Brett Tarnutzer, chief data officer for the FCC's wireless telecommunications bureau, who made a presentation during the workshop, which was webcast and has been archived. Broadcasters could share another station's channel, they could opt to move to a channel in a lower band, or they could choose to voluntarily accept more interference, he said.

FCC Commissioner Mignon Clyburn stressed during her opening remarks of the webcast that the incentive auction is designed to be "voluntary" for broadcasters, in terms of what option they choose. However, the repacking of spectrum — moving broadcasters to a different channel in an effort to clear as much spectrum as possible — effectively would be an involuntary process, according to Gary Epstein, chairman of the FCC's incentive-auction task force.

Epstein said that there will be two parts of the incentive auction: a reverse auction that will determine the amount broadcasters will be paid to relinquish UHF spectrum; and a forward auction that will determine the licensees — expected to be commercial wireless carriers — for the newly cleared spectrum. Tarnutzer said there has been considerable discussion whether the reverse auction and the forward auction should be conducted sequentially or simultaneously.

Ruth Milkman, chief of the FCC's wireless telecommunications bureau, said that the lead proposal calls for uplink spectrum to begin at Channel 51 (698 MHz) and expand to lower channels, while the downlink spectrum to be auctioned would begin at Channel 36 (608 MHz) and expand to lower channels.

On Sept. 28, the FCC passed a notice of proposed rulemaking regarding incentive auctions, with comments due on Dec. 21 and reply comments due on Feb. 19, 2014. The notice seeks input on various options the commission should consider when making final rules, which are expected to be approved next year. The FCC hopes to complete the incentive auction in 2014, a timetable that Epstein described as "aggressive but achievable."

Mobile wireless consultant Andrew Seybold said that he is skeptical that broadcasters will want to relinquish their spectrum for a one-time payday, especially with multicast, mobile-TV and broadband-data business models potentially creating new revenue opportunities.

"I don't believe for a minute that the reverse auctions are going to clear that much spectrum," Seybold said during an interview with Urgent Communications.