On Wednesday, the FCC took additional steps to facilitate the start of next year’s incentive auction with the adoption of an order which clarifies the right of broadcasters to develop back-up channel sharing agreements (CSAs). The order also provides winning reverse auction bidders with additional time to transition to shared broadcast facilities upon completion of the auction.
In 2012, the FCC adopted rules that permit eligible full power and Class A television station licensees to enter into CSAs as one of three options for voluntarily surrendering their licensed broadcast channels as part of the incentive auction process. Wednesday’s order responds to petitions filed by various broadcast groups, which have asked the FCC to clarify that stations participating in the incentive auction as channel sharing partners may enter into contingent or back-up CSAs in the event the original CSA falls through. The order also provides CSA signatories with a three-month extension of the FCC’s original three-month deadline to terminate operations on their pre-auction channels and transition to shared channels covered by the CSA. For such parties, the FCC further confirmed that it will “favorably” consider up to two requests for waiver of the new six-month deadline (which could provide affected broadcasters with up to six additional months to terminate pre-auction operations) “so long as we determine that grant of the extension will not delay the postauction transition.”
However, while the order also offers guidance on “how the CSA exemption to the prohibited communications rule applies with respect to back-up CSAs,” the FCC rejected the request of broadcasters to allow contingent multi-party CSAs that cover multiple markets. As it decreed that multi-party, multiple market CSAs “are not necessary to address the uncertainty created if multiple parties to a particular CSA participate in the auction,” the FCC cautioned that multiple market CSAs “could easily become a vehicle for the exchange of information that could facilitate undesirable strategic bidding behavior, intentionally or not.”