On Tuesday, the FCC issued a public notice providing broadcast and wireless industry licensees with advice on how the FCC will apply its anti-collusion rules to upcoming incentive auctions of broadcast television spectrum to the wireless industry. The FCC offered guidance specifically on prohibited communications that could convey information on an applicant’s bids or bidding strategies. Acknowledging concerns raised by various parties over the extensive “quiet period” during which certain communications among prospective incentive auction participants are prohibited, the public notice clarifies certain aspects of the FCC’s competitive bidding rules as they pertain to this first-of-a-kind auction event. While emphasizing that FCC rules prohibit communications “regarding the specific nature of a licensee’s participation” after the quiet period commences, the agency specified that communications indicating that a licensee has or has not filed an application to participate in the incentive auction are allowed as “the mere fact that an application has been filed does not require the applicant to bid, nor does it reveal an applicant’s specific bids or bidding strategies.”
Despite this clarification, the FCC cautioned licensees to “take care when communicating about their applicant status or non-applicant status that their communications do not . . . appear to convey information about specific bids or bidding strategies,” warning: “a communication that a broadcaster ‘is not bidding’ in the auction, in contrast to ‘is not an applicant’ could constitute an apparent violation of the rule.” The FCC also said it would waive rules that prohibit the assignment or transfer of control of a broadcast license holder that intends to participate in the reverse auction, provided that an application for assignment or transfer of control (1) has been accepted for filing by the FCC before the reverse auction application deadline and (2) certifies that the post-consummation licensee agrees “to be bound by the original applicant’s actions” in the incentive auction.
Meanwhile, with respect to prospective wireless industry bidders, the FCC proclaimed that “agreements, arrangements, or understandings not subject to the prohibition on joint bidding arrangements . . . are not subject to the prohibition on communications.” The FCC further specified that forward auction applicants may negotiate roaming, spectrum leasing, and other agreements that pertain to the “operational aspects of providing a mobile service,” provided such communications “do not relate both to the licenses being auctioned and to bids or bidding strategies or post-auction market structure.” Discussions between broadcasters and wireless carriers on the relocation of broadcasters out of channel 51, and broad industry discussions on technical standards for spectrum bands to be auctioned, are also permitted “so long as the discussions do not communicate ‘an incentive auction applicant’s bids or bidding strategies.’” Stressing that his organization is “working through the substance of the notice,” National Association of Broadcasters executive vice president Dennis Wharton said, “we . . . greatly appreciate the FCC staff’s willingness to tackle the concerns we raised and address them in a timely fashion.”