Tuesday will likely be remembered as one of the most important days in FCC history with the official launch of the agency’s first ever incentive auction, which will repurpose 600 MHz spectrum resources surrendered voluntarily by TV broadcasters for wireless broadband use.
The reverse phase of the incentive auction commenced at 6 PM Tuesday—the deadline by which participating broadcasters were required to file their initial bid commitments with the FCC. That data will be used to establish an initial spectrum clearing target and band plan which the FCC expects to issue publicly within a month. (However, owing to the DC Circuit Court’s recent decision to order the provisional auction participation of low power television licensee Latina Broadcasters, FCC officials said publication of the band plan could be delayed by several weeks.)
Shortly after the band plan is released, the FCC will initiate the clock phase of the reverse auction, which will determine the price at which broadcasters will voluntarily relinquish their spectrum usage rights. Officials anticipate the reverse auction clock phase will commence in May and will be followed by the start of the forward auction (i.e., the sale of relinquished broadcast channels to wireless industry bidders) in the June-July timeframe. The auction process is expected to wrap up during the third quarter with estimated total bids ranging from $25 billion to as high as $80 billion, depending upon the amount of recovered spectrum that is sold. (Analysts believe the FCC will recover between 80 MHz and 110 MHz of broadcast spectrum for sale to the wireless industry.) While the exact number and identities of the reverse auction participants remain confidential, the FCC recently issued a list of 104 prospective forward auction participants which include, among others, Verizon Wireless, AT&T, T-Mobile US, DISH Network, Comcast and Sinclair Broadcasting.
Meanwhile, the post-auction repacking process through which broadcasters will transition from surrendered spectrum to new television channels is expected to take years longer. To fulfill Congressional mandate, the FCC and the broadcast industry must complete that process by 2022.
Declaring, “if broadband Internet service is an engine for economic growth, then mobile broadband has been its booster rocket,” FCC Chairman Tom Wheeler told reporters Tuesday that the incentive auction “promises to free up more capacity to meet Americans’ skyrocketing demand for wireless data while preserving the valuable service that broadcast TV stations provide to their communities.” As Meredith Atwell Baker, the president of wireless association CTIA, characterized the start of the incentive auction as “pivotal to making more spectrum available for commercial wireless use,” National Association of Broadcasters executive vice president Dennis Wharton voiced optimism that “the rules and systems the FCC has in place will ensure that this voluntary auction goes off without a hitch.”