A three-judge panel of the D.C. Circuit Court of Appeals cleared a major obstacle to the start of next year’s incentive auction by issuing a unanimous ruling last Friday rejecting appeals of the FCC’s incentive auction order. Those appeals were filed by the National Association of Broadcasters (NAB) and Sinclair Broadcasting.
Adopted by a 3-2 margin in May 2014, the incentive auction order sets forth the framework by which the FCC will conduct “reverse” auctions of 600 MHz band channels that will be surrendered voluntarily by television broadcasters in exchange for a portion of the proceeds of “forward” auctions of those channels to the wireless industry. In its petition for review filed last August, the NAB took issue with the FCC’s decision in the incentive auction order to adopt the new “TVStudy” software to predict coverage areas of television stations that opt against surrendering their spectrum to wireless carriers. Charging that TVStudy constitutes a major departure from methodologies used previously by the FCC to implement TV coverage and interference criteria pursuant to OET Bulletin No. 69, NAB warned the court that “many broadcast licensees . . . will lose coverage area and population served during the auction’s repacking and assignment process.” As it echoed the NAB’s complaints regarding TVStudy, Sinclair also targeted the FCC’s decision to implement a 39-month deadline from the conclusion of the incentive auction for broadcasters to move to repacked channels or “go dark.”
Concluding, however, that the FCC’s rules are reasonable, the court sided with the FCC’s claim that “Spectrum Act” provisions of the 2012 Middle Class Tax Relief and Job Creation Act mandating incentive auctions “[do] not preclude the Commission’s decision to use the improved TVStudy software and more accurate and current data when determining a broadcast licensee’s coverage area and population served.” As it agreed that the TV Study software is “better adapted to handle the kinds of computations the Commission will need to conduct in the reverse auction and repacking process,” the appellate panel termed it “self-evident that the accuracy of the Commission’s determinations would be improved by its use of more recent population data, more precise terrain calculations, and more exact technical information.” The court further maintained that the FCC exercised “reasonable efforts” to preserve the served population of affected broadcast stations as it declared that the agency “reasonably balanced the Spectrum Act’s competing imperatives” in implementing the 39-month repacking deadline.
Proclaiming that the D.C. Circuit action “provides the Commission and all stakeholders with the certainty necessary to proceed apace toward a successful auction in the first quarter of next year,” FCC Chairman Tom Wheeler told reporters, “we are gratified that the court agrees with the Commission’s balanced, market-based approach.”