The FCC yesterday released a Public Notice dealing with the upcoming March 29 commitment deadline for TV broadcasters who filed their applications back in January indicating a possible intent to participate in the incentive auction to surrender their TV channel so that the FCC can use it to repack the TV band to free spectrum to sell to wireless broadband users. In the Public Notice, the Commission made clear that station’s actual commitments to accept the FCC’s initial offers to give up their spectrum (either by abandoning their channel entirely by going out of business or sharing with a channel with another broadcaster, or by moving from a UHF to a VHF channel) will need to be filed between 10AM on March 28 and 6 PM (Eastern Time) on March 29. The January applications said that a broadcaster might be interested in giving up its current channel - filings made before the upcoming March 29 deadline make that commitment binding.
Yesterday’s notice announced that the FCC will be making available its “Initial Commitment Module” of the Incentive Auction software system at 10 AM on March 24 during a “preview period” for review by TV broadcasters. That is the piece of software on which the broadcaster makes its commitment to participate in the auction at the FCC’s initial offering price. Starting on Monday, February 29, the FCC will be making available an online tutorial to allow broadcasters to familiarize themselves with how the software will work. In addition, today the FCC announced that it will hold a workshop for broadcasters on March 11, starting at 10 AM Eastern Time, providing information on how to make these commitments. These actions come while the FCC battles with some LPTV stations claiming that they should have been considered Class A TV stations and included in the auction - a legal battle that seems to be the last potential legal speedbump that could in any way derail the upcoming auction.
In that battle, the FCC has been challenged by four licensees of stations that were Class A eligible LPTV stations operating on channels that were outside the core TV band that remained after the original DTV transition (i.e. these stations operated on a channel between 52 and 69, channels that were no longer part of the TV band after the DTV transition). The FCC found that, as these stations did not have a construction permit or license for an in-core operation by the deadline for qualification for the auction (February 22, 2012), they were not qualified to participate in the auction or to be protected in any post-auction repacking of the TV spectrum. In arguments as to why they should be included, those stations pointed to a fifth station that they claimed was in the same situation that they were, but which nevertheless was included in the auction. This, they claimed, supported their claims that the FCC arbitrarily left them out of the auction planning.
Rather than admitting these four stations into the auction, the FCC instead decided earlier this month that the fifth station, which had been included as a protected Class A station in all the auction planning released by the FCC, instead should be treated in the same manner as the original four, and removed it from auction consideration. That prompted that fifth station (owned by Latina Broadcasters of Daytona Beach), suddenly finding that it was outside the auction that it had long thought that it would be part of, to appeal the FCC’s exclusion order to the US Court of Appeals. In addition, Latina asked that the FCC stay its exclusion from the auction so that it could participate in the auction while its appeal was being heard, or alternatively to stay the entire auction until the appeal is considered. A “stay” would put the auction on hold while the court case is being considered. Latina feared that, if the auction went forward without it, it would be without a remedy even if the Court found its appeal to have merit, as the auction would have already concluded by the time its appeal was resolved.
The FCC yesterday denied that stay request, finding among other things that, in the opinion of the FCC, Latina was unlikely to prevail on the merits of its court case; that the failure to grant a stay would not subject it to “irreparable harm” as, even if it could not participate in the auction, if its appeal was successful it would still have its station; and that the injury to other parties and the FCC’s public interest goal of rapidly making new spectrum available to wireless companies outweighed any potential benefit that would arise from a grant of the stay. See our article here from a different proceeding where we discuss the legal elements that need to be shown before a stay is granted.
So what is next? We assume that Latina will ask the Court for a stay. At the same time, the other four applicants whose applications were originally rejected have briefs in their cases due this week, though the briefing schedule has reply briefs and arguments after the auction has started, meaning that their quest to participate in the auction won’t be decided until well after the auction has begun - and probably not until after the actual reverse auction bidding has been completed. Will they too ask for a stay of the auction? Even if all five parties request a stay, as our past articles on stay requests make clear, such stays are granted only in extraordinary circumstances. We’ll have to see if this is one of those extraordinary circumstances - one which appears to be the last legal hurdle before the commencement of the auction under the FCC’s current schedule with those Initial Bid Commitments in late March.
Updated, 2/26/2016, 12:30 PM Eastern to include information about the FCC workshop on procedures for making the initial commitment.