The FCC seems to almost daily be issuing orders in the incentive auction proceeding, looking to the filing of applications in December by TV stations ready to give up their spectrum to the FCC so that it can be repackaged and resold to wireless users. In the last two days, the Commission has issued orders further clarifying the channel sharing rules and defining when a wireless user of the newly repackaged spectrum “commences operations” requiring that LPTV stations and TV translators operating on frequencies that would cause interference to the wireless operators to cease operations.
On channel sharing, the FCC ruled on a few issues not addressed in earlier channel sharing orders, clarifying issues raised by these prior orders (see our articles on channel sharing agreements here and here) some of which will affect very few TV stations. For instance, it decided that TV stations which entered into channel sharing agreements in which both parties offer their spectrum for surrender can designate alternative channel sharing partners in the event that both stations to the initial sharing agreement are “frozen” in the incentive auction at the same time – meaning that both will be bought out by the FCC if the auction is a success in the round in which they are frozen. While it is commendable that the FCC is providing stations with this flexibility to designate a backup sharing partner in case their initial partner’s station is also bought out in the auction, it would seem that it is unlikely that many stations will put themselves in a position to take advantage of this provision, as most channel sharing agreements will require one station to retain a channel on which the partners in the agreement can operate post-auction. It would seem as if it will be the rare case where all parties to a channel sharing agreement will be subject to being bought out by the FCC at the same time. Probably much more important is the decision of the FCC to extend the dates by which stations that agree to channel sharing agreements must actually implement those agreements after the auction has concluded.
In prior orders, the FCC stated that stations would have to implement their channel sharing agreements within 3 months of the close of the auction and their receiving their payment of the auction price to which they agreed – a very short period to accomplish what could very well be a complex technical task of acquiring and installing equipment to implement the channel sharing agreement, and educating the audience of the station that is moving off their current channel as to where they will be operating after the sharing agreement is implemented. The FCC decided that a 6 month period was more reasonable, with two additional 3 month extensions being available – the first to be favorably viewed if a reason for the extension can be provided, and the second likely to be granted unless the grant would delay the spectrum transition. For stations looking to stay in business and to transition their listeners to new over-the-air channels, this extra time could be quite important.
A second decision is important to TV translators and LPTV stations, which are not protected in the auction process (the FCC has suggested that there would be some post-auction window in which these stations could apply to move to new channels if their channels are taken as a result of the decrease in the size of the TV band, or by interference caused by repacked TV stations, but no final rules have yet been adopted, see this article on the proposed post-auction transition process for LPTV and TV translators). The FCC decided that a wireless operator commences operations (meaning that any LPTV station or TV translator that interferes with such station must cease operations) when the wireless operator “conducts site commissioning tests.” According to the FCC, the wireless operator needs to buy and test equipment before it fully starts operations, and once it starts the process through testing on the new spectrum, the secondary broadcast operators need to cease operations. The site commissioning tests will entail the purchase and installation of permanent base station equipment and antennas – and the spectrum needs to be cleared for this equipment to be tested and put into operation. However, broadcast secondary services do not need to vacate the spectrum throughout the area in which the wireless operator has authority to operate – but instead only in areas in which actual interference is likely to occur.
It is also expected that the FCC will soon come out with an order further defining the interference allowances between television stations and wireless operators after the auction. Look for that order soon, and read the orders described above carefully to see how they may impact your incentive auction planning.