Yesterday was a busy day for the TV incentive auction, where the FCC is attempting to clear portions of the TV band by paying TV stations to surrender their licenses, and repurpose the cleared spectrum for wireless broadband users. As we wrote earlier this week, Stage 3 of the Forward Auction started yesterday, where wireless companies would have had to come up with over $42 billion dollars to meet the costs of clearing the TV band. The Forward Auction closed after one round of bidding with bids totaling $19,676,240,520. Thus, we are on to Stage 4, with the FCC expected to attempt to clear 84 MHz of TV spectrum instead of the 108 MHz target in the just concluded Stage 3. The Reverse Auction in Stage 4 is expected to commence on Tuesday, December 13, but look for confirmation later this week.
At the same time, there are two other bits of auction related news – both dealing with LPTV and Class A stations. In the first, the US Court of Appeals rejected the appeal of Walker Broadcasting Company, a company that had an authorization for a Class A TV station, but had not finished construction and licensing of that station in time for inclusion in the auction. Had it been included in the auction, the company could have attempted to sell its license in the auction and, if its station was not one purchased in the auction for surrender, the FCC would have had to find a new channel on which the station could operate after the auction. Instead, the Court upheld the FCC’s ruling that the station had not met the required construction deadlines, and therefore did not qualify to be included in the auction or for post-auction protection.
On the question of what happens to LPTV stations after the auction, the Federal government’s Government Accountability Office (GAO) completed a study (here) on the impact of the auction on LPTV stations. The study does not do any independent engineering analysis to attempt to quantify that impact. Instead, it merely reports on FCC actions and on interviews that it conducted with various participants in the auction process, including LPTV licensees who are not auction participants and are unprotected in the post-auction repacking. Unsurprisingly, the study reports that LPTV advocates are concerned that many of their number will be displaced in any post-auction repacking, and are concerned about the impact of a proposal to set aside an additional vacant TV channel post-auction for unlicensed wireless users. LPTV advocates would like to be eligible for inclusion among the TV stations which get to share in the $1.75 billion fund to reimburse TV stations for expenses incurred in the repacking that occurs after the auction (i.e. when some stations need to change channels after the auction to fit into a smaller TV band). The GAO reports on the FCC’s position that Congress did not require the protection of LPTV stations in the auction or their reimbursement for costs incurred in any repacking. The report also highlights Google’s claims that the impact on post-auction channel availability for LPTV stations would be minimal, and on the contrary position taken by the NAB. In effect, this study is a good primer on the positions of the various parties on the auction’s impact on LPTV stations, but really covers little new ground.
So now all eyes will be on the next Stage of the auction, which very well could run into 2017, to see what is next for the incentive auction.