The Federal Communications Commission’s ambitious plan to auction off 600 MHz spectrum licenses returned by broadcasters has been pushed until at least 2016. The FCC was looking to hold the auction proceeding in mid-2015.
In a blog post, Gary Epstein, chair of the FCC’s Incentive Auction Task Force, cited the complexity of the proceedings as well as a recent court challenge brought about by the National Broadcasters Association, which claimed the FCC in its 600 MHz incentive auction rulemaking changed the “methodology used to predict local television coverage areas and population served, which could result in significant loss of viewership of broadcast TV stations after the FCC ‘repacks’ TV stations into a shrunken TV band.”
Epstein explained that the court earlier this week issued a briefing schedule that calls for final briefs to not be due until late January 2015, with oral arguments not expected until a later date. That timeframe likely would push a final court decision beyond the mid-2015 period.
“We are confident we will prevail in court, but given the reality of that schedule, the complexity of designing and implementing the auction, and the need for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the auction in the fall of 2015 and starting the auction in early 2016,” Epstein said in a statement. “Despite this brief delay, we remain focused on the path to successfully implementing the incentive auction.”
The FCC has aggressively been moving forward on the incentive auction proceedings, including the recent rollout of a notice of proposed rulemaking connected to bidding plans, and the release of an information packet targeted at television broadcasters. FCC Chairman Tom Wheeler has noted that the greatest challenge for the planned 600 MHz incentive auction process will be in convincing broadcasters to participate in the “reverse” auction process, noting at a recent speech that the opportunity was a once-in-a-lifetime chance to garner financial compensation for underutilized airwaves.
“Seldom have I seen such a risk-free opportunity as that represented to broadcasters by the incentive auction, including the opportunity to continue their existing business on shared spectrum and take home a check for the spectrum they vacate,” Wheeler said in March at an event at the Brookings Institute in Washington, D.C.
The FCC has estimated that wireless operators will be willing to pay up to $38 billion for spectrum allocation. The court has agreed to expedite the case, but a ruling is not expected until early 2015.
Wheeler reiterated his focus on the proceedings at the recent Competitive Carriers Association and CTIA trade shows where he encouraged mobile operators to participate in the proceedings. CCA and CTIA both came out with supportive comments on the most recent delay.
“The FCC’s decision to delay the time frame for the incentive auction is not particularly surprising, and one could say a delay was actually expected,” said CCA President and CEO Steve Berry. “The incentive auction is still on track, even with the slight delay. There is an old saying that, ‘If you want it bad, you will get it bad.’ I know our members want it right, and the FCC is just trying to ‘get it right.’ I have been impressed with the quality and progress of the work of the FCC team so far. This is a reasonable, if not expected, short delay for a very complicated auction and will allow time for the industry to plan for the acquisition and integration of the most valuable low-band spectrum made available to the wireless industry in over a decade. Everyone remains interested in the 600MHz spectrum auction and every carrier needs low band spectrum. CCA will continue to monitor the progress closely.”
“While any delay in spectrum auctions is unfortunate, we appreciate the thoughtful focus the FCC has brought to this complex auction to ensure it is conducted properly to the benefit of all Americans,” said Scott Bergmann, VP of regulatory affairs at CTIA. “Today’s action underscores the need to resolve the pending litigation over the FCC’s rules expeditiously. When the auction is held, mobile companies will have their checkbooks ready to participate in this critical auction that will be key to our nation’s wireless future.”
Sprint, which is set to sit out the upcoming AWS-3 auction presumably in order to focus its efforts on the 600 MHz proceedings, also supported the move.
“Given the circumstances, the FCC made a wise choice to revise the start date of the 600 MHz incentive auction,” said Jeff Silva, manager of corporate communications at Sprint. “While the auction schedule has changed, the policy focus has not. To that end, we look forward to continuing our dialogue with federal regulators to help develop auction rules that best promote vibrant, sustainable competition in the wireless space.”
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