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October 27, 2014

FCC Delays TV Spectrum Auction by Almost a Year

The drama surrounding an incentive auction of unused analog television airwaves—the so-called ‘digital dividend’ left over from the move to digital TV—has been ratcheted up a few notches. The Federal Communications Commission said that the upcoming sale of local broadcasters’ unused spectrum to mobile carriers has been delayed to early 2016.

FCC Chairman Tom Wheeler had previously said that the auction would take place in the middle of next year, but court challenges by broadcasters to the auction rules has “introduced uncertainty,” according to FCC auction chief Gary Epstein.

As wireless operators continue to feel the crunch of a spectrum shortage in the face of ever more mobile broadband congestion and usage, and demand from previously unconnected areas in rural parts of the nation, the unused local TV spectrum represents vast swaths of prime beachfront spectrum—the kind that can penetrate indoors and be very useful for expanding 4G coverage.

The FCC has decided on a double-sided auction, which would allow broadcasters to voluntarily put up their airwaves for bidding on by the FCC, guaranteeing them compensation for the assets. Then, in a forward auction, the spectrum would be auctioned off to wireless operators.

But broadcasters say that the FCC isn’t ensuring the preservation of local coverage areas for TV stations that don’t surrender airwaves to the process. The lawsuit was brought by the heaby hitters: Sinclair Broadcast Group Inc., Gannett Co., CBS Corp., Comcast Corp.’s NBC Universal, ABC owner Walt Disney Co. and 21st Century Fox.

In many ways this is simply a question of timing: final briefs in the case are not due until late January 2015; oral arguments will follow at a later date yet to be determined, with a decision not likely until mid-2015. 

“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. “Despite this brief delay, we remain focused on the path to successfully implementing the incentive auction.”

But broadcasters say that the FCC is overreacting. “We reject suggestions that our narrowly focused lawsuit is cause for delay,” said Dennis Wharton, spokesman for the National Association of Broadcasters. “We look forward to a speedy resolution of our legal challenge and a successful auction that preserves access to free and local TV.”

For their part, wireless operators are nonplussed at the development. “Any delay in spectrum auctions is unfortunate,” Scott Bergmann, vice president of regulatory affairs at CTIA-The Wireless Association. “When the auction is held, mobile companies will have their checkbooks ready.”




Edited by Stefania Viscusi


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