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The Incentive Auction: Helping Broadcasters Make Informed Decisions

by: Tom Wheeler, FCC Chairman

June 25, 2014

Last month, the FCC made history by adopting rules for the first-ever Incentive Auction. We moved an innovative approach –marrying the economics of wireless providers’ demand for spectrum with the economics of television broadcasters, the current holders of spectrum—one huge step from concept to reality.  

Robust participation by broadcasters will be critical to the success of the auction. The auction is a risk-free, once-in-a-lifetime opportunity for broadcasters, but the decision of whether or not to participate is completely voluntary and confidential.  We recognize that spectrum auctions are new for most broadcasters, and that we owe them additional information before the Incentive Auction.  As anyone who’s made a major sale or purchase knows, having more information leads to better decisions.

Before I joined the Commission I was an investor in technology companies.  In that job, I needed to know as much information about a company as possible in order to decide if I should financially back it. I called that research the “Book.”  As FCC Chairman, I’m committed to ensuring broadcasters have all the information they need to make an informed business decision about whether and how to participate in the Incentive Auction.

That process continues today.

First, we’re providing an updated estimated timeline of Commission actions leading up to and after the auction.  Importantly, this timeline details steps broadcasters will need to take to participate in the auction. Read our timeline.

Second, this summer, we will distribute informational material to help inform broadcaster decision-making.  This material will provide an estimate of the amount of money broadcasters could receive for voluntarily relinquishing some or all of their spectrum rights in the auction.  It will also contain additional information about why broadcasters should consider participating in the reverse auction, and the options that the auction will present to them.  Following release of this material, senior FCC staff will meet with broadcasters across the country on a voluntary and confidential basis to answer questions and provide additional details.

Third, we will conduct webinars to explain the rules for the Incentive Auction. The first of these sessions, to be held this week in coordination with the state broadcaster associations, will describe the no risk, high reward opportunity for broadcasters to voluntarily participate in this incentive auction.  It will cover who is eligible to bid, how the reverse and forward auctions will work and when winning bidders will get paid.  It will also address post-auction issues, including the transition to new channels, the timing for relocation, and reimbursement of relocation costs.  We will conduct future webinars as our auction planning process progresses and the final details of the auction are spelled out in the Auction Comment and Procedures Public Notices.  

Fourth, as we near the Incentive Auction, Commission experts will hold additional webinars and travel across the country to demonstrate to interested broadcasters how to participate, including providing hands-on bidding demonstrations.

We have come a long way in the almost two and a half years since Congress directed the FCC to hold the Incentive Auction.  With the policy foundation for the auction now in place, it is time to ensure that everyone has all of the information they need to ensure a successful auction.

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