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Incentive Auctions: The Concept Ratified, and the Work Begins

by: Bill Lake, Chief, Media Bureau

March 27, 2012 - 02:53 PM

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Congress ratified a historic policy innovation by authorizing the Commission to conduct incentive auctions of spectrum.  Now the work begins to make that innovation a reality.  The new law codifies the vision of an incentive auction as offering new options to broadcasters.

  • It codifies the voluntary nature of contributing spectrum.
  • It authorizes the Commission to offer a broadcaster at least three ways to contribute spectrum, giving an individual broadcaster not only an exit route previously unavailable but also multiple ways to receive auction proceeds to strengthen ongoing broadcast operations:
    • A multi-station owner can contribute one or more licenses and use the proceeds to strengthen its other operations; and
    •  A broadcaster can receive auction proceeds for contributing spectrum and keep even the affected station on the air, through channel sharing or moving from U to V.
  • Congress expressly preserved must carry rights for stations that choose to channel share. 
  • Congress provided a $1.75 billion repacking fund to pay costs of channel changes by broadcasters who don’t participate.                                                                                                               

But much about the incentive auction remains to be decided. Our phones are already ringing with questions about how broadcasters can set their reserve prices, how the reverse auction will work, and the mechanics of channel sharing. There are other subjects that reflect a growing interest and serious consideration by broadcasters of the opportunities presented by the auction.

It was a year ago this month that Rebecca Hanson and I launched a series of webinars about the business options that incentive auctions would offer to the broadcast industry. The idea was to give broadcasters a direct line into the FCC to get straight answers, bypassing the rhetoric and misinformation that often plague innovative ideas, such as this one. Those webinars were well-received, and broadcasters have told us they cleared up some fundamental questions about incentive auctions.  We think that similar outreach can be useful as we tackle the tasks before us – we want to provide an avenue for exchanging thoughts about how to approach implementation issues and eliciting broadcasters’ thoughts about pitfalls to avoid.

We’ve already kicked off this post-enactment outreach, by speaking to the Association of Public Television Stations’ Public Media Summit and the National Association of Broadcasters’ State Leadership Conference over the last month.  We followed up with a webinar for public broadcasters last week.  As other forums appear useful, we’ll use them.  The questions we are receiving from interested broadcasters will help us to identify the points to cover in these exchanges.  By working together with broadcasters, we can make the incentive auction the effective policy innovation it has the potential to be. 

Updated: April 11, 2012 - 05:07 PM
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