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FCC Initiates Incentive Auction Process

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Released: September 28, 2012

Federal Communications Commission

News Media Information 202 / 418-0500

445 12th Street, S.W.


Washington, D. C. 20554

This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action.
See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).



September 28, 2012
Tammy Sun (202) 418-0505





Market-based policy innovation will help alleviate growing ‘spectrum crunch’ while providing unique

financial opportunities and other benefits to broadcasters; Auction planned for 2014
(Washington, D.C.) – The Federal Communications Commission today voted to officially launch the
incentive auction process, making the United States the first nation in the world to implement this major
policy innovation, which aims to repurpose broadcast television spectrum for mobile broadband use. The
concept was first introduced in the National Broadband Plan as part of the Commission’s multi-pronged
strategy to meet skyrocketing demand for mobile Internet in the United States, and became the foundation
for legislation that was signed into law in February 2012. As mobile device adoption continues to grow
around the world, this incentive auction will be a model for many countries facing similar spectrum
Spectrum is our nation’s ‘invisible infrastructure,’ supporting mobile devices like smartphones and tablets
that require much more spectrum than traditional cell phones to support the rapidly growing demands of
consumers, businesses and entrepreneurs who increasingly rely on mobile Internet to communicate and
innovate. For instance, today’s smartphones use 35 times more spectrum than traditional cell phones, and
tablets use 121 times as much spectrum. This consumer demand puts a tremendous strain on the nation’s
invisible infrastructure in ways that require innovative new approaches to spectrum policy in order to spur
continued economic growth, and help maintain America’s global leadership in mobile.
Incentive auctions are one way to satisfy this consumer demand. These auctions are a market-based tool
to repurpose broadcast television spectrum for mobile broadband by offering unique financial
opportunities to broadcasters, including a portion of the auction proceeds for participants. The
Commission expects a healthy and vibrant broadcasting industry to thrive after the auction, with
expanded business opportunities for multi-platform growth in a more robust mobile ecosystem.
In addition, this incentive auction is expected to deliver enormous benefits for the American people and
the U.S. economy. The mobile apps economy barely existed in 2009 but today, it supports nearly
500,000 jobs. The wireless industry contributes about $150 billion annually to U.S. GDP – and that

number is growing. Moreover, an advanced mobile infrastructure supports innovators in verticals across
the economy, including education, healthcare and public safety. This proceeding also offers the
possibility of unique benefits to entrepreneurs and innovators of unlicensed spectrum for game-changing
applications like next-generation Wi-Fi. Additionally, as Congress directed, certain proceeds from the
incentive auction will be deposited in the Public Safety Trust Fund to fund a national first responder
network, state and local public safety grants, public safety research, and national deficit reduction.
The Commission today voted to approve the Incentive Auction Notice of Proposed Rule-Making (formally
called “Expanding the Economic and Innovation Opportunities of Spectrum Through Incentive Auctions),
and seeks public comment from all stakeholders as well as the public.
In addition, please find a brief summary of the major outlines of the incentive auction NPRM, below:
Congress directed that the incentive auction of broadcast television spectrum have three major pieces:
(1) a “reverse auction” in which broadcast television licensees submit bids to voluntarily relinquish
spectrum usage rights in exchange for payments; (2) a reorganization or “repacking” of the broadcast
television bands in order to free up a portion of the ultra-high frequency (UHF) band for other uses; and
(3) a “forward auction” of initial licenses for flexible use of the newly available spectrum.
The reverse auction consists of three broad issues: bid collection, determination of which bids are
accepted, and determination of payment amounts to winners. We seek comment on all of these issues, for
example, whether to collect sealed bids or use a multiple round bid collection format such as a descending
clock auction
Repacking involves reorganizing the broadcast television bands so that the television stations that remain
on the air after the incentive auction occupy a smaller portion of the UHF band, subject to interference
and other constraints imposed by the Spectrum Act and treaties with Canada and Mexico. Repacking will
enable us to configure a portion of the UHF band into contiguous blocks of spectrum suitable for flexible
The forward auction will resemble prior competitive bidding systems that the Commission has utilized,
but with important differences. Its interdependence with the reverse auction and the repacking mean that
we will not know in advance the amount of spectrum we can make available in the forward auction, the
specific frequencies that will be available and, perhaps, the geographic locations of such frequencies.
Instead of a single band plan with identified frequencies, a set number of spectrum blocks and a uniform
set of geographic area licenses, the auction design must provide a framework that is flexible enough to
accommodate varying amounts of newly available spectrum in different locations.
More specifically the notice seeks comment on the following issues:

Auction design.

We invite comment on auction design choices and the tradeoffs they present. For both
the reverse and forward auctions, we invite comment on different procedures to collect bids, determine
which bids are accepted, and what each bidder pays or receives in payment. We also seek comment on
methodologies for the repacking process, which is part of the process for determining which broadcaster
bids will be accepted in the reverse auction. And we seek comment on an Incentive Auction Rules
Option and Discussion report prepared by Auctionomics and Power Auctions illustrating a
comprehensive approach to the auction design choices presented. Further, we invite comment on how to
design the incentive auction so as to facilitate the participation of a wide array of broadcasters and make it
as easy as possible for them to submit successful bids.

Participation in the Reverse Auction.

We interpret the Spectrum Act to limit eligibility to participate in
the reverse auction to commercial and noncommercial full power and Class A broadcast television

licensees. We invite comment on whether to establish reverse auction bid options including but not
limited to those identified in the Spectrum Act (to go off the air, to move from a UHF to a VHF television
channel, and to share a channel).


We invite comment on how to implement Congress’s mandate to make “all reasonable
efforts” to preserve the “coverage area and population served” of television stations as of the date of
enactment of the Spectrum Act. In particular, we propose to interpret “coverage area” to mean a full
power television station’s “service area” as defined in the Commission’s rules, and we seek comment on
several approaches to preserving population served.
600 MHz Band Plan. We seek comment on a band plan for reclaimed broadcast television spectrum
using 5 megahertz blocks, in which the uplink band would begin at channel 51 (698 MHz) and expand
downward toward channel 37 based on the amount of reclaimed spectrum, and the downlink band would
begin at channel 36 (608 MHz) and likewise expand downward. We seek comment on establishing 6
megahertz guard bands between mobile broadband use and broadcast use, , and propose to make this
spectrum available for unlicensed use. In addition, we seek comment on a number of alternative band
plan approaches.

Channel 37.

We invite comment on whether or not to relocate the Radio Astronomy Service and
wireless medical telemetry systems now operating on channel 37, and on whether and how to address the
post-auction availability of UHF band spectrum for fixed broadcast auxiliary stations, low power
auxiliary stations, and unlicensed wireless microphones.

Unlicensed Use of Spectrum.

We invite comment on measures that would make a substantial amount of
spectrum available for unlicensed uses, including a significant portion that would be available on a
uniform nationwide basis for the first time. Television white spaces will continue to be available for
unlicensed use in the repacked television band. In addition, we seek comment on making the guard bands
spectrum in the 600 MHz band plan available for unlicensed use, making channel 37 available for such
use, and making two channels currently designated for wireless microphone use available for white space


We seek comment on how to implement the repacking of broadcast television spectrum and
clear the reclaimed spectrum as expeditiously as possible while minimizing disruption to broadcast
television stations and their viewers. In particular, we propose streamlined broadcast license modification
procedures, invite comment on reasonable deadlines for stations to transition to any new channel
assignments or cease broadcasting, and propose to allow stations eligible for reimbursement of relocation
costs to elect between actual cost-based payments or advance payments based on estimated costs.
Action by the Commission September 28, 2012, by Notice of Proposed Rulemaking (FCC 12-118).
Chairman Genachowski, Commissioners McDowell, Clyburn, and Rosenworcel with Commissioner Pai
approving in part and concurring in part. Separate statements issued by Chairman Genachowski,
Commissioners McDowell, Clyburn, Rosenworcel and Pai.
GN Docket No. 12-268

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