What is an Incentive Auction?
An incentive auction is a voluntary, market-based means of repurposing much-needed spectrum for flexible use, including mobile services.
The FCC’s proposed incentive auction of broadcast television spectrum will allow broadcasters to bid to voluntarily relinquish their spectrum rights in exchange for a share of the proceeds from an auction of the repurposed spectrum to parties who will bid on licenses for flexible use.
What is spectrum?
Spectrum is the invisible infrastructure used by wireless devices, such as smartphone and tablets, to provide communications services.
What services will be improved by incentive auctions?
The additional spectrum reclaimed through the incentive auction will help increase the speed, capacity, flexibility, and ubiquity of mobile broadband services such as 4G LTE and Wi-Fi-like networks to improve performance of devices, such as smartphones and tablets, that rely on mobile networks.
Will I lose my over-the-air broadcast television?
No. The incentive auction process will enhance the ability of broadcasters who remain on the air to continue providing the public with diverse, local, free over-the-air television service. However, in order to accommodate the new wireless broadband services, there may be a brief transition period. The FCC will work with broadcasters to ensure that any transition is brief and that consumers are well-informed of any potential disruptions.
Who do I contact if I have general questions about incentive auctions?
Send an e-mail to the incentive auctions e-mail box: firstname.lastname@example.org.
What does the September 28, 2012 Notice of Proposed Rulemaking do and how can I send comments in to the FCC?
The Notice of Proposed Rulemaking kicks off the rulemaking process for the FCC to establish its incentive auction regulatory regime. The public may submit comments electronically using the Electronic Comment Filing System (ECFS).
What is the working timeline for the auction?
Comments in response to the NRPM are due on January 25, 2013 and reply comments are due March 12, 2013. We anticipate that we will be able to release an order in 2013, and conduct the auction in 2014.
Broadcaster Participation & Eligibility
What happens if you don’t get enough broadcaster participation for a successful auction of spectrum wireless providers?
We are doing everything we can to provide broadcasters with the information they will need to make that decision through the LEARN program, as well as to encourage their participation by making the auction process as simple and transparent as possible. We’re confident that, based on a fair assessment of the economic opportunity presented by the incentive auction, enough of them will voluntarily choose to participate to make for a successful auction.
Will stations with outstanding complaints be allowed to participate in the incentive auction, and if so how will the complaints be resolved?
Yes. The Notice proposes to allow all full power and Class A broadcast television licensees with valid licenses to participate in the reverse auction, regardless of pending license renewal applications or complaints. The Notice also seeks to identify processes that would allow us to resolve complaints efficiently while enforcing broadcasters’ compliance with their legal obligations. Specifically, it seeks comment on requiring broadcasters that bid to go off the air to enter into escrow arrangements to cover the potential costs of forfeitures as a means of enabling us to dispose of pending cases in an expedited fashion.
Can LPTV stations participate in the reverse auction?
No. As required by the Spectrum Act, low power TV and TV translator stations are not eligible to participate in the reverse auction, nor are they entitled to preservation of their service areas in the repacking. Low power television services have only secondary interference protection, and must make way for full power and Class A TV stations assigned to new channels. Recognizing the potential impact on LPTV and translator stations, the Notice invites comment on measures to help ensure that important programming they provide continues to reach viewers, including measures to promote use of available digital capacity on full power and Class A stations, MVPD systems, and/or the Internet to distribute their programming.
What happens if a broadcaster that participates in the reverse auction decides to exit the auction at some point? Will it still be able to continue broadcasting?
Yes. A station that chooses to withdraw from the bidding process will be treated the same for repacking purposes as one that does not participate at all.
What will the Commission do to maintain the confidentiality of broadcasters’ bids?
As required by the Spectrum Act, the Commission will take all reasonable steps necessary to maintain the confidentiality of Commission-held data of a broadcaster licensee participating in the reverse auction, including withholding the identity of such licensee until spectrum reassignments become effective. In the Notice, the Commission seeks comment on how to apply various elements of this requirement. Historically, the Commission has maintained the confidentiality of certain bidding information during stages of the bidding process in order to protect the integrity of the auction.
Broadcaster Bid Options
What bidding options will be available to broadcasters?
The Spectrum Act establishes three options: going off the air, relinquishing rights to a UHF channel to move to a VHF channel, or relinquishing rights in order to channel share. It also grants the FCC discretion to establish more options, and the Notice seeks comment on a number of options, including acceptance of interference from which a broadcaster otherwise would be entitled to protection. Such an option would expand the bidding opportunities available to broadcasters while potentially increasing the FCC’s flexibility in the repacking process and thereby enabling us to clear more spectrum.
What is the process for a broadcaster choosing to move from a UHF channel to a VHF channel?
The Notice proposes rules requiring that a broadcaster that casts a winning bid to move from UHF to VHF must terminate operation on its former channel and begin operation on its new channels within 18 months of issuance of notification that it is a winning bidder. The proposed rules also provide that a winning UHF to VHF bidder must provide notice to its viewers and MVPDs of the relocation.
Which parties in a channel sharing agreement must participate in the reverse auction?
The Notice proposes that only the “sharee”—the station that would relinquish its channel in order to move to the sharer’s channel—would participate in the reverse auction. The “sharer” station would not relinquish spectrum usage rights to the Commission as a part of the channel sharing arrangement, so the Notice proposes that it need not participate unless it intends to bid to relinquish other spectrum usage rights. However, the Notice does invite comment on the alternative; whether we should require all parties to a channel sharing agreement to participate.
How do the proposed rules apply in the event that a full power TV station and a Class A station agree to share a channel?
Under the Commission’s rules, full power broadcast TV stations operate at higher maximum power levels than Class A stations. Channel sharing stations will share the same facilities and, therefore, must operate at the same power level. If a full power and a Class A station agree to share a channel in connection with the incentive auction, the Notice proposes that the power of the “sharer” would govern. Thus, a Class A “sharee” that shares with the facilities of a full power station would be authorized to operate at the same power level as the full power “sharer,” but a full power “sharee” that shares the facilities of a Class A station would be limited to the lower power levels authorized for Class A stations.
What about channel sharing among LPTV stations?
The Notice addresses both low power television stations and translator stations, and asks if we should authorize voluntary channel sharing among such stations to help ensure that the important programming they provide continues to reach viewers.
What is repacking and why is it so important to the outcome of the auction?
Repacking is one of three major components of the incentive auction, along with the reverse and forward auctions. It refers to the process of reassigning broadcast TV channels in order to free up spectrum for other uses. Repacking plays a role in the reverse auction. It will help us identify which bids we should accept in order to free up the most spectrum, consistent with interference and other constraints.
Will the auction rules prohibit certain communications between applicants?
The Commission proposes a rule that would prohibit applicants and related parties from communicating the substance of bids and bidding strategies starting when a party applies to participate in the incentive auction until a date specified by public notice after the bidding. This is similar to a rule that the Commission has long had regarding communications among participants in its spectrum license auctions. The proposed rule would NOT necessarily prohibit communications among participants for other normal business purposes, such as in connection with local marketing agreements, network affiliation agreements, or other similar cooperative arrangements. Furthermore, the Commission sought comment on whether to adopt specific exceptions to the prohibition.
Transitioning the UHF Band
How much will it cost to transition broadcasters following the auction?
The cost will largely depend on how many broadcasters remaining on the air after the incentive auction are assigned to new frequencies in the repacking. The Spectrum Act provides for up to $1.75 billion to reimburse broadcasters for the costs associated with modifying their facilities to operate on new channels. In order to streamline the reimbursement process and make funds available to broadcasters as soon as needed, the Notice proposes to allow eligible broadcasters to elect advance reimbursements based on their estimated costs.
Last updated: December 10, 2012