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Next Steps in the FCC’s Incentive Auction: A Preview of the Seven Near-Term Releases

Trey Hanbury

Trey Hanbury,

Washington, D.C.

A.J. Burton

24 September 2014

The Federal Communications Commission (“FCC”) is deep in the midst of planning the world’s first broadcast incentive auction, currently slated for mid-2015.  The auction will give over-the-air television broadcasters an opportunity to sell their valuable spectrum rights in a reverse auction process, and the FCC will then repackage this cleared spectrum and auction it to broadband wireless companies, enabling them to better meet consumer’s exploding demand for wireless data.  The Commission issued initial rules for the auction in its Report and Order in May of this year, but its work is far from over.

Next Steps in the FCC’s Incentive Auction: A Preview of the Seven Near-Term Releases

In the coming weeks, the FCC has seven different items scheduled for adoption that will further affect the mechanics of the Incentive Auction, and some of these items implicate key policy decisions, including, for example, any minimum price the Commission will set for the spectrum it sells.  The FCC has previously released a summary of these follow-on items, as well as a timeline for their release, targeting third quarter of 2014.  With the third quarter of 2014 coming to a close this month and with only three of the follow-on Incentive Auction items scheduled for a vote at the upcoming September 30th Open Meeting, below is an update regarding all seven of these items based on the further details that have emerged since the Commission’s last official releases earlier this summer.

  • Part 15 Notice of Proposed Rulemaking.  (Sept 30th Open Meeting)

    • The draft NPRM will propose to divide the 11-megahertz duplex gap as follows: 6 MHz for unlicensed devices, including unlicensed microphones, at the top of the duplex gap, followed by licensed mics in the next 4 MHz, followed by a 1 MHz buffer between the duplex gap and wireless downlink spectrum.
    • The item will propose to allow Mode 2 devices (ones with database lookup capabilities) into the duplex gap, but not Mode 1, personal/portable devices because Mode 1 portable devices have neither data lookup capabilities, nor on-board geolocation capabilities, but instead rely on geolocation information from other fixed devices.
    • The item will also propose to allow fixed, but not personal/portable, Part 15 operations in Channel 37.

  • Wireless Microphones Notice of Proposed Rulemaking. (Sept. 30th Open Meeting)

    • The Commission will consider a Notice of Proposed Rulemaking to address the needs of licensed wireless microphone users, while recognizing that they must share spectrum with other wireless uses in an increasingly crowded spectral environment.
    • In particular, the FCC will examine the future of licensed mics, both inside and outside the TV bands, including identifying new spectrum bands for wireless mics outside of the 600 MHz band.
    • As a point of clarification, this NPRM addresses licensed mics while the Part 15 NPRM (the first item, above) addresses use of unlicensed mics.

  • Inter-Service Interference Declaratory Ruling. (Sept. 30th Open Meeting)

    • On September 19th, a draft declaratory ruling was circulated to the Commissioners clarifying the interpretation of the TV station coverage area and population requirements.
    • The language was originally included in the draft report and order circulated to Commissioners on September 9th (the fifth item, below) but was separated into a stand-alone ruling to expedite adoption.

  • Low-Power TV Notice of Proposed Rulemaking and Public Notice(September 2014?)

    • Public Notice.  A public notice was circulated to the FCC Commissioners on Sept. 9 concerning the suspension of expiration dates and construction deadlines for new digital LPTV and translator stations.
    • NPRM.  Also on September 9th, an NPRM was circulated that makes proposals to assist LPTV and translator licensees following the auction.
    • These measures include channel sharing and providing assistance through software to help LPTV operators better identify available channels.

  • Inter-Service Interference Order and Further Notice of Proposed Rulemaking.  (October 2014?)

    • The Inter-Service Interference Order & FNPRM will address managing potential interference between television and wireless broadband operations:   

      • Among other things, this item will address a methodology to allow the implementation of market variation for making spectrum available for wireless licensees, specifically the technical standards for determining interference between broadcasters and wireless licensees.  Whereas the Comment Public Notice (the seventh item, below) will address how to handle assignment of the impaired licenses, the Inter-Service Interference Order will adopt a methodology for determining impaired licenses.
      • Additionally, the Commission proposes to reject broadcasters’ call for a cap on aggregate interference to a broadcast station from other stations, saying that there are other ways to address the issue.

  • Competitive Bidding Notice of Proposed Rulemaking.  (October 2014?)

    • Joint-Bidding, AMR, & Former Defaulter Proposals. Based on widely circulated reports, the item tentatively concludes that the FCC should ban joint-bidding arrangements among national wireless carriers and proposes to update its “designated entity” (DE) rules, including by eliminating the attributable material relationship (AMR) provision and allowing an entity that received bidding credits at an auction to lease 100% of its spectrum capacity to large carriers.  The item also proposes to modify the former defaulter rule, tentatively concluding to set a seven-year term and $100,000 debt limit for enforcement of the rule.
    • The FCC’s internal deadline for a vote is September 26th, but that deadline has already been extended four times due to concerns from the Republican Commissioners.

  • Comment Public Notice.  (October-November 2014)

    • The Commission will seek comment on the specific procedures to be used for the incentive auction.   Typical Comment Public Notices seek comment about bidding rounds, stopping rules, upfront payments, activity rules, reserve prices, and other rules related to auction design.
    • The Incentive Auction Comment Public Notice will address these issues, but through the lens of a novel and unique auction design.
    • The FCC originally committed to releasing a Comment Public Notice in third quarter of 2014, which ends this month.   With no reports yet of circulation to the Commissioners, this item seems unlikely to be adopted before October or November.

Trey Hanbury

Trey Hanbury,

Washington, D.C.

A.J. Burton

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