FCC Sets 126 MHz Spectrum Auction Clearing Target

Signals strong station interest in big auction payday; Auction to begin May 31

The FCC Friday unveiled its much-anticipated initial clearing target for the spectrum auction, and it is at the top of the charts at 126 MHz (check here for the number of channels being reclaimed in a 126 MHz scenario, which was the top target the FCC had set). The auction will begin May 31.

“The initial clearing target announced is the highest possible clearing target and associated band plan for which the provisional assignment satisfies the optimization objectives and the near-nationwide standard for impairments,” the FCC said.

Related: FCC Will Pay for Covered Pre-Auction Expenses

The clearing targets the FCC had set ranged from 42 MHz at the low end to 126 MHz on the high (the others were 48, 60, 72, 78, 84, 108 and 114). The FCC initially set 138MHZ and 144MHZ as initial targets, too, but those were withdrawn last fall due to coordination issues with Canada.

The FCC did not say how many stations had committed to the auction, which could yield nine-figure paydays, but a target of 84 MHz or less would have been a disappointing turnout, said one source tracking the auction for interested stations. FCC Chairman Tom Wheeler had signaled he was pleased with the TV station turnout.

The clearing target is based on the number of stations participating, which is plugged into software that evaluates the interference characteristics of all the stations not in the auction, and how they can be repacked.

The FCC said 10 paired blocks will be available in most markets, 99% of which will not be "impaired" by interference, thanks to the robust broadcaster participation.

Related: S&P Global Predicts Big Potential Auction Payday

Look for mock auctions to be held May 25 and 26.

There will be an online bidding tutorial on May 18; the auction system will be available to preview from 10 a.m. May 23 to 6 p.m. May 24; a clock phase workshop will be held May 24.

The auction begins May 31 with one round per day, starting with a six-hour 10 a.m.-4 p.m. round, then a four-hour round (10 a.m.-2 p.m) June 1.

Starting June 2, there will be two rounds of bidding per day until further notice, 10 a.m. to 12 p.m. and 3 p.m. to 5 p.m.

Related: Competitive Carriers Association Applauds FCC's 126 MHz Spectrum Auction Target

If the FCC does not collect enough in the forward auction to pay broadcasters at this initial clearing target, then it will have to lower its target and pay fewer stations.

“Broadcasters are excited that the TV auction process is moving forward and that the FCC is being aggressive in its auction estimates," said National Association of Broadcasters President Gordon Smith. "Now the onus is on the wireless industry to demonstrate there is significant demand for 600 MHz spectrum. We look forward to the conclusion of a successful auction that preserves and sustains America’s vibrant free and local television business that is the envy of the world.”

“That is indeed a 'Spectrum Extravaganza' – 126 MHz far exceeds early estimates of likely broadcaster participation,” said Preston Padden, formerly executive director of the Expanding Opportunities For Broadcasters Coalition. “The high clearing target is a testament to years of hard work by the FCC Commissioners and Staff including the dedicated Auction Task Force including, (1) giving broadcasters early pricing guidance, (2) including interference in the pricing formula, (3) agreeing to pay Stations that sell and share the same price as Stations that sell and exit the business and (4) generally liberalizing the original rules on channel sharing."

"All criticism aside, [Chairman] Wheeler, is finally showing some balance when it comes to the broadcasters," said Adonis Hoffman, chair of Business in the Public Interest and former chief of staff to FCC Commissioner Mignon Clyburn. "The high clearing target suggest this auction could be a win-win-win. A win for broadcasters, a win for wireless, and a win for the Treasury. This also should be a boost for [ATSC] 3.0, which has gotten a good housekeeping seal of approval.

Related: Lights, Camera… AUCTION!

"With this step in the right direction, it would be nice to see the other shoe drop in favor of the low-power guys, who deserve more than they stand to get out of this windfall.

"Aside from the Task Force, a lot of credit should go to NAB, and to Preston's coalition for pushing the envelope as far as possible--as only he can do.  While there are still miles to go, this is good for the public interest." Padden's coalition comprised auction-eligibl stations, many of whom were likely the independents whose interests he advocated for as head of the Association of Independent Television Stations.

The FCC will be sending out letters to stations getting the bad news that even though they wanted to give up spectrum, the FCC won't need them. Those who are participating will also learn at what level they are needed--giving up specturm and exiting--or sharing--or moving to another channel. 

Any auction-elligible station that has not gotten one of those letter by noon, May 4, should contact the FCC's auction hotline at (717) 338-2868.