Genachowski: Spectrum Auction Is Success From Various Vantages

Reaction flows in after FCC incentive auction meets minimums for closing

Reaction began pouring in after the FCC's incentive auction met its two benchmarks Wednesday, meaning it will close after bidding dries up in stage four.

Former FCC Chairman Julius Genachowski, under whose watch the spectrum auction was drawn up, agreed with current chairman Tom Wheeler that the auction had been a success, and despite some naysaying at the outset.

"Today it's clear the auction will be a success," he told B&C. "Of course when we originally proposed the idea many said it was crazy and would never happen. The auction will recover an unprecedented amount of spectrum for the mobile ecosystem, both licensed and unlicensed spectrum, and it gave broadcasters an opportunity for a market-based monetization that wouldn't have otherwise been available. It's the first wireless auction of its kind in the world, and important that it happened in the United States. The challenge now for the FCC and new administration is how to keep pushing the envelope on spectrum policy and ensure the U.S. maintains its global leadership."

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Genachowski is currently a partner at The Carlyle Group.

The National Association of Broadcasters did not say it was crazy, but has always argued that the spectrum shortage used to justify the auction was overstated. That seemed to bear out when the broadcasters were willing to give up 126 MHz and wireless bidders would only pony up enough to close the auction at 84 MHz. Of course, the broadcasters asking price of $86 billion for 126 (they ultimately took $10 billion for the 84) had something to do with that initial reluctance.

Following the announcement that the auction would close, NAB was focused on the future, which is the relocation of TV stations after the auction.

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"NAB looks forward to the close of the incentive auction, and to working with the FCC and Congress to develop a repacking plan and transition schedule that protects viewers and avoids service disruptions," said NAB spokesman Dennis Wharton.

"Today's results have solidified the final stage in the FCC’s historic voluntary incentive spectrum auction," said Rep. Anna Eshoo (D-Calif.), former ranking member of the House Communications Subcommittee, which had a pivotal role in the legislation that created the auction. "The 70 MHz of licensed spectrum and 14 MHz of unlicensed spectrum will unlock the next generation of wireless services, giving consumers access to faster, more robust mobile broadband while also unleashing innovation. With global mobile data traffic expected to increase nearly eightfold between 2015 and 2020 and wireless carriers taking steps to deploy 5G, it’s critical that we continue efforts to free up more spectrum for both licensed and unlicensed use. The results of this auction will drive American innovation, create new jobs and increase consumer choice."

Eshoo also signaled that the auction had achieved the high-speed broadband goal of universal availability.

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“This auction has fulfilled Congress’s vision for fast, ubiquitous broadband to all Americans," she said. "I’m particularly proud of my work with Senator [Ed] Markey to create a process where wireless companies of all sizes will have an opportunity to acquire valuable spectrum, enhancing competition in the wireless marketplace. I look forward to continuing to work with my colleagues in ensuring the successful conclusion of this auction.”

The reference to "all sizes" was to the spectrum reserve the FCC set aside for nondominant carriers, a reserve triggered Wednesday when the benchmarks--total bids and the prices in the top 40 markets--were met.

“The FCC’s broadcast incentive auction has reached an important milestone, ensuring that a substantial 70 MHz of spectrum will be repurposed for mobile broadband, and the U.S. Treasury will receive additional billions of dollars in auction proceeds," said Diane Smith, interim chair of Mobile Future. "This achievement is a critical step forward to meeting exploding consumer demand for mobile connectivity and ensuring the United States remains the global leader in wireless and 5G deployment. We look forward to working with the incoming Administration to ensure this vital spectrum is put to use for American consumers as soon as possible.”

"The incentive auction 84 MHz band plan is built on the backs of as many as 3141 LPTV and TV translator licenses and permits, says Mike Gravino, director of the LPTV Spectrum Rights Coalition [Gravino says as many as that number will be displaced by the auction], which is as much as 80% of all of the spectrum sold to the wireless companies. This is the LPTV and TV translator auction, but we don’t get paid anything from the auction. We actually have to pay over $1 billion ourselves for our own channel moves, while everyone else affected by the auction gets funding and is made whole.”

Most LPTVs and translators were not protected in the post-auction repack of TV stations which will follow the auction and take more than three years to complete.