CTIA Asks FCC to Give Broadcasters More Auction Flexibility

Says reducing complexity should not trump encouraging more TV station participation
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Wireless companies have historically been big supporters of the FCC's incentive auction, but they have a number of bones to pick with the way the FCC's has teed up the upcoming incentive auction framework and says FCC it should make it easier for broadcasters to participate.

"The Commission can and should do more to provide broadcasters with the incentive and ability to participate, including by providing broadcasters with greater flexibility to adjust their bids during the auction," CTIA said.

And while it was the National Association of Broadcasters that used to advise the FCC not to rush the auction, wireless carriers are now cautioning the FCC about getting it done right rather than done fast.

CTIA: The Wireless Associations, in reply comments to the FCC, says the FCC should make broadcasters' election of auction options more of a two-way street.

Currently, there are several ways to be compensated, including by giving up spectrum and getting out of the business, sharing a channel, moving from a UHF to a VHF channel, or moving from a high VHF assignment to a low assignment.

As the FCC has proposed the reverse auction framework, a broadcaster can decrease its election, say from giving up its channel and exiting the business to giving up a channel but sharing with another station. But they can't move in the other direction. The FCC said that will make the auction simpler (only relatively, since it is a very complicated auction).

CTIA says that broadcasters should instead be able to move up or down that sliding scale of participation, and that the clearing of more spectrum and increased participation that might prompt, trumps concerns about the complication factor.

As to the timing of the auction, which is currently scheduled for first quarter 2016, CTIA said: "While CTIA understands the Commission's desire to expedite the incentive auction in an efficient manner, this goal should not undermine other, more important considerations that will have a greater bearing on the auction's success. In particular, the Commission should provide forward auction bidders with more time to regroup and make key strategy decisions between auction phases. Additionally, the Commission should not rush to auction the most impaired licenses - i.e., those that are impaired by more than 50 percent."

CTIA also wants the FCC to "seek to minimize impairments in licensed 600 MHz spectrum and provide absolute clarity on these impairments to potential forward auction bidders," or even adopt a less variable band plan.

"[L]license impairments will create significant uncertainty for bidders in the forward auction, making it difficult to assess the cumulative effect of impairments on the value of the underlying licenses particularly because the Commission has required that participants in the forward auction will bid on "generic" licenses

In order to collect more spectrum, the FCC is allowing for recovery of different amounts of spectrum in different markets, which means there could be a broadcaster still on, say ch. 47 in one market and a wireless company in a nearby market, whose license would then be impaired. The degree to which that wireless operator is limited in its reach due to that potential interference is called impairment. The FCC is proposing to limit such impairment, but neither broadcasters nor wireless companies think the limit (20% of the nationwide audience) is sufficiently limiting.

"As an initial matter, then, the Commission should look at ways to reduce impairment so that market variability is more limited. The Commission should also provide more specific information regarding license impairments and how they will be calculated. Given the considerable confusion and uncertainty reflected in the record, basic principles of administrative law dictate that the Commission must, at a minimum, clarify its proposals before it proceeds."

CTIA also wants the FCC to provide wireless companies more information about potential interference before the auction.

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