A panel of experts converged to shed light on the upcoming spectrum auction in a webinar from NewBay Media Thursday.
While the initial commitment deadline for bids is not until March 29, 2016, broadcasters must file their 177 Forms with the FCC by 6 p.m. ET on Dec. 18. The filing window opens at noon ET on Dec. 1 for the auction, called a reverse auction because prices go down.
Broadcasters must make a commitment to their preferred initial bid option by that March 29 date. “If they are chosen at the opening bid price, they have effectively made a legal commitment to abide by that bid at that price,” said Howard Symons, vice chair of the FCC’s Incentive Auction Task Force.
The FCC released its final opening bid prices for the auction on Oct. 16. Those prices, Symons said, “are designed to encourage participation.”
Those selected as winners in the auction that are getting out of the business have three months after they get paid to go off the air, while stations selected that are moving to channel sharing have six months. However, both types of winning bidders can ask for extensions.
Channel sharing gives broadcasters the opportunity to participate in the auction while still staying in the business. Term limitations on channel sharing agreements are permitted, Symons said. “You’re no longer required to be married for life.”
There is nothing that disallows both parties in a proposed channel sharing agreement from participating in the auction as bidders; however, they could run into some trouble if they are both selected. A few weeks ago, Symons said, the FCC made it clear that “parties can enter into backup agreements to protect themselves in the event that their preferred host was also selected as a winning bidder.”
Of course, to enter into a backup deal, they would need to find another station in the market to host them and then make the necessary agreements. “This is not a guarantee,” Symons said. “It’s a flexible opportunity.”
Then there are the difficulties of actually coexisting in a channel sharing agreement. “There’s the temptations to draw a line in the sand and say, ‘this half is mine’ or ‘this third is mine,’” said Alan Popkin, director of engineering, KLCS-TV in Los Angeles. The way encoding works, he said, “that’s the worst possible thing you can do,” since the stations will get fewer channels with worse quality.
Ideally, Popkins said, the engineering teams and management teams get together and come up with a final channel count, figure out how many HDs there are compared to SDs and then look at the bid structure.