The Federal Communications Commission kicked off the process yesterday to auction off portions of the television broadcast spectrum to support the growth of mobile broadband services. The agency called for broadcasters to voluntarily release frequencies in exchange for payments derived from the proceeds of the auctions.
Congress mandated the TV band auctions in the 2012 Middle-Class Tax Relief and Job Creation Act, also known as the Spectrum Act, which President Obama signed on Feb. 22.
FCC said in a Notice of Proposed Rule-Making released Tuesday that the TV band auction will comprise three steps: a voluntary “reverse auction” by broadcasters of their spectrum, a “repacking” of TV bands to free up spectrum for broadband wireless use and a “forward auction” of the frequencies broadcasters surrendered in channels 36-51 (608MHz-698 MHz) of the UHF TV band.
Due to the near-ubiquitous use of cable or satellite TV, FCC views the TV broadcast band as ripe for a switch to wireless broadband. The commission estimated that only 10 percent of the 107 million TV households in the country rely on over-the-air service.
“This is a big deal,” FCC Chairman Julius Genachowski said in a statement. “Today, the United States becomes the first nation in the world to launch incentive auctions -- a new paradigm in spectrum policy that uses market forces to repurpose beachfront spectrum for licensed and unlicensed wireless broadband.”
Genachowski added the incentive auctions will maximize the amount of freed spectrum and will ensure broadcaster participation in the auction by making the process as transparent and easy to understand as possible.
Gordon Smith, president and chief executive officer of the National Association of Broadcasters, said in a statement that NAB is “committed to working with the FCC and Congress to ensure the auctions are successful and that broadcasters who choose to stay in business are not harmed by shrinking the TV band.
“Broadcasting remains a great business and an indispensable service to local communities. That’s why, in our opinion, the vast majority of TV stations will choose to remain in business,” Smith said.
“As the commission shapes the auctions, we hope it is mindful of adopting policies that protect and preserve the future of free and local television,” he added.
CTIA-The Wireless Association, said in a statement, “since spectrum is a finite resource, we’re pleased the commission has begun the process of establishing the rules that will fulfill the goals of the recently adopted, bipartisan spectrum legislation. We also commend the commission for working to ensure that it not only establishes rules that result in a successful auction, but also completes its efforts in a timely manner.” Comments on the TV band rule-making are due Feb.19, 2013.
In previous wireless auctions and frequency allocations, FCC granted what amounted to national licenses. Since all broadcasters may not participate in the reverse auction, the commission plans a market-based approach, allocating TV band spectrum in distinct geographic markets in five MHz blocks in the 90MHz of spectrum targeted for wireless broadband service in the UHF band.
FCC also envisions that the new TV band spectrum plan will free between 6 to 10 MHz of spectrum for unlicensed wireless use in a frequency range that has better propagation characteristics than today’s Wi-Fi bands, which operate in the 2.4 Hz and 5 GHz frequency range.
The TV band auction plan also covers UHF channel 37 (608-614) MHz, which has not been used for broadcasting but instead has been allocated to radio astronomy observatories, such as the Very Large Array in New Mexico, and wireless medical devices such as heart monitors.
FCC seeks comments on whether to include Channel 37 in the auction, which would require shifting operation of the 12 radio telescopes in the United States and medical devices to another band.
Commissioner Ajit Pai endorsed the TV band auction plan with reservations, noting it will not provide funds for the First Responder Network Authority, which was established in the Spectrum Act to build a national, broadband public safety network.
The Spectrum Act provides $1.75 billion to compensate broadcasters who choose not to participate in the repacking process, but Pai pointed out the rule-making acknowledges this may not be enough and does not offer any increase in these funds.
The rule-making does set a date for completion of the proceeding, even though Pai believes auctions should begin in June 2014.