It has been more than four months now since the FCC adopted a Report and Order for the forthcoming incentive auction of television broadcast spectrum. The Report and Order provided a framework for the reverse auction, where television stations will bid to relinquish some or all of their spectrum rights; the forward auction, where wireless providers will bid for spectrum currently allocated for broadcast television; and the repacking, where the Commission will condense broadcasters into a smaller swath of spectrum in the lower part of the current UHF band. The number of the items that the FCC must resolve between now and the planned mid-2015 auction, however, continues to grow.
The FCC has indicated that it will initiate five rulemaking proceedings that relate to the incentive auction: (1) adopting rules regarding “inter-service interference” between television and wireless broadband operations; (2) addressing the future of LPTV and TV Translators; (3) considering changes to the Part 15 rules to allow use of TV White Space devices in the repacked television spectrum, in the 600 MHz Band guard bands, and on Channel 37; (4) responding to the long-term needs of wireless microphone users; and (5) reviewing its designated entity rules. In its June timeline, the FCC committed to initiate these proceedings by the third quarter of 2014; however, only the Part 15 rules and wireless microphones are on the preliminary agenda for the September 30, 2014 open meeting. The Commission likely will address some of these issues on circulation.
Auction Comment Public Notice
Whereas the Report and Order provided a framework for the incentive auction, the details will be resolved through a series of two public notices. The FCC first will adopt an Auction Comment Public Notice, which will be similar to a notice of proposed rulemaking in that it will seek comment on specific rules for the incentive auction. After a comment period, the Commission will adopt the final auction rules in an Auction Procedures Public Notice. The FCC timeline originally slotted the Auction Comment Public Notice for release in the third quarter of 2014, but with just two weeks left in the quarter, that now appears unlikely. We expect the Commission to adopt the Public Notice sometime in the fourth quarter, which almost certainly will push the Auction Procedures Public Notice from the first quarter of 2015 to sometime in the second quarter.
Pre-Auction Licensing Deadline
Television broadcasters with unbuilt construction permits for auction-eligible facilities will want to keep an eye out for the pre-auction licensing deadline, which will establish the date by which those stations must be licensed to be eligible for the auction and/or protected in the repacking. The Media Bureau is scheduled to announce the deadline in the first quarter of 2015, providing broadcasters with at least 90 days to license those facilities or risk losing them in the repacking.
Litigation Challenging the Report and Order
The National Association of Broadcasters (“NAB”) and Sinclair Broadcast Group, Inc. (“Sinclair”) each filed Petitions for Review of the Incentive Auction Report and Order in the U.S. Court of Appeals for the DC Circuit. The NAB petition argues that: (1) the FCC has neglected its obligation to preserve the coverage areas of television stations that are not populated; (2) the Commission has proposed to impermissibly change the methodology of OET Bulletin 69 (based on, inter alia, the use of a common grid of cells instead of a station-specific grid, the use of one arc-second terrain data instead of 3 arc-second terrain data, the use of the new TVStudy program, and the use of 2010 census data, not 2000 census data); and (3) the FCC should have included fill-in translators as part of a station’s coverage area and population served. Sinclair has not yet identified the specific issues for which it is seeking review.
NAB sought, and was granted, expedited consideration of its Petition for Review. Under the current schedule, the NAB’s brief is due on October 6, the FCC’s brief is due on November 13, and briefing concludes on December 18. However, the D.C. Circuit, in adopting this schedule, stated that it may need to be adjusted if other parties file petitions for review. Thus, it currently is not clear how Sinclair’s petition will affect the schedule.
Petitions for Reconsideration
Parties representing a wide-variety of interests filed a total of 30 petitions for reconsideration of the Incentive Auction Report and Order with the FCC. Of particular interest to broadcasters:
- The ABC, CBS, FOX, and NBC affiliates associations echoed arguments made by the NAB that the FCC must ensure that repacking costs do not exceed the amount in the repacking fund, that the Commission should reconsider the deadlines for auction completion and repacking, that the FCC should complete international coordination before the auction begins, and that the Commission should not impose consumer education requirements on stations assigned to new channels.
- Several broadcasters and a broadcast engineering firm argued that the Commission failed to take sufficient steps to protect television stations’ coverage areas and populations served.
- Petitions on behalf of low power television interests criticized the FCC’s decision to exclude LPTV stations from the auction and, in particular, to exclude out-of-core Class A-eligible stations that were not yet obligated to move in-core (and thus obtain their Class A licenses) as of the eligibility cut-off date.
- Other broadcasters challenged specific aspects of the FCC’s auction eligibility rules.
- A petition filed on behalf of public broadcasting interests contended that the FCC should take steps to ensure that no area is left without an noncommercial allotment after the auction.
- Two parties urged the Commission to reconsider permitting unlicensed operations in the duplex gap. The Radio Television News Directors Association urged the FCC to reserve the duplex gap for wireless microphones and other low power auxiliary station users while Qualcomm contended that unlicensed operations in the duplex gap could interfere with licensed use of adjacent 600 MHz spectrum. Sennheiser Electronic Corporation, meanwhile, said the FCC should reserve two block of clean, reserved UHF spectrum for wireless microphones. The Wireless Medical Telemetry Service Coalition and GE Healthcare, for their part, opposed permitting unlicensed operations on Channel 37.
- Finally, the Expanding Opportunities for Broadcasters Coalition (a coalition of broadcasters interested in participating in the reverse auction) filed a “friendly” petition seeking reconsideration of rules that it said will discourage the use of channel sharing.
The FCC will need to address these petitions in a reconsideration order sometime before the auction, but the timeframe for that order is not clear. There are two particular timing issues to watch. First, given the overlap between some of the petitions for reconsideration and the NAB and Sinclair lawsuits, the D.C. Circuit may—at the request of a party or on its own motion—stay the litigation pending the FCC’s resolution of the petitions for reconsideration. Second, it will be interesting to see if the Commission adopts the Auction Comment Public Notice before adopting an order on reconsideration, given that the petitions for reconsideration raise some issues that could affect the Public Notice.
The bottom line here is . . . stay tuned! We will continue to provide updates and analysis about the auction and the repacking. If you have questions in the meantime, please feel free to contact us.