Today marks the official start of the FCC’s broadcast television incentive auction. Auction-eligible stations have just hours left (until 6:00 p.m. EDT) to submit their initial commitments through the FCC’s auction system.
So you have a full power or Class A television station and submitted your initial commitment—what happens next? Nothing. That’s right, nothing. Okay, not exactly nothing, but it will feel like nothing for auction participants. FCC Chairman Tom Wheeler will not be showing up on anyone’s doorstep tomorrow morning with an oversized check and a camera crew in tow (call it a missed PR opportunity for the Commission).
As we first reported back in August, after today’s deadline, the FCC will process the initial bid commitments and send confidential letters to each bidder indicating that: (1) the station is qualified to participate in the clock phase of the reverse auction; (2) the station is not qualified because no initial commitment was made, and therefore, that station will be designated to be repacked in its pre-auction band; (3) the commitment(s) made by the applicant for the station could not be accommodated, and therefore, that station is not qualified and will be designated to be repacked in its pre-auction band, or (4) the auction system determined that the station is not needed, and therefore, the station is not qualified and will be designated to be repacked in its pre-auction band. The FCC has estimated that it will take 3-4 weeks to process the initial clearing target.
Once the FCC announces the initial clearing target and sends out the Third Confidential Status Letters, it will conduct one or more mock auctions to allow bidders to familiarize themselves with the bidding system. Only then will the live bidding rounds begin. Last week, Chairman Wheeler told a congressional committee that he expects the bidding rounds to begin sometime in May.
The FCC has not released a schedule for the live bidding rounds, but we expect them to begin slow (think 1-2 rounds per day) and possibly ramp up to 3 or 4 rounds per day as the auction progresses.
As a reminder, although it may feel like there is nothing going on, the incentive auction quiet period remains in effect. Broadcasters should avoid disclosing their initial commitments to anyone who may cause a violation of the FCC’s anti-collusion rules.