This morning, the FCC announced that the initial clearing target for the reverse auction will be 126 MHz, which is at the high end of expected clearing targets (although the FCC adopted potential band plans up to 144 MHz, its agreements with Mexico and Canada limited the utility of band plans above 126 MHz). The high clearing target reflects robust broadcaster participation in the auction. In a statement, FCC chairman Tom Wheeler said: “The wireless industry has said it needs additional spectrum to meet growing customer demand and usher in the age of 5G. The broadcasters have stepped up and done their part to fulfill that demand.”
Under the 126 MHz clearing target, the new UHF television band will be 14-29. Although the FCC has not announced how many television stations will be repacked on channels above 29 (and within the new 600 MHz band), based on the other information that the FCC released, the number of such stations appears to be low (which will come as a relief to many broadcasters that did not submit bids to participate in the auction).
With the initial clearing target out of the way, much attention will turn to the forward side of the auction and whether there will be sufficient demand to allow the auction to close in the first stage. Under the Spectrum Act and the FCC’s rules, the auction can only close if forward auction revenues are sufficient to cover the cost of clearing broadcasters and the FCC’s auction costs, as well as to fund the $1.75 billion TV broadcaster repacking fund. If the forward auction falls just short, the FCC will hold an extended round in an effort to close the auction in that stage. Otherwise, the FCC will advance to a second stage of the auction at a 114 MHz clearing target.
The FCC’s release contained positive news for the wireless industry as well. The 126 MHZ clearing target translates to 100 MHz (10 paired blocks) of spectrum available in the forward auction. Of the blocks that the FCC will be offering nationwide, 4030 will be “Category 1” blocks with zero to 15 percent impairment, while just 18 will be “Category 2” blocks with 15 to 50 percent impairment. Of the Category 1 blocks, around 99 percent will have no impairment at all. 112 blocks will not be offered because the percentage of population subject to inter-service interference exceeds 50 percent.
The map below shows the large number of category 1 blocks that will be available across the country, by PEA. As you can see, the majority of the interference is created by cross-border allotments, particularly in Mexico.
The map also shows the wide availability of Category 1 licenses throughout much of the country, including in New York, Chicago, Detroit, and Boston.
The Category 2 blocks are located in Cleveland, OH (1); Toledo, OH (2); Altoona, PA (1); Fredericksburg, VA (1); Jamestown, NY (1); State College, PA (1); Eagle Pass, TX (6); Elmira, NY (1); Kingsville, TX (3), and Franklin, NC (1). Category 2 blocks could arise from interference caused by cross-border stations or U.S. stations repacked in the 600 MHz band.
As baseball fans know, hope springs eternal in April. No one can predict how the auction will turn out until we see just how much money broadcasters receive to go off the air and just how much wireless providers are willing to spend. But a lot of people in the broadcast and wireless industries will be pleased with today’s announcement.