FCC Establishes Incentive Auction Bidding Procedures

Media Contact:

Charlie Meisch, (202) 418-2943

Charles.Meisch@fcc.gov

For Immediate Release

FCC ESTABLISHES BIDDING PROCEDURES FOR

2016 INCENTIVE AUCTION

Auction Scheduled to Begin March 29, 2016

--

WASHINGTON, August 6, 2015 - The Federal Communications Commission today adopted the

Procedures Public Notice establishing the bidding procedures for next year's incentive auction.

The incentive auction, scheduled to begin on March 29, 2016, is designed to allow market forces

to make available high-quality low-band spectrum for mobile broadband.

Following a period of extensive public comment, stakeholder engagement, and Commission

deliberations, today's action simplifies and adds further transparency to the auction.

Specifically, the item adopted today:

Establishes a procedure for selecting the initial clearing target (i.e., the amount of

repurposed spectrum offered in the auction) that allows market forces to determine the

highest and best use of spectrum on a near-nationwide basis while lowering the average

impairment threshold - the maximum percentage of the overall population that new

wireless licensees cannot serve - by as much as half depending on the clearing target.

Establishes a formula for calculating opening price offers for each eligible television

station based equally on its interference and population characteristics, noting that

population is an important indicator of value in the forward auction.

Eliminates the Dynamic Reserve Pricing proposal that would have reduced opening

bids for stations that cannot be repacked in the TV band.

Bases the calculation for forward auction minimum opening bids, upfront payments, and

bidder eligibility (as well as for measuring bidding activity) on the assignment of a

specific number of bidding units to each spectrum block to be auctioned.

Ensures that broadcasters receive information about channel vacancies from round to

round so that they can assess whether to drop out of the auction based on the likelihood

that the current price will continue to decrease.

Ensures that wireless companies receive detailed information on impaired licenses in a

given area, including the source and location of any interference; and progress reports on

the prices of each block, quantity demanded, and how close forward auction bidding is to

confirming that the auction can close at the selected clearing target.

Establishes two categories of generic spectrum blocks for bidding in the clock phase of

the forward auction: Category 1 blocks with potential impairments that affect zero to

15 percent of the population of a geographic area ( Partial Economic Area or PEA );

and Category 2 blocks with potential impairments that affect greater than 15 percent

and up to 50 percent. Prices for frequency-specific licenses will be adjusted downward at

the end of the assignment phase of the forward auction by one percent of the final clock

price for each one percent of impairment to the license.

Authorizes the auction system to relocate TV stations in the downlink, uplink, or duplex

gap in a limited number of geographic areas where necessary to accommodate market

variations in broadcaster participation, and seeks further comment on a proposal to

preserve an additional vacant channel for licensed wireless microphones and unlicensed

devices in such geographic areas in which a TV station is assigned a channel in the

duplex gap.

Affirms the proposed average price and spectrum benchmarks of $1.25 and 70 megahertz

of licensed spectrum, respectively, to implement the final stage rule adopted in the

Incentive Auction Report & Order. The benchmarks will help to ensure that winning bids

for the licenses in the forward auction reflect competitive prices and return a portion of

the value of the spectrum to taxpayers without reducing the amount of spectrum

repurposed for new, flexible-use licenses. Satisfaction of the final stage rule will also

trigger the establishment of the spectrum reserve adopted in the Mobile Spectrum

Holdings Report & Order.

Establishes a 20 MHz cap on the total amount of reserve spectrum that any reserve-

eligible entity could acquire in PEAs with populations of 500,000 or fewer people.

Enables the Commission to trigger an extended round to give bidders the opportunity

to meet the final stage rule without moving to another stage if the shortfall is 20 percent

or less.

Affirms the assignment round bidding procedures proposed in the Comment PN with a

modification: in addition to limiting PEA grouping to PEAs with the same mix of clock-

phase winners and winnings, as proposed, we will limit PEA grouping to unimpaired

PEAs. Winning clock-phase bidders will have the opportunity to bid for their preferred

combinations of licenses, consistent with their clock-phase winnings, in a series of single

sealed-bid rounds conducted by PEA or, in some cases, PEA group.

Establishes optimization techniques to determine a final TV channel assignment plan that

satisfies the constraints adopted in the Incentive Auction R&O and strives for these

additional policy goals:

o Maximizing the number of stations that stay on their pre-auction channels;

o Minimizing aggregate new interference to individual stations; and

o Avoiding channel reassignments for stations with high anticipated costs.

These goals, in turn, will help to ensure that the total reimbursement costs associated with

the repacking process remain below the $1.75 billion in the TV Broadcaster Relocation

Fund that Congress made available, speed the post-auction transition process and

minimize disruption for stations and viewers alike.

For more information about the Incentive Auction, please visit

https://www.fcc.gov/incentiveauctions.

Action by the Commission

LINK:	http://www.fcc.gov/document/fcc-establishes-incentive-auction-bidding-...
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