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
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