Need spectrum? FCC plans TV incentive auction for 2014

The Chairman of the Federal Communications Commission plans to share his thinking around how the agency will conduct an auction that would take airwaves from TV broadcasters and make them available for mobile broadband. The plan to entice TV broadcasters who are currently using airwaves to give them up to the FCC, which then auctions those airwaves to carriers, has been controversial from the start.

But an FCC official speaking on background says the agency has come up with a plan — or rather the outlines of a plan — and will seek to approve it at the September open commission meeting. If approved, the public can comment on the proposal, and the agency will redefine its plan with the goal of writing up formal rules by the middle of 2013. It hopes to then hold the actual spectrum auction by 2014. This is an incredibly fast timeline for something so complex.

It’s an issue that is important for President Obama and for current FCC Chairman Julius Genachowski, who has spent much of his tenure promising to deliver more wireless spectrum. The FCC provided Genachowski’s thoughts on the incentive auction proposal via an emailed statement:

“In freeing up spectrum for wireless broadband, incentive auctions will drive faster speeds, greater capacity, and ubiquitous mobile coverage. These are essential ingredients for innovation and leadership in the 21st century economy where smartphones and tablets powered by 4G LTE and Wi-Fi networks are proliferating, and the mobile Internet becomes more important every day. Over the last few years, the U.S. has regained global leadership in mobile innovation – and we must not let up now.”

The chairman will circulate his proposal on Friday to the other four commissioners with the aim of getting those four to approve the notice at the September 28 open meeting. At that point, the almost three years of debate on this idea (it was first formally floated in the National Broadband Plan) will turn into a few months of debate on concrete proposals. So here’s what we know.

The situation

In 2010, the National Broadband Plan suggested the FCC might find up to 120 megahertz of spectrum available for mobile broadband by looking at the 6 MHz channels that broadcasters held and used to deliver UHF channels to viewers. The idea was that the FCC could create some kind of reverse auction that would pay broadcasters to give up this valuable spectrum that the FCC had granted them for free. However, broadcasters, who had just endured the transition from analog broadcasting to digital so the FCC could take some of their previous spectrum and auction it off in 2008 for mobile broadband, were not terribly excited about having to vacate spectrum again.

Here is the spectrum band we’re talking about.

Plus, there were no guarantees that urban broadcasters who had the most valuable spectrum would want to vacate their bands. That meant that the FCC’s plans might free up a lot of spectrum in rural areas where no one particularly needed it.

There were also gripes about paying broadcasters for airwaves that were technically a public good given over to them, and debates on whether there was even a spectrum shortage to begin with. But the most challenging part was no one really knew how to structure a reverse auction that would require the FCC to pay broadcasters for their spectrum before the FCC knew how much carriers would want to buy it for.

The FCC proposal

The FCC’s plan for bridging the two auctions’ information gap is not much clearer today, but we’re getting closer. The FCC official says the agency plans to do a reverse auction first where it would try to get broadcasters to give up the goods. The agency will then quickly repackage the spectrum it gets into nationwide chunks of spectrum that it would then turn around and offer to operators. The goal would be having these processes take place a “few weeks apart” as opposed to months or years.

To do this, the FCC is proposing a means by which broadcasters who want to give up their airwaves will be able to submit their plans to the FCC and get a rapid response on the interest in that spectrum from the FCC based on what the agency is seeing from other broadcasters. The FCC is also proposing guard bands so broadcasters who keep their airwaves won’t have to worry about interference from mobile broadband use in channels next door.

And yes, the FCC is planning to keep some of the spectrum for unlicensed use, which means it would be available for white spaces broadband. It’s unclear how much unlicensed spectrum would be made available, and where it would be since it’s unclear what spectrum will be given up by broadcasters.

The FCC isn’t making predictions about how much spectrum it thinks it may get through this process, but a source with a deep history on the topic said the agency might net between 60 and 80 megahertz if it’s lucky. That’s less than the 120MHz the broadband planned hoped for, but it will still help. Of course, if the spectrum doomsayers are correct, nothing will really ever be enough to meet the demand for mobile broadband.

The sticking points

Our insatiable demand for mobile data isn’t the only issue with this plan. The FCC says it plans to be as transparent as possible about how it will try to repack the broadcast spectrum, but the broadcasting organization NAB says broadcasters are concerned about the cost of moving to a new channel, seeing their audience shrink if it moves to a new frequency band and, yes, interference.

Consumers may also find themselves happier with their cell phone reception, but with digital television channels that keep moving down the dial. Any repacking of the spectrum means channels at the upper end of the UHF band will likely end up moving to create these nationwide blocks.

And Congress wants its cut of these auctions as well, hoping that the FCC can maximize the revenue any auction would bring in to help fill federal coffers. Many of these congressmen probably have visions of the $19.59 billion that the 2008 700 MHz auction raised, but every auction is different, and without knowing what will be on the block it’s hard to come up with any estimates on how much broadcasters may get and how much carriers will shell out.