Incentive Auction Progress Report

When Chairman Wheeler arrived at the Commission last November, he described the incentive auction as taking a cutting edge concept to market on deadline. At that time he wrote in a blog post, “managing a complex undertaking such as this also requires an ongoing commitment to continuously and honestly assess its readiness and its project strategy. ”

Now is a great time to take stock of where we have been and where we are going. Additionally it is time to carefully consider and recalibrate our proposed timing for the beginning of the incentive auction.

Following the Commission’s adoption of the Report and Order in May, we have made consistent progress implementing the incentive auction. Of particular note, the Commission has followed through on commitments made in the Report and Order and initiated rule-makings to address the operations of important solutions affected by the incentive auction, which includes unlicensed white spaces devices, wireless microphones and Low Power Television. And just last week, the Commission addressed several broadcast and wireless interference issues.

We are ongoing our march toward implementing the incentive auction. Importantly, we anticipate the Commission will vote in the Comment PN before the end of the year. The Comment PN may propose and seek comment on the detailed directions for how the public sale will be conducted, including the methodology for use to establish opening bids for the invert and forward auctions; how to specify “impaired” markets subject to interference; and the components of the final stage rule. In the coming weeks, the Commission will also consider a notice of proposed rule-making to preserve one vacant TV funnel post-auction for use by unlicensed devices.

Crafting the right policy decisions and designing a story two-sided auction are important, but all those decisions by themselves are not sufficient to ensure the auction’s success. We also need broadcasters to participate. Earlier this month, we sent every auction-eligible place owner an information package prepared for that FCC by the investment banking company Greenhill and Co. The information deal explains this unparalleled business opportunity and included high-end estimated compensation ideals for every DMA generated by FCC staff. We will continue our conversation with broadcasters in town hall conversations and confidential meetings with person station owners in markets round the country.

Amidst this multi-front progress, however , there are undeniable impediments to our efforts to implement a successful auction. As Chairman Wheeler indicated several weeks ago, the courtroom challenges to the auction rules by some broadcasters have introduced uncertainty. Earlier this week, the court released a briefing schedule in which the last briefs are not due until past due January 2015. Oral arguments follows at a later date yet to be determined, using a decision not likely until mid-2015. We are confident we will prevail in courtroom, but given the reality of that timetable, the complexity of designing and implementing the auction, and the requirement for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the public sale in the fall of 2015 and starting the auction in early 2016. Despite this brief delay, we stay focused on the path to successfully applying the incentive auction.

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