FCC Chairman Wheeler Outlines Path to a Successful Incentive Auction

By Peter Bernstein December 06, 2013

In previous comments about new Federal Communications Commission (FCC) Chairman Tom Wheeler, I have noted that one of the areas he takes most seriously is the role of the Commission plays in its stewardship of the U.S. radio spectrum.  This is a scarce and enormously/increasingly valuable public resource which we cannot create more of and hence must mind judiciously.  While this has always been the case, as the world goes increasingly wireless-centric and there seems to be no limits to the ingenuity of people seeking to generate value from our airwaves, the trick is in getting the policy right public and private interests are best served.

With this in mind, and after joking at a dinner only last night about how his predecessor did not get much comment back on his blog, new FCC Chairman published an item that has already lit up industry comments in a piece he titled, The Path to a Successful Incentive Auction.   

I will not reproduce the post in its entirety.  In fact, if this is an area of deep concern, you might wish to visit it and leave some comments.

What Wheeler is advising is that because of what is at stake and the complexity of the process, it is time to take a deep dive into the process for getting this right the first time, and follow a reasoned path for doing so in a time frame that he believes makes sense for all involved. In short, take this off a fast track.

Getting the policy and technology right

In his blog opening Wheeler noted, “I am confident in the Commission’s ability to make the appropriate policy decisions.  I am also confident that the policy challenges are only part of the picture – we must also get the enabling technology right… Having spent most of the last decade helping technology-based companies from the ground up, I know the incredible challenge of taking a cutting-edge product from concept to market on deadline.  That is exactly what we are doing with the incentive auction.”

The Chairman then articulated the guiding principles behind the proposed process for fulfilling the Commission’s instructions from Congress regarding the incentive auction.  “First and foremost, we absolutely must make fact-based policy decisions in an open and transparent manner.  Beyond the policy issues, however, we must also exhaustively test the operating systems and the software necessary to conduct the world’s first-of-a kind incentive auction.  This includes ensuring that such systems are user-friendly to both broadcasters and wireless carriers who will participate.”  

The bottom line was his assertion that, “I believe we can conduct a successful auction in the middle of 2015.  To achieve that goal, there will be a number of important milestones along the way.  The Task Force will provide more details about the timeline and milestones in a presentation at the January 2014 Commission meeting.”

He added that, “This plan includes presenting policy recommendations in a proposed Report and Order for the Commission’s consideration early next year.  The Commission would then vote on the R&O in the spring.”

In lock step with all of this will be a determination of the rules of the road for how the auction will be conducted. Translated he is contemplating that in the second half of 2014 the Incentive Auction Task  Force plans to release an Auction Comment Public Notice and a Procedures Public Notice that will provide additional details and seek comment on how the specific parts of the auction will actually function.

Likely mindful of what is going on regarding government processes these day, Wheeler stated, “Getting the right policy and procedures for the auction is only half the job.  For the incentive auction to be a success, we must also ensure that the operating systems and software to run it work from the moment the first bid is placed, until the final broadcast station is relocated or “repacked.” 

Like good wine, good policy can take time. 

The blog for the next several days is likely to be a place you may wish to bookmark.  As the first comment from Mike Gravino noted, the LPTV community thinks the Chairman is proceeding appropriately. He even had a recommendation: 

Ask Congress to make us auction eligible and we can help generate an additional $5 billion in auction funds, and make room for unlicensed services. Our industry faces over $1 Billion in out-of-pocket costs since we will not be compensated under the current rules. The 250 networks and 2500 digital channels we air of local and diverse content are threatened unless we get this right.  

What he is highlighting obviously is how much is at stake, and LPTV is just one of several important communities have a lot riding on the outcome of the process. In effect the comments also re-enforce what the Chairman is saying about getting policy to align with technology. 

The comments on the blog are no doubt going to be read closely. Admittedly, there is going to be plenty of time and opportunities to weigh-in, but there is certainly nothing bad about getting an early start.  As Wheeler emphasized this is complicated, and making sure everyone is heard from is an important part of getting it right.  

Edited by Stefania Viscusi
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