U.S. Senate committee mulls 600 MHz auction issues

The U.S. Federal Communications Commission (FCC) must do more to entice broadcasters to take part in an “incentive auction” of their broadcast airwaves if it wants to reallocate that spectrum for mobile use, the head of a U.S. broadcast coalition told American senators Tuesday. “The FCC has not attracted the critical mass of spectrum sellers that will be necessary to have a successful auction,” Preston Padden, executive director of Washington-based Expanding Opportunities for Broadcasters Coalition, said during a meeting of the Senate’s commerce, science and transportation committee to discuss the FCC’s planned auction of 600 MHz spectrum. “Without sufficient TV spectrum sellers, there will be no auction.” In Canada and the United States, the 600 MHz spectrum band is used for over-the-air television signals on channels 32 through 51. Like the 700 MHz band — most of which in Canada and the U.S. has been freed up for mobile use — the 600 MHz band is ideal for carrying wireless signals over longer distances, and through buildings and walls. The FCC said last year it would hold an “incentive auction” to buy back 600 MHz spectrum licences from participating over-the-air broadcasters and to resell those licences to mobile providers. In a spectrum outlook document released in March, Industry Canada identified the band as one the department would consider making available to mobile providers over the next four years as it tries to make another 300 to 415 MHz of spectrum available for mobile wireless. Due to a 2008 bilateral agreement with the U.S., Industry Canada said any plans to repurpose the 600 MHz frequencies will depend on their use in the U.S. and the outcome of the American incentive auction. Industry Minister James Moore’s office did not provide comments by deadline Tuesday when asked whether his department would consider an incentive auction as is being planned in the U.S. Padden said during the committee hearing Tuesday that the FCC should give broadcasters regulatory flexibility to keep their stations on the air after the incentive auction. Among other things, he said the FCC should allow broadcasters to share their spectrum through multiplexing agreements that would see multiple broadcasters transmit their signals over the 6 MHz of spectrum in a single broadcaster's licence. “If the FCC hopes to recover significant broadcast spectrum, it must permit, and even encourage, innovative, out-of-the-box channel-sharing proposals by TV stations,” he said of multiplexing, which was made possible when broadcasters converted their old bandwidth-intensive analog signals to digital. “Stations should be free to relocate in their market, to change their city of licence, and to share a channel with any other station in their market provided the result is to free up spectrum for the auction.” The FCC, Padden added, must also make more information about the auction process available to U.S. broadcasters. He said the 70 broadcasters his organization represents cannot decide whether to participate in the auction until they know roughly how much the FCC would pay for their licences, when payments would be made and how quickly they would be required to vacate their airwaves. “The sooner the FCC can make this information available, the sooner more stations will be seriously able to evaluate auction participation,” Padden said. Gary Epstein, chair of the FCC's incentive auction task force and special adviser to the FCC chairman, said at the hearing that the commission will use a “reverse auction” format to buy back the broadcasters' spectrum licences. This means the commission will offer a “very high” price for those licences at first — which it would not necessarily end up paying — and reduce the amount offered in subsequent rounds to determine the lowest price broadcasters would accept for their spectrum. Epstein said that initial bidding price would be based on “a number of factors,” including how much money the commission believes it can receive from mobile providers when it resells those licences. “The key thing that Mr. Padden is talking about, and I agree with him, is what price do we start at,” Epstein said. “What is the price that we first offer to broadcasters to make this attractive?” The Wire Report reported in March that Canadian mobile providers' future access to 600 MHz spectrum will likely depend on the FCC's ability to buy back spectrum licences from a sufficient number of U.S. broadcasters. Canada's spectrum band plans are typically aligned with those in the U.S., allowing Canadian spectrum users to utilize equipment made for the American market and reducing signal interference near shared border areas where U.S. and Canadian spectrum signals can overlap. Epstein said Tuesday that the FCC has held multiple meetings with Canadian officials in the last six months to coordinate spectrum use along border areas. At one of those meetings, he said, the countries reached a “great breakthrough” to help solve a number of technical issues. “We recognize the need for certainty with respect to both the Canadian and Mexican borders,” he said. FCC Chairman Tom Wheeler — who took office in November — said in a blog post last week that the FCC's 600 MHz incentive auction will now take place in mid-2015, after it was previously expected to take place in 2014. Industry Canada and Canadian mobile providers are currently preparing for the department's auction of 700 MHz spectrum, which is scheduled to start on Jan. 14. Incumbent carriers BCE Inc., Rogers Communications Inc. and Telus Corp. launched public campaigns this summer against Industry Canada's 700 MHz auction rules that limit large providers from acquiring more than a single block of the best 700 MHz spectrum in each region of the country, while allowing smaller competitors to acquire up to two of the four best blocks in each region. Those rules were designed to support the government’s objective of having a fourth wireless competitor to compete against the incumbents in each region by ensuring that a company other than the incumbents can secure at least one of the four "prime" blocks in each market. Joan Marsh, vice-president of federal regulatory affairs for AT&T Inc. — the second-largest U.S. wireless provider — said at the Senate committee hearing on Tuesday that any restriction on how much 600 MHz spectrum U.S. providers can acquire should be applied equally to all carriers. “If there is to be a limit, we think it has to be applied neutrally and fairly to all participants,” she said. — With reporting by Nicholas Kyonka at nkyonka@thewirereport.ca and editing by Derek Abma at dabma@thewirereport.ca

U.S. Senate committee mulls 600 MHz auction issues

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U.S. Senate committee mulls 600 MHz auction issues

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