FCC Spectrum Auction
To free up spectrum space on the airwaves for the growing needs of wireless broadband, the Federal Communications Commission (FCC) is conducting a Broadcast Television Incentive Auction in spring 2016 to reallocate a portion of the spectrum from TV broadcasters to mobile providers.
Owners of commercial and non-commercial TV stations across the nation, including Atlanta Board of Education, as the holder of the broadcast license for WABE 90.1 and PBA30, are being given the opportunity to relinquish the spectrum used by their station in exchange for a payment from the FCC of a portion of proceeds generated from the sale of that spectrum to wireless companies.
Atlanta Board of Education must decide by Jan. 12 whether they will submit an application to participate in the auction process, which is set to begin March 29. Submitting an initial application does not commit the Atlanta Board of Education to participate in the auction in March, but it is a necessary step to preserve that option.
PBA30 continues to remain in operation and community support will continue to be vital. Contributions from viewers have been and will continue to be essential to the long-term health of public broadcasting, so continued support from the community will remain critically important.
Information about the FCC Spectrum Auction is gathered here as a resource for WABE 90.1 and PBA30 members, supporters, viewers and community members.
FREQUENTLY ASKED QUESTIONS
What is the “spectrum auction”?
The Federal Communications Commission (FCC) will conduct a “spectrum auction” in 2016. Spectrum is used to transmit electromagnetic signals for a wide-range of uses, including television broadcasting, cell phones, microwaves, wireless microphones, radio, and navigation equipment, among many others. This means that the federal government will be buying spectrum from television broadcast license holders (in a process called a “Reverse Auction”) and selling purchased spectrum to wireless companies (such as Verizon, AT&T, etc.) so that they can provide broader service to users of mobile and other wireless devices.
There are three separate but related elements of the spectrum auction:
Voluntary Reverse Auction: In a reverse auction, unlike in a traditional (forward) auction, the prices or bids decrease in each round. Thus, while the FCC’s opening bid prices may be significant for certain broadcast license holders, these are the maximum prices that the FCC is willing to pay for the spectrum and are expected to fall significantly during the course of the reverse auction as broadcast license holders compete to sell their spectrum to the FCC. Since this is a voluntary auction, some broadcasters will choose not to participate.
Voluntary Forward Auction: Wireless broadband providers may bid to purchase that spectrum from the FCC in this traditional auction.
Mandatory Nationwide Repack: Once the voluntary auctions are complete, there will be a mandatory nationwide reorganizing of channels, or repacking, to condense the broadcast band. Any station on any channel in any market may be required to relocate to a new frequency within the same band in a process that will take at least three years to complete. The current channel numbers are unlikely to change, and the impact is expected to be minimal to television viewers.
How much will spectrum sellers be paid?
It is not possible to know how much spectrum sellers will be paid. While the reported opening bid prices may be significant because of the nature of a reverse auction, they are the maximum initial bids which are expected to fall significantly during the course of the auction. The final prices that the FCC is paying spectrum sellers will not be made public until the process is complete.
Why is this happening? Aren’t the airwaves “public” property? Why is the government auctioning them off?
Radio frequency spectrum is a natural resource and Congress has given the FCC the responsibility to manage it in the best interest of the American public. In a law passed by Congress called “The Middle Class Tax Relief and Job Creation Act of 2012,” the FCC was given the authority to conduct the spectrum auction in order to better manage and allocate the available spectrum, as a result of the nation’s increased demand for wireless communication services. In effect, the FCC has made a policy decision to reduce the spectrum used by television broadcasters to accommodate the growing need for increased spectrum use by wireless communications providers.
The Reverse Auction opening bid price for PBA30 to fully relinquish its spectrum is listed as approximately $318 million. How was this number determined?
The FCC determined this number based on the demand for spectrum in the markets and the location of the channel in the market - a UHF or VHF, a low-power or a full power station. The opening bid prices are designed to entice stations to participate in the auction. The opening bid price will not be the selling price in most markets, and industry experts forecast that actual selling prices in most markets will be a fraction of the opening bid prices.
Will PBA30 and WABE 90.1 receive a portion of the proceeds from the sale of the spectrum?
No, neither PBA30 nor WABE 90.1 will receive any money. The decision to participate in the auction is decided by the Atlanta Board of Education because they hold the broadcast license for PBA30 and WABE 90.1. In the event there are any proceeds from this auction, they will be given to the Atlanta Board of Education, not Public Broadcasting Atlanta.
Could Atlanta Board of Education get a higher price than that?
No. The "reverse auction," format means prices will go down during each round, a setup designed to give the federal government leverage to get the best deals possible. Prices offered for the PBA30 spectrum usage rights are likely to fall as the reverse auction proceeds. The actual prices that the FCC will pay for the stations are expected to be considerably lower and will depend on how much spectrum the FCC decides it wants to buy in the reverse auction, how many stations participate and how the bidding goes.
If the Atlanta Board of Education does decide to participate in the auction, does that mean PBA30's spectrum will automatically be sold?
No. The decision to participate does not require a spectrum-holder to sell. They would be given the option once the FCC sets the price for spectrum in their market. Many spectrum-holders will likely "test the waters" to see how much their bandwidth is worth and later decide not to sell. Again, an application to participate in the auction does not guarantee the station will be sold. Also, in many markets the FCC may not need to buy any spectrum at all but stations in those markets still received opening bid prices. At this point in time, most expert spectrum auction observers expect that the metropolitan Atlanta market will have little to no transactional activity.
Why are you continuing to ask for financial support for PBA30, when the station may give up its license to broadcast?
Atlanta Board of Education, as the holder of the broadcast license for PBA30 will make the decision whether to give up the television broadcast license. However, an application to participate in the auction does not guarantee that the station will be sold. PBA30 remains in operation and community support will continue to be vital. Contributions from viewers have been and will continue to be essential to the long-term health of public broadcasting, so continued support from the community will remain critically important.
I don’t watch PBA30 over the air via antenna. I have cable (or a satellite service). Will I be affected in any way if Atlanta Board of Education, as the holder of the broadcast license for PBA30 decides to relinquish PBA30’s ability to broadcast?
Probably. Cable and satellite television subscribers most likely will be affected if PBA30 leaves the airwaves. If PBA30 relinquishes its spectrum and is no longer a PBS station, cable and satellite services would no longer be required to include PBA30 in their channel lineup.
Will the viewer notice any noticeable differences or changes in PBA30 throughout the auction process?
Does the FCC Broadcast Television Incentive Auction affect WABE 90.1?
No. The incentive auction only involves TV stations. Any action taken with regard to PBA30 will not involve the license or operation of WABE 90.1 Radio.