The Sale of the Century? How the FCC Plans to Sell Off Part of the TV Band

[Commentary] In the Public Safety and Spectrum Act of 2012 (enacted as Title VI of the Middle Class Tax Relief and Job Creation Act of 2012, Public Law 112-96), Congress authorized the Federal Communications Commission to recover and auction a significant portion of the spectrum currently used by television broadcasters. This will be -- by far -- the most complex auction process ever undertaken anywhere, for any commodity, and poses unprecedented legal, political, engineering and technological questions. The auction is currently scheduled to take place in early 2016. The FCC has now promulgated rules for implementing the sale, and broadcasters are beginning to consider whether they should choose to participate. In addition, the National Association of Broadcasters has appealed several key aspects of the FCC’s new rules in a case which is receiving expedited consideration by the U.S. Court of Appeals for the District of Columbia Circuit. Interest in the forthcoming auction (actually, as explained below, there will be two related auctions) has surged in the wake of the FCC’s “AWS 3” auction, which began in November, 2014. That auction is for much less desirable mid-band spectrum than the low-band TV spectrum that will be at issue in the new auction. Even so, by the end of the year, the AWS 3 auction blew past the FCC’s $10.6 billion minimum “reserve” price, and bidding topped $44 billion after 139 bidding rounds. Given these developments, now is a good time to explore the history of spectrum auctions and the stunningly complicated process the FCC intends to employ. Bear in mind that this discussion is necessarily oversimplified.