The details for an incentive auction are a key part of FCC chairman Tom Wheeler’s efforts to get enough stations to participate. Success of the auction depends on enough channels voluntarily deciding to give up their spectrum and, if they choose, go dark, share with another station or move to the VHF band.
Wheeler wrote in a blog post that the auction is “a once-in-a-lifetime opportunity to expand the benefits of mobile wireless coverage and competition to consumers across the nation — particularly consumers in rural areas — offering more choices of wireless providers, lower prices and higher quality mobile services.”
The biggest impact will be on many stations in the UHF band, where the FCC plans to clear away each broadcasters’ 6 MHz allotments of spectrum and assemble contiguous spectrum to create uplink and downlink bands for wireless services. Wireless firms will bid on 5 MHz blocks of spectrum.
The purpose of the auction is to meet the increasing demand for wireless devices, such as smartphones, with the so-called “low-band” spectrum. That spectrum held by broadcasters is regarded as the most valuable because it can increase the reach of mobile networks over long distances at far less cost.
The transition, however, is a complicated task. The auction plan includes two parts: A “reverse auction” in which broadcasters will compete against one another to give up some or all of their spectrum. The price will start high and then descend, with stations given the option of dropping out at any point.
The FCC will then hold a “forward auction” in which wireless firms will bid to buy spectrum relinquished by broadcasters.
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