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FCC Releases Tentative Agenda for September 28 Meeting

September 7, 2012. Federal Communications Commission (FCC) released a tentative agenda for its event titled "Open Meeting", scheduled for September 28, 2012. The five Commissioners are scheduled to adopt three notice of proposed rulemakings (NPRMs).

First, the FCC is scheduled to adopt a NPRM related to incentive auctions. Second, the FCC is scheduled to adopt a NPRM regarding "mobile spectrum holdings". Third, the FCC is scheduled to adopt a NPRM regarding its licensing and operating rules for satellite services.

Incentive Auctions. The Congress enacted HR 3630, [LOC | WW], the "Middle Class Tax Relief and Job Creation Act" in February. This bill, among other things, gives the FCC authority to conduct incentive auctions.

An incentive auction provides for the sharing of spectrum auction proceeds with the licensees who voluntarily relinquish that spectrum. It provides a financial incentive for television broadcasters and other licensees to relinquish some of their spectrum. The incentive auction provisions are in Subtitle D, at Sections 6401-6414.

See also, stories titled "House and Senate Negotiators Reach Agreement on Spectrum Legislation", "Summary of Spectrum Bill", and "Reaction to Spectrum Bill" in TLJ Daily E-Mail Alert No. 2,339, February 17, 2012, story titled "House and Senate Pass Spectrum Bill" in TLJ Daily E-Mail Alert No. 2,340, February 18, 2012, and story titled "Obama Signs Spectrum Bill into Law" in TLJ Daily E-Mail Alert No. 2,345, February 23, 2012.

Julius GenachowskiFCC Chairman Julius Genachowski (at left) released a statement on September 7 regarding incentive auctions. However, it contains little information. He wrote that he has, or would, "share a detailed proposal for incentive auctions with my colleagues". He has released no document to the public.

He also wrote that "we must pursue several strategies vigorously: freeing up more spectrum for both licensed use and for unlicensed services".

There was considerable debate in the Congress in 2011 and early 2012 regarding the extent of FCC authority to make relinquished spectrum available for unlicensed use. Genachowski took sides in legislative debates. He had sought much wider authority to allocate spectrum for unlicensed use than the bill allows. See, January 11 speech and story titled "Genachowski Addresses Incentive Auctions and Unlicensed Spectrum" in TLJ Daily E-Mail Alert No. 2,326, January 13, 2012.

Rep. Fred Upton (R-MI), Chairman of the House Commerce Committee (HCC), promptly criticized Genachowski's speech. He stated that "It's time to stop the FCC from engaging in political mischief that will hurt competition and steal money from the taxpayer's coffers. Don't take our word for it -- look at the 2008 auction. The FCC imposed conditions on the C and D blocks that ultimately prevented the D-block from selling and pushed smaller carriers out of the auction. Taxpayers lost somewhere in the neighborhood of $5 billion, and spectrum remains sidelined." See, story titled "Rep. Upton Criticizes Genachowski's Spectrum Speech" in TLJ Daily E-Mail Alert No. 2,328, January 15, 2012.

Allocating relinquished spectrum for unlicensed use would not generate revenue for either taxpayers or broadcasters. Also, it would create disincentives for relinquishing spectrum.

As enacted, the bill, at Section 6407, provides that the FCC may use "relinquished or other spectrum to implement band plans with guard bands". However, "guard bands shall be no larger than is technically reasonable to prevent harmful interference between licensed services outside the guard bands".

Then, Section 6407 provides that the FCC  may permit the use of certain guard bands for unlicensed use, subject to the limitation that it "may not permit any use of a guard band that the Commission determines would cause harmful interference to licensed services".

Genachowski made his January speech at the Consumer Electronics Association's (CEA) annual convention in Las Vegas.

On September 7, the CEA's Julie Kearney stated in a release that the "CEA commends the Commission on the upcoming release of the notice of proposed rulemaking pertaining to voluntary broadcast incentive auctions. The auctions will yield innumerable benefits for American consumers to access wireless broadband and ensure that devices such as smartphones and tablets can continue to connect to those networks." She did not reference unlicensed use.

On September 7 the National Association of Broadcasters' (NAB) Dennis Wharton stated in a release that the "NAB looks forward to working with the FCC and Congress to implement spectrum incentive auction legislation. We have no quarrel with television stations choosing to voluntarily participate in the auction process. Our overriding objective remains the preservation of a vibrant future for free and local TV stations that serve tens of millions of Americans every day with quality entertainment, local news, the most popular sports, and life-saving weather warnings."

Steve Largent, head of the CTIA, stated in a release that "We are very pleased the Chairman and Commissioners are beginning the process to implement the incentive auction provisions". And, "We appreciate that the Commission will take a thoughtful, thorough and efficient approach in this proceeding so the unused and underutilized spectrum is reallocated to its highest and best use in an accelerated timeframe."

Mobile Spectrum Holdings. The FCC's release also states that the FCC is scheduled to adopt a second NPRM that "initiates a review of its policies governing mobile spectrum holdings". This is related to the incentive auctions NPRM.

During the drafting of, and debate over, the incentive auctions bill, Genachowski sought, but failed to obtain, broad authority to limit participantation in the auctions of relinquished spectrum.

Excluding certain companies from participating in these auctions, such as Verizon Wireless and AT&T, or limiting the amount of spectrum that they could acquire, would tend to decrease auction revenues, and the return to both taxpayers and broadcasters, and decrease incentives for broadcasters to relinquish spectrum.

However, Section 6404 of the bill provides that the FCC "may not prevent a person from participating in a system of competitive bidding under this subsection if such person" meet certain enumerated requirements. These requirements are that the bidder "complies with all the auction procedures and other requirements to protect the auction process" and "meets the technical, financial, character, and citizenship qualifications". But, this does not prevent the FCC from adopting and enforcing "rules of general applicability, including rules concerning spectrum aggregation that promote competition". This language is now codified at 47 U.S.C. § 309(j)(17).

This NPRM, the contents of which Chairman Genachowski has not yet disclosed, may propose rules of general applicability concerning spectrum aggregation, but which are directed at limiting spectrum holdings of companies like Verizon Wireless and AT&T. Such rules could limit these companies' participation in the incentive auctions process.

The FCC once imposed CMRS spectrum caps, but phased them out a decade ago. That proceeding was WT Docket No. 01-14.

See, January 23, 2001 NPRM (FCC 01-28) and Report and Order (FCC 01-328).adopted on November 8, 2001, and released on December 18, 2001.

For TLJ coverage of that proceeding, see stories titled: