Final Auction Deadline for Broadcasters; Bidding Doesn't Start Until May
Though Tuesday evening is the final deadline for broadcasters to enter their spectrum in the incentive auction and has been billed by the Incentive Auction Task Force and Chairman Tom Wheeler as the start of the auction for months, no actual bidding is likely to happen for more than a month, according to statements by Chairman Tom Wheeler and IATF officials. The window for broadcasters to tell the FCC what they'd like to happen to their spectrum in the auction -- called the initial commitment window -- opened Monday at 10 a.m. EDT, and will close Tuesday at 6 p.m. Broadcasters that don't make an initial commitment to sell all their spectrum or relocate to VHF by Tuesday's deadline will be repacked, the IATF has said. To give broadcasters a chance to test the sign-up process, the commission made it available for a preview period starting last week.
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“Since the preview window opened on Thursday morning, the system has worked smoothly and applicants were able to log in and test their user credentials,” an IATF spokesman told us via email Monday. Numerous broadcast attorneys also told us their clients had reported no problems with the system. “The initial commitment window opened on time this morning and the system has steadily been accepting commitments throughout the day,” the spokesman said. The FCC has a hotline broadcasters can call if there are issues with the software, but call volume has been low, the spokesman told us.
Despite the narrow time frame and high stakes, few broadcast attorneys are directly assisting their clients with the initial commitment process because of concerns about running afoul of the commission's incentive auction anti-collusion rules, numerous broadcast attorneys told us. The rules bar broadcasters from communicating with each other about their bids or bidding strategies, and the FCC has said an attorney with multiple clients in the incentive auction could be a conduit of bidding information, despite objections from the Federal Communications Bar Association.
To avoid violating the rules, most communications law firms have informed their clients they won't be able to assist with the incentive auction bidding process, broadcast attorneys at numerous firms have told us. That largely precludes the attorneys from assisting with the initial commitment window since that involves clients entering their specific preferences for spectrum relinquishment, which in turn determines how bids will play out. This means many broadcasters likely are entering their initial commitment information themselves, though attorneys told us they are ready to offer assistance.
Though lawyers at several firms told us they are adopting the strategy of absenting themselves from the bidding process, a larger firm with clients in the incentive auction is taking the “Chinese wall” approach, assigning each client's auction business to a particular attorney who's kept isolated from other clients' auction information. That firm is also minimizing its involvement in clients' bidding and bidding strategies, an attorney told us.
IATF will plug the initial commitments made Monday and Tuesday into optimization software that will be used to calculate the initial clearing target for the auction and a band plan, IATF officials have said. The software will designate some stations in areas with a less crowded band as “not needed,” for the auction, and they will be repacked along with broadcasters who chose not to participate, IATF officials told us. The commission is expected to take several weeks to arrive at the initial clearing target, and several more weeks after that to hold mock auctions before real bidding starts, the IATF has said (see 1603110071).