FCC Chairman Julius Genachowski Announces Proposed Incentive Auctions

In response to the growing need for flexible spectrum, Congress in February of this year as part of The Middle Class Tax Relief and Job Creation Act of 2012 authorized the Federal Communications Commission (“FCC”) to conduct incentive auctions of spectrum voluntarily returned by television broadcasters. The FCC has released a tentative agenda for its September 28 meeting which includes a Notice of Proposed Rulemaking (“NPRM”) addressing such auctions.

Incentive auctions would allow current licensees to contribute unused spectrum for auction in exchange for a portion of the proceeds. FCC Chairman Genachowski said the FCC proposes to “free up a significant amount of unlicensed spectrum for innovative WiFi-like uses, and create the first uniform, national low-band unlicensed spectrum in any country.” Additionally, Genachowski stated that “As smartphones and tablets proliferate, the opportunities to benefit consumers and businesses become clearer every day. In freeing up licensed and unlicensed spectrum for wireless broadband, incentive auctions will drive faster speeds, greater capacity, and ubiquitous mobile coverage. The mobile experience for millions of consumers and small business owners will improve as a result of successful incentive auctions. These are essential ingredients for innovation and leadership in the 21st century economy where smartphones and tablets powered by 4G LTE and Wi-Fi networks are proliferating, and the mobile Internet becomes more important every day.”

The NPRM among other things will seek comment on how to conduct reverse auctions in which licensees would compete to be low bidders to supply spectrum, and forward auctions, in which high bidders compete for licenses to use spectrum.

The Commission has stated that its goals for the incentive auctions are to:

• spur investment and innovation;
• drive economic growth and job creation;
• enhance global competitiveness; and
• benefit consumers.

The draft NPRM’s target date for the auctions is sometime in 2014.