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:: 02/04/2012

United States - FCC appoints team to study spectrum auction methodologies

The plan to auction frequencies currently held by broadcasters to mobile telecom operators is facing difficulties as broadcasters appear reluctant to part with their frequencies.

The plan calls for broadcasters to voluntarily return frequencies to the Federal Communications Commission (FCC) who in turn will auction these available frequencies to mobile telecom operators. In exchange, broadcasters are to receive part of the proceeds from the auction.

However, broadcasters appear reluctant to relinquish their frequencies, especially as new opportunities around mobile broadcast television are emerging. In addition, it is unclear how much revenue the auction could generate for broadcasters.

The process is expected to take five to eight years. A reverse auction will first determine the frequencies available from broadcasters and wireless telecom operators will then be able to bid for these frequencies in an auction.

As a first step, the FCC has appointed the task force to study the methodologies to use for the spectrum auction. Its work could last between 2-3 years.

As part of the legislation approved by Congress allowed for these auctions, the FCC cannot force broadcasters to be relocated from UHF to VHF bands.

According to the NAB, the process will cause blackouts for at least 210 broadcasters in 210 regions. In addition, the re-locating of broadcasters could cost up to $2.5 billion.

Source: Bloomberg