The auction, which had been mandated two years ago by Congress, is definitely the first one of its kind. The Federal Communications Commission (FCC) is asking the TV stations to let go of their airwaves which would eventually earn them a portion of the sales from the auction. Participating stations have the option to either give up their business totally or enter into "channel share." The latter is a type of arrangement between two stations wherein an agreement to share the same airwaves had been reached. The auction assures that those who are participating are doing it voluntarily.
The FCC plans to sell the airwaves that would be given up by TV stations as a result of the auction. The move is to satisfy the growing demand among users of smartphones and mobile devices that connect to the Internet. It is also part of the administrative goal of President Barack Obama to find more spectrums in order to meet the demand. In the end, the TV stations would have to settle for some compensation.
The FCC will repackage the voluntarily auctioned frequencies and place them in another set of auction with the biddings coming from wireless carriers. This will certainly benefit the latter as they have been incessantly seeking for faster speeds and enhanced services for their devices.
The National Association of Broadcasters (NAB) filed a review petition at the U.S. Court of Appeals for the District of Columbia Circuit. Its members challenged the decision of the FCC to revise its methodology of predicting coverage areas and their corresponding population.
"Under this new methodology, many broadcast licensees, including NAB's members, will lose coverage area and population served during the auction's repacking and reassignment process," stated by the advocacy group for broadcasters in the U.S. in its petition.
According to the report from the Wall Street Journal, the group of broadcasters is worried that the "repacking" effort of the FCC would cause some stations to spend a whopping $500 million as payment for the expenses incurred.
However, the NAB remains open for negotiation. "The FCC could potentially convince the NAB to drop its lawsuit by increasing the $1.75 billion set aside to compensate broadcasters for repacking, and making more of an effort to ensure that stations won't see their coverage areas significantly reduced," said [subscription required] by a broadcast industry source.
If plans push through, the FCC's auction is deemed to become the nation's largest. In the 2008 sale, total bids had reached over $19 billion wherein 80 percent came from AT&T and Verizon. One important spectrum lined up for selling next year includes bandwidths that will feature greater distance coverage and buildings penetration which is very suitable for smartphones.
