Earlier this month, the Commission adopted the Incentive Auction Bidding Procedures Public Notice, which sets March 29, 2016 as the start date of the first-ever incentive auction. This fall, staff will release detailed information on the application process and announce the reverse auction opening bid prices. We will then start taking applications. Today we lay out the roadmap for these critical next steps and outline the actions that will occur after the applications are submitted.
Application Procedures Public Notice. In early fall, we plan to release the Application Procedures Public Notice. It will describe the nuts and bolts of the auction application process and post-auction procedures, including the opening dates for the application filing windows, the filing deadline, the schedule for mock auctions, and the information required on the auction application forms.
Opening Bid Prices – Reverse Auction. We will publicly announce the reverse auction opening bid prices for all broadcasters no later than 60 days before the deadline for reverse auction applications established in the Application Procedures Public Notice. The opening bid prices will be calculated using the formula already adopted by the Commission in the Bidding Procedures Public Notice, applying the final TV-to-TV constraints and interference-free population data for each station that we will also publicly release.
Opening Bid Prices – Forward Auction. For the forward auction, the Bidding Procedures Public Notice established the upfront payment and opening bid prices per bidding unit, described how bidding units are calculated for each Partial Economic Are (PEA), and explained when upfront payments would be due. This fall we will release the final table of bidding units in each PEA so that potential applicants can plan for making their upfront payments.
Commencing the Auction. After we release the information described above, we will open the windows for applications to participate in the reverse and forward auction; the application windows will close before the end of the year. After the application deadline, FCC staff will review the applications for completeness and accuracy. Broadcasters will have the opportunity to make minor modifications or corrections necessary to complete their applications, and then, by March 29, 2016, each participating broadcaster that has completed an application must commit to its preferred initial bid option. That commitment will bind the broadcaster to relinquishing its spectrum usage rights at the opening price applicable to its preferred option. If, in the auction itself, the price offered to the broadcaster drops, the broadcaster is no longer bound to relinquish its spectrum unless it elects to remain in the auction at the lower price.
We thought it would also be helpful to outline the steps that will occur after the applications are filed and the broadcasters make their initial commitments.
Determination of the Initial Clearing Target. After broadcasters make their initial commitments, the auction system will determine the initial clearing target and associated band plan. Reverse auction participants will have the opportunity to participate in a mock auction, and then the reverse auction bidding rounds will begin.
Forward auction applicants with complete applications that wish to become qualified to bid will be required to make their upfront payments after the clearing target and band plan are announced. After upfront payments are made, qualified forward auction bidders will also have an opportunity to participate in a mock auction. The first round of the forward auction will commence no sooner than 15 business days after we release the list of qualified forward auction bidders.
Webinars and Workshops. We recognize that this is a great deal of information, especially for entities that have not participated in an FCC auction before. Staff will therefore be offering three types of training this fall, even before applications are due: workshops, webinars and an interactive on-line tutorial. We will also be providing a technical hotline during the application and bidding processes. We started this process last week with our webinar on channel sharing. Shortly after Labor Day we will be offering a webinar on the Bidding Procedures Public Notice just adopted by the Commission. Later in the fall, after the Application Procedures Public Notice is released, we will hold two workshops: one each on the reverse and forward auctions. These workshops will go through the application process as well as provide overviews of the reverse and forward bidding systems, and they will be posted on the LEARN website for reference. We will also be offering on-line interactive auction tutorials, which will walk potential reverse and forward participants through the application and bidding processes. The interactive auction tutorial has been a valuable tool used by the Commission since 2009.
We look forward to working with you to give you the information you need to make the incentive auction a success.