A federal appeals court shot down Tuesday an attempt by a local television provider to guarantee its stations won’t suffer interference when the Federal Communications Commission sells off TV airwaves to wireless carriers in its broadcast incentive auction.
Before the FCC can hand out licenses to wireless bidders including AT&T and Verizon for airwaves being sold by broadcasters like Fox and CBS, the agency will repackage those frequencies for mobile carriers, who will use them to free up space on networks bogged down by video streaming and other high-bandwidth applications.
As the facilitator of the auction the FCC’s rules guarantee full-power stations won’t be at risk of interference as a result of the spectrum shakeup. Low-power regional broadcasters like Mako Communications don’t have the same guarantee, leading the company to challenge the FCC’s decision not to extend protection in the D.C. Circuit Court of Appeals.
Mako argued that violated the Spectrum Act, a law that states nothing should “alter” a low-power television (LPTV) station’s spectrum usage rights. The FCC argued the law does not specifically protect LPTV from interference, and that LPTV is already considered secondary to full-power stations when it comes to using spectrum — an assessment the court agreed with.
“As a general matter, LPTV stations’ secondary status renders them subject to displacement insofar as they cause interference to primary services,” the court wrote in its ruling.
As such, the court said the FCC’s decision not to guarantee LPTV won’t suffer interference does not change their rights.
In a statement reported Tuesday the FCC said it will help low-power stations displaced by the auction to find new channels.
“Today’s court ruling validates the commission’s incentive auction design in light of the Spectrum Act’s goals,” an agency spokesperson said. “The commission values the important role that low-power TV and TV translator stations play in the communities they serve. With that in mind, we have taken — and continue to consider — steps to assist any displaced low power stations to find feasible channels after the close of the auction.”
While Tuesday’s ruling is a victory for the FCC, not everyone at the commission agrees on the issue. Commissioner Ajit Pai, one of the FCC’s two Republicans, has repeatedly raised concerns about interference issues resulting from the auction and the repackaging software and process itself.
“If we are not 100 percent confident that the software will perform flawlessly … we must have the courage to postpone the auction rather than charging ahead and courting disaster,” Pai said last fall before the FCC went ahead with the auction earlier this year. “I realize that the nuts and bolts of IT implementation isn’t a glamorous issue. But it is critically important.”
At the time Pai laid out a number of concerns with Wheeler’s plan for the auction, including a block of spectrum set aside for bidding exclusively by smaller carriers like T-Mobile and Sprint, reserving space for unlicensed spectrum devices on channels used by LPTV broadcasters, and a provision to place some broadcast TV stations in the “duplex gap” — the airwaves that separate mobile data uploads and downloads.
Pai and others warn the move could cause interference problems, and that the possibility itself will drive down bidding on spectrum, reducing the compensation to broadcasters for the airwaves they’re surrendering in the auction.
The first round of bidding wrapped up late Tuesday with carriers and other new entrants into the airwaves market, including Comcast, laying out a total of $22.4 billion for the spectrum being sold by broadcasters.
That’s a sizable shortfall from regulators’ $88.3 billion target price for the spectrum they bought from broadcasters earlier this year, meaning the agency will move on to a second round of bidding with a target goal of selling less spectrum.
The National Association of Broadcasters, a trade group that lost its own legal challenge to the auction rules, said the shortfall suggests the danger of running out of spectrum may not be as severe as wireless carriers previously claimed.
“NAB is surprised by the modest participation by wireless carriers in the first stage of the TV auction,” the group said Wednesday. “Perhaps the notion of a ‘spectrum crisis’ peddled in Washington for the last seven years is not as acute as policymakers were led to believe. We look forward to the second round of the auction where wireless carriers will be afforded another bidding opportunity.”
FCC Chairman Tom Wheeler warned last year wireless carriers were in danger of running out of spectrum by 2020.
