It is now official – the FCC has been granted authority to conduct incentive auctions in the upper portion of the television band to make way for more wireless broadband service. President Barack Obama has signed the H.R. 3630 Middle Class Tax Relief and Job Creation Act of 2012, of which spectrum auctions is a part.
The major part of the bill is the extension of a tax cut that is coming out of payroll taxes which feed into Social Security funds. That particular measure was in dispute as the 2011 legislative session was winding to a close and both sides essentially punted the matter two months forward to February 2012.
The spectrum auction portion of the bill is seen as a way to offset some of the costs of the entire legislative package. After funding relocation expenses for broadcasters forced to move due to channel repacking necessitated to clear spectrum, and to pay for establishment of a national interoperable public safety network, the auctions are expected to bring in $15B for the federal government.
Broadcast have the option of turning in their license in exchange for a share of the auction proceeds. Participation in the auction is entirely voluntary, and it is as yet unclear just how many broadcasters will choose to do so, and where that volunteer participation might come from.
RBR-TVBR observation: The questions now become how and when. There are a lot of moving parts here, and we suspect we’ll be following this story for some time to come.