The auction presents a once-in-a-lifetime opportunity for broadcasters, but the decision to participate in the reverse auction is wholly voluntary. To facilitate broadcaster participation we are striving for simplicity in designing the reverse auction.
Eligibility: Who Can Participate in the Reverse Auction
As mandated by the Spectrum Act, the Report and Order states that only full power (commercial and non-commercial) and Class A licensees are eligible to participate in the reverse auction. Licensees of LPTV and TV translator stations will not be eligible to participate.
Broadcasters will have four options to participate in the reverse auction, depending on their current channel assignment:
- Bid to relinquish a UHF channel to move to either a high VHF (7 to 13) or low VHF (2 to 6) channel;
- Bid to relinquish a high VHF channel to move to a low VHF channel;
- Bid to relinquish their current channel in order to share a channel with another broadcaster after the auction; or
- Bid to relinquish their license and go off the air.
Each of these options involves different business and strategic tradeoffs and are designed to make the auction accessible to the widest possible range of broadcaster participants. Of course a broadcaster may choose not to participate in the auction and to continue broadcasting on the same band (UHF, high VHF or low VHF), subject to potential channel reassignment resulting from the repacking process.
Reverse Auction Bidding Process
The Commission adopted a descending clock format for the reverse auction. In each bidding round, stations will be offered prices for one or more bid options and will indicate their choices at these prices. The prices offered to each station for options will be adjusted downward as the rounds progress in a way that accounts for the availability of television channels in different bands in the repacking process. “Intra-round bidding” will enable bidders to indicate price levels (between the opening- and closing prices in a round) at which they would like to either choose different bid options or drop out of the auction and remain in their home bands. A station will continue to be offered prices for bid options until the station’s voluntary relinquishment of rights becomes needed to meet the current spectrum clearing target. When all remaining active bidders are needed in this way, the reverse auction for the stage will end. If the final stage rule is satisfied in that stage, then the active bidders are winning bidders, and the price paid to each will be at least as high as the last price it agreed to accept.
Confidentiality of Potential Reverse Auction Bidders
Consistent with the Spectrum Act, the Commission will protect the identity of licensees that apply to participate in the reverse auction. Specifically, the Commission will maintain the confidentiality of information submitted by all licensees that apply to participate until the results of the reverse auction and the repacking process are announced. The Commission will maintain the confidentiality of information from applicants that do not become winning bidders for an additional two years. Confidential information will include licensees’ names, channels, call signs, facility identification numbers, network affiliations, and any other information necessary to protect licensees’ identities.