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The Incentive Auction is really two auctions: a Reverse Auction and a Forward Auction. The Reverse Auction is where eligible TV licensees will have the opportunity to voluntarily return some or all of their spectrum usage rights in exchange for a share of the proceeds from the Forward Auction. The Forward Auction is where the FCC will sell new licenses to use the repurposed spectrum for mobile broadband services.
At the conclusion of the Reverse Auction, the FCC will attempt a complex repacking of the TV stations into the spectrum below TV channel 30 (566 MHz). The success of this repacking in freeing up spectrum for the Forward Auction will depend on how many TV stations decide to relinquish their spectrum.
One interesting aspect of this auction is that the ultimate band plan in any given market will actually depend on how many TV stations are repacked in and around the market. Thus, band plans may likely be different across markets. These band plan incongruities set up a potential for interference between TV stations and new wireless licensees. The FCC calls this interference potential an “impairment.”
The FCC has actually modeled this repacking effort considering how many TV stations have indicated their intention to participate in the Reverse Auction. One of the FCC’s goals here was to determine the potential number of impairments so Forward Auction participants can develop informed bidding strategies. While the FCC has tried to minimize impairments, we won’t know exactly how many there are or where they are until after the Reverse Auction is over and repacking has been completed.
Forward Auction participants may want to model the potential impact of impairments on their bidding and deployment strategies before, during and after the Forward Auction, especially as TV stations are repacked. Comsearch’s TVclear services and software tools can determine impairment impacts and help Forward Auction participants develop informed strategies.
The Broadcast Incentive Auction is the most complex spectrum auction ever conducted. Nonetheless, interference impairments can possibly cause buyer’s remorse. Knowing the location and magnitude of impairments will help Forward Auction participants bid smartly.