Federal Communications Commission FCC 12-118 Before the Federal Communications Commission Washington, D.C. 20554 In the Matter of ) ) Expanding the Economic and Innovation ) Docket No. 12-268 Opportunities of Spectrum Through Incentive ) Auctions ) NOTICE OF PROPOSED RULEMAKING Adopted: September 28, 2012 Released: October 2, 2012 Comment Date: December 21, 2012 Reply Comment Date: February 19, 2013 By the Commission: Chairman Genachowski and Commissioners McDowell, Clyburn, and Rosenworcel issuing separate statements; Commissioner Pai approving in part, concurring in part and issuing a statement. TABLE OF CONTENTS Heading Paragraph # I. INTRODUCTION.................................................................................................................................. 1 II. BACKGROUND.................................................................................................................................. 11 A. The Current Broadcast Television Bands ...................................................................................... 12 B. Flexible Use Policy, Auctions and Calls for Broadband Spectrum ............................................... 23 C. The Spectrum Act of 2012............................................................................................................. 27 III. PROPOSED AUCTION DESIGN ....................................................................................................... 35 A. Reverse Auction and Broadcaster Repacking................................................................................ 37 B. Forward Auction ............................................................................................................................ 54 C. Integration – Putting the Reverse and Forward Auction Components Together ........................... 66 IV. REVERSE AUCTION—ELIGIBILITY AND BID OPTIONS........................................................... 72 A. Eligibility ....................................................................................................................................... 73 B. Bid Options .................................................................................................................................... 84 V. REPACKING ....................................................................................................................................... 91 VI. FORWARD AUCTION—RECONFIGURING THE UHF BAND................................................... 119 A. Allocations ................................................................................................................................... 119 B. 600 MHz Band Plan..................................................................................................................... 123 C. Technical Rules............................................................................................................................ 185 VII. OTHER SERVICES IN THE UHF BAND...................................................................................... 199 A. Channel 37 Services..................................................................................................................... 199 B. Television Fixed Broadcast Auxiliary Stations, Low Power Auxiliary Stations, and Unlicensed Wireless Microphones............................................................................................... 215 VIII. WHITE SPACE AND UNLICENSED OPERATIONS.............................................................. 227 IX. AUCTION RULES ............................................................................................................................ 240 Federal Communications Commission FCC 12-118 A. Competitive Bidding Process for Reverse Auction—Part 1 New Subpart .................................. 241 B. Competitive Bidding Process for Forward Auction—Modifications to Part 1 Subpart Q........... 289 X. POST-AUCTION ISSUES................................................................................................................. 307 A. UHF Band Transition From Broadcast to Wireless Use.............................................................. 308 B. Payment of Relocation Costs ....................................................................................................... 334 C. Regulatory Issues; Licensing and Operating Rules...................................................................... 355 XI. PROCEDURAL MATTERS.............................................................................................................. 416 A. Ex Parte Presentations ................................................................................................................. 416 B. Comment Period and Filing Procedures ...................................................................................... 418 C. Initial Regulatory Flexibility Analysis......................................................................................... 421 D. Paperwork Reduction Act Analysis ............................................................................................. 422 E. Further Information...................................................................................................................... 423 XII. ORDERING CLAUSES................................................................................................................... 424 APPENDIX A – Proposed Rules APPENDIX B – Initial Regulatory Flexibility Act Analysis APPENDIX C – Auctionomics and Power Auctions Incentive Auction Rules Option and Discussion I. INTRODUCTION 1. In key areas, the United States leads the world in wireless infrastructure and innovation. We are the first country to have 4G Long-Term Evolution (LTE) technology networks at scale; we are the first country to enable unlicensed use of white space spectrum in the television bands; and our mobile applications economy is the envy of the world. But usage of our wireless networks is skyrocketing, dramatically increasing demands on both licensed and unlicensed spectrum—the invisible infrastructure on which all wireless networks depend. Our country faces a major challenge to ensure that the speed, capacity, and accessibility of our wireless networks keeps pace with these demands in the years ahead, so the networks can support the critical economic, public safety, health care, and other activities that increasingly rely on them. Meeting this challenge is essential to continuing U.S. leadership in technological innovation, growing our economy, and maintaining our global competitiveness. 2. Building off of the National Broadband Plan,1 the FCC has worked to free up spectrum for wireless broadband use through traditional approaches such as auctions, including clearing and reallocating government spectrum. At the same time the Commission has removed regulatory and other barriers to the use of spectrum, facilitated the deployment of wireless networks, and enabled more efficient use of spectrum in numerous innovative ways.2 The FCC has also pursued other initiatives designed to facilitate the expansion of our nation’s wireless networks, the improvement of wireless broadband service, and the inclusion of all Americans in the growing wireless broadband environment. These efforts include the Broadband Acceleration Initiative to expand the reach of robust, affordable broadband by easing and expediting access to utility poles, rights of way, and other infrastructure; the modernization and refocusing of the Universal Service Fund and the intercarrier compensation systems to make affordable broadband available to all Americans and accelerate the transition from circuit-switched 1 See Federal Communications Commission, Connecting America: The National Broadband Plan at 88-91 (2010). In the Joint Statement on Broadband, the Commission similarly recognized the need for strategic policies for spectrum, in order to meet current and future needs and promote innovation, investment and competition. Joint Statement on Broadband, GN Docket No. 10-66, 25 FCC Rcd 3420, 3421 (2010). 2 For example, the Commission has launched a rulemaking to convert 40 megahertz of spectrum from satellite to terrestrial use; changed technical rules to accelerate the rollout of LTE in the 800 MHz band; taken meaningful steps to make the WCS band more useable by revising technical rules that have impeded use; and revamped our wireless backhaul rules to lower costs and reflect advances in technology. 2 Federal Communications Commission FCC 12-118 to IP networks; and the establishment of the Mobility Fund to finance the expansion of current-generation or better wireless broadband service into currently unserved areas.3 3. The 2010 National Broadband Plan introduced the idea of incentive auctions as a tool to help meet the Nation’s spectrum needs.4 Incentive auctions are a voluntary, market-based means of repurposing spectrum by encouraging licensees to voluntarily relinquish spectrum usage rights in exchange for a share of the proceeds from an auction of new licenses to use the repurposed spectrum.5 The incentive auction idea is the latest in a series of world-leading spectrum policies pioneered in the U.S., including unlicensed spectrum uses such as WiFi, Bluetooth, near field communication, and other innovations and the original FCC spectrum auctions in the 1990s. On February 22, 2012, Congress authorized the Commission to conduct incentive auctions, and directed that we use this innovative tool for an incentive auction of broadcast television