The Federal Communications Commission's incentive spectrum auction is scheduled for 2015, but there will be nothing to sell if broadcasters don't give up their unused spectrum.
As a result, the FCC is sending information packets to TV stations, hoping to sway them with estimates of how much money they could potentially make by selling spectrum. Later this fall, FCC staff and representatives from investment bank Greenhill & Co., which prepared the information packets, will go the extra mile—literally—when they take a road trip around the country to encourage broadcaster participation.
The incentive-based spectrum auction, which was intended to take place this year but delayed to mid-2015, will allow broadcasters that are sitting on unused spectrum to voluntarily auction it off to wireless carriers. A portion of the proceeds go to the stations, and the rest to the government.
Wireless carriers are champing at the bit to get their hands on that spectrum in order to accommodate customers with bandwidth-intense gadgets.
There have been roadblocks, though. In August, the National Association of Broadcasters (NAB) filed a suit challenging the auction, which NAB says could hurt TV stations that choose not to participate.
In a Wednesday statement, NAB CEO Gordon Smith said in "it is clear the FCC staff put a great deal of work into developing this piece on reverse auction pricing, which is a key component to the auction. NAB commends the FCC for their efforts to get the ball rolling in this area. We will work with our members to sort through this comprehensive report as they do their own homework on the upcoming auction opportunity."
"I believe the incentive auction is an unparalleled business opportunity for broadcasters," FCC chairman Tom Wheeler said in a letter to station owners. "I hope you give careful consideration to the economic potential that it offers you."
"The auction offers potentially significant financial benefits for broadcasters in more than just the largest markets," Wheeler wrote.
Estimates are based on a perfect world, in which broadcasters sell optimum amounts of spectrum, and the FCC raises even more optimal amounts of money, Reuters reported. All values consider the number of people served by each TV station, and how much its coverage overlaps or interferes with other broadcasters.