[Federal Register Volume 79, Number 158 (Friday, August 15, 2014)]
[Rules and Regulations]
[Pages 48441-48545]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2014-18423]



[[Page 48441]]

Vol. 79

Friday,

No. 158

August 15, 2014

Part III





Federal Communications Commission





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47 CFR Parts 0, 1, 2, et al.





 Expanding the Economic and Innovation Opportunities of Spectrum 
Through Incentive Auctions; Final Rule

Federal Register / Vol. 79, No. 158 / Friday, August 15, 2014 / Rules 
and Regulations

[[Page 48442]]


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FEDERAL COMMUNICATIONS COMMISSION

47 CFR Parts 0, 1, 2, 15, 27, 73, and 74

[GN Docket No. 12-268; FCC 14-50]


Expanding the Economic and Innovation Opportunities of Spectrum 
Through Incentive Auctions

AGENCY: Federal Communications Commission.

ACTION: Final rule.

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SUMMARY: In this document the Commission adopts rules to implement the 
broadcast television spectrum incentive auction. Our central objective 
in designing this incentive auction is to harness the economics of 
demand for spectrum in order to allow market forces to determine its 
highest and best use, which will benefit consumers of 
telecommunications services.

DATES: Effective October 14, 2014 except for amendments to Sec. Sec.  
1.2105(a)(2)(xii) and (c)(6); 1.2204(a), (c), (d)(3), and (d)(5); 
1.2205(c) and (d); 1.2209; 2.1033(c)(19)(iii); 15.713(b)(2)(iv); 
15.713(h)(10); 27.14(k) and (t)(6); 27.17(c); 27.19(b) and (c); 
73.3700(b)(1)(i) through (v), (b)(2)(i) and (ii), (b)(3), (b)(4)(i) and 
(ii), and (b)(5); 73.3700(c); 73.3700(d); 73.3700(e)(2) through (6); 
73.3700(f); 73.3700(g); 73.3700(h)(4) and (6); 74.602(h)(5)(ii) and 
(iii); and 74.802(b)(2), which contain new or modified information 
collection requirements that are not effective until approved by the 
Office of Management and Budget. The Federal Communications Commission 
will publish a document in the Federal Register announcing the 
effective date for those sections.

FOR FURTHER INFORMATION CONTACT: Paul Malmud, Wireless 
Telecommunications Bureau, Broadband Division, at (201) 418-0006 or by 
email to Paul.Malmud@fcc.gov. For additional information concerning the 
Paperwork Reduction Act information collection requirements contained 
in this document, contact Cathy Williams at (202) 418-2918, or via the 
Internet at PRA@fcc.gov.

SUPPLEMENTARY INFORMATION: The full text of this document is available 
for inspection and copying during normal business hours in the FCC 
Reference Information Center, Room CY-A257, 445 12th Street SW., 
Washington, DC 20554. The complete text may be purchased from the 
Commission's duplicating contractor, Best Copy and Printing, Inc. 
(BCPI), Portals II, 445 12th Street SW., Room CY-B402, Washington, DC 
20554, (202) 488-5300, facsimile (202) 488-5563, or via email at 
fcc@bcpiweb.com. The complete text is also available on the 
Commission's Web site at http://transition.fcc.gov/Daily_Releases/Daily_Business/2014/db0602/FCC-14-50A1.pdf. Alternative formats 
(computer diskette, large print, audio cassette, and Braille) are 
available by contacting Brian Millin at (202) 418-7426, TTY (202) 418-
7365, or via email to bmillin@fcc.gov.

I. Introduction

    1. This Order (See Expanding the Economic and Innovation 
Opportunities of Spectrum Through Incentive Auctions, FCC 14-50, GN 
Docket No. 12-268 (rel. June 2, 2014)), adopts rules to implement the 
broadcast television spectrum incentive auction, which the Federal 
Communications Commission (``FCC'' or ``Commission'') proposed in 
Expanding the Economic and Innovation Opportunities of Spectrum Through 
Incentive Auctions 77 FR 69934, Nov. 21, 2012 (``NPRM''). The incentive 
auction is a new tool authorized by Congress to help the Commission 
meet the Nation's accelerating spectrum needs as set forth in the 
Middle Class Tax Relief and Job Creation Act of 2012, Public Law 112-
96, sections 6402, 6403, 125 Stat. 156 (2012) (``Spectrum Act'').

II. The Reorganized UHF Band

A. Band Plan for the New 600 MHz Band

1. All-Paired, Down From 51 Band Plan
    2. We adopt the 600 MHz Band Plan with paired uplink and downlink 
bands, which will enhance the value of the 600 MHz Band, consistent 
with our central goal for the incentive auction. Commenters 
overwhelmingly support this approach. The few commenters who oppose 
using paired spectrum blocks support adopting a TDD-only band plan, 
which does not require separate uplink and downlink spectrum bands. We 
are unpersuaded that the benefits these commenters assert for allowing 
TDD technology in the 600 MHz Band--broad global adoption, improved 
spectrum efficiency, and more dynamic use of communications channels--
are sufficiently advantageous to adopt an unpaired, TDD framework for 
the 600 MHz Band. For example, although TDD operations do not require a 
duplex gap, TDD operations use five to 10 percent of their spectrum 
capacity as overhead for time domain duplex guard time intervals, and 
therefore, are not necessarily more efficient than FDD operations. 
Further, T-Mobile states that TDD has link budget constraints, 
resulting in less uplink coverage at the cell edge than an FDD system. 
Based on our examination of the record, FDD is better suited for the 
600 MHz Band at the present time in light of current technology, the 
Band's propagation characteristics, and potential interference issues 
present in the Band. Therefore, we decline to adopt a TDD-based band 
plan.
    3. We also decline to allow a mix of TDD and FDD use in the 600 MHz 
Band, because, as several commenters indicate, allowing both FDD and 
TDD operations in the 600 MHz Band would require additional guard bands 
and increase the potential for harmful interference both within and 
outside the Band. We emphasize that our determination regarding the 
suitability of an unpaired, TDD framework is limited to the decision 
before us. Different characteristics of other bands, or advances in 
technology, may make an unpaired, TDD-compatible framework appropriate 
in other circumstances.
    4. Although most commenters support our decision to offer paired 
spectrum blocks, the record diverges on how to offer spectrum blocks if 
we can repurpose more than 84 megahertz, i.e., how to offer 600 MHz 
licenses below channel 37. Some commenters suggest that it would be 
beneficial to offer downlink-only blocks because of the asymmetrical 
nature of broadband traffic patterns. Other commenters note that 
offering downlink-only blocks creates an easy way to accommodate market 
variation (i.e., offering different amounts of spectrum in different 
geographic areas) by varying the amount of downlink offered in a given 
market. Although we recognize that broadband traffic patterns are 
currently asymmetrical and offering downlink-only blocks is one way to 
accommodate market variation, we agree with other commenters that the 
benefits of offering paired spectrum blocks are greater than the 
benefits of offering downlink-only blocks in the 600 MHz Band. Further, 
although some argue that offering downlink-only blocks would mitigate 
antenna performance issues by creating two separate bands, such an 
approach would reduce the overall spectrum utility as a result of the 
necessary frequency separation.
    5. In order to repurpose this spectrum, we must enhance the 
spectrum's value to potential bidders, as well as serve the public 
interest, and we find that offering paired blocks rather than downlink-
only blocks best achieves these goals. To effectively use 600 MHz 
downlink-only blocks, a provider must not only have available uplink 
spectrum to pair it with, but that spectrum ideally should be below 1 
GHz in order to take advantage of the superior propagation

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characteristics of the 600 MHz Band that allow for increased coverage. 
At the same time, some commenters state that aggregating 600 MHz 
spectrum with another band below 1 GHz presents technical challenges; 
consequently, in practice, wireless providers may choose to aggregate 
600 MHz downlink-only blocks with a high spectrum band, thus negating 
some of the coverage benefits of the 600 MHz Band that would be 
realized from using paired 600 MHz blocks. Further, we agree with 
commenters that argue that paired blocks are more valuable than 
downlink-only blocks to new entrants. Recent auctions also suggest that 
paired spectrum is more valuable to bidders than unpaired blocks.
    6. We also agree with commenters that assert that offering 
downlink-only blocks in the 600 MHz auction may undermine competition. 
Because providers must pair downlink-only blocks with existing spectrum 
holdings, new entrants would not be able to use downlink-only blocks, 
thus limiting their utility. In contrast, offering paired spectrum 
blocks will benefit all potential 600 MHz Band licensees. We also agree 
with commenters that assert that paired blocks will facilitate the 
deployment of networks by smaller carriers and new entrants by allowing 
them to obtain much-needed low frequency, paired spectrum.
    7. Further, offering downlink-only blocks would further complicate 
the auction design without a commensurate benefit. As explained above, 
downlink-only blocks are less valuable than paired blocks to bidders, 
and offering both paired and unpaired blocks would introduce additional 
differences among licenses in the forward auction and increase the 
amount of time the auction takes to close. As discussed in the NPRM, 
the Commission expressed the desire to offer generic blocks in order to 
reduce the time and, therefore, the cost, of bidder participation.
    8. Finally, our all-paired band plan generally has nationally 
consistent blocks and guard bands, which will promote interoperability. 
In contrast, offering downlink-only blocks could exacerbate 
interoperability concerns by separating the 600 MHz Band into two 
bands. If we license both unpaired and paired blocks, we would expect 
that the industry standards body would create separate bands for the 
paired blocks and unpaired blocks, as it has done previously. If the 
600 MHz Band were split into two separate bands, then some devices 
could support part, but not all, of the Band. Further, US Cellular 
raises concerns over the potential for wireless carriers using 
downlink-only blocks to configure their networks so as to create 
barriers to roaming. Limiting the auction to paired blocks will help to 
ameliorate these concerns. It will also promote international 
harmonization, and in particular, should help to address cross-border 
issues with Canada and Mexico.
    9. ``Down from 51'' Approach. We conclude that the ``Down from 51'' 
approach we adopt, with contiguous uplink and downlink bands starting 
at channel 51, will provide greater technical certainty because of its 
technical advantages over other options and, therefore, will enhance 
the value of the 600 MHz Band for bidders and serve the public 
interest. In particular, a contiguous band plan will reduce the antenna 
bandwidth for 600 MHz devices, which in turn will reduce the cost and 
complexity of such devices. As a result, we decline to adopt any of the 
band plans in which the uplink and downlink bands are ``split'' (the 
uplink and downlink bands are not adjacent to one another) because the 
antenna bandwidth would be much greater.
    10. Further, by placing the 600 MHz uplink band next to the 700 MHz 
uplink band and adopting generally consistent technical rules for the 
600 MHz and 700 MHz Bands, we improve spectrum efficiency. This 
continuity should also speed deployment of the 600 MHz Band and make it 
easier to develop devices for it. Further, placing the uplink pass band 
at the upper end of the 600 MHz Band limits the potential effects of 
both harmonic interference and intermodulation interference. Starting 
the 600 MHz uplink band at channel 51 also clears television operations 
out of channel 51, which should help spur deployment of the 700 MHz 
lower A Block. This approach will provide greater certainty to Wireless 
Medical Telemetry Service (``WMTS'') operators regarding their 
operating environment as well, and will likely result in greater 
spectrum efficiency than placing uplink operations adjacent to channel 
37. This approach also simplifies the incentive auction design, which 
is critical to its overall success. We therefore adopt the ``Down from 
51'' approach and decline to adopt the ``Down from 51 Reversed'' band 
plan, in which the downlink band would begin after a guard band at 
channel 51 (698 MHz), followed by a duplex gap, and then the uplink 
band.
    11. Very few commenters criticize the Down from 51 approach that we 
adopt in our 600 MHz Band Plan. DISH complains that the Down from 51 
band plans that commenters propose limit paired spectrum to the portion 
of the 600 MHz Band above channel 37, thereby restricting ``the amount 
of spectrum realistically available for smaller operators.'' The 
approach we are adopting, however, involves paired spectrum only, 
including below channel 37, so it increases the amount of spectrum 
available for all wireless providers. We decline to adopt J. Pavlica's 
proposal to first license to wireless broadband providers the VHF 
channels in the 54-72 MHz and the 174-216 MHz bands (channels 2, 3, 4, 
7, 8, 9, 10, 11, 12, and 13). UHF spectrum above 300 MHz is better 
suited for wireless broadband service because of its propagation 
characteristics as well as its shorter wavelengths, which allow for 
smaller radio components including antennas and filters. In addition, 
the Spectrum Act limits the Commission's ability to repack the VHF 
channels, which would hamper our ability to repack efficiently if we 
were to adopt Pavlica's band plan.
2. 5+5 MHz, Interchangeable Spectrum Blocks
    12. We adopt the proposal to license in five megahertz blocks, 
which commenters overwhelmingly support, because these ``building 
blocks'' will allow for the greatest amount of flexibility and 
efficiency in the 600 MHz Band Plan. Specifically, we find that five 
megahertz blocks: (1) Are the most compatible with current and emerging 
technologies; (2) may be easily aggregated to form larger blocks; (3) 
will maximize the number of licensed blocks in each market; and (4) 
will allow for diverse participation in the auction.
    13. We agree with commenters that five megahertz building blocks 
are most compatible with current wireless technologies. For example, 
numerous commenters state that five megahertz building blocks are most 
compatible with several current and emerging wireless broadband 
technologies, including LTE, LTE-Advanced, High Speed Packet Access + 
(``HSPA+''), and W-CDMA. Further, because many current wireless 
broadband technologies operate with five megahertz blocks or blocks 
that are multiples of five megahertz, this block size facilitates 
aggregation. Commenters also support our view that five megahertz 
building blocks will maximize the number of licensed blocks in each 
market. Finally, licensing in five megahertz building blocks will allow 
auction participation by small, midsize, regional, and national 
carriers. As Leap notes, using the smaller five megahertz bandwidth 
blocks will promote flexibility and allow auction participation by 
diverse carriers, particularly smaller carriers who may not need such 
large swaths of spectrum.

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    14. We decline to license the 600 MHz spectrum using six megahertz 
blocks, a proposal which no commenters support, and which several 
commenters oppose. Using six megahertz blocks would strand spectrum and 
reduce the number of new 600 MHz licenses because most FDD technologies 
support five megahertz blocks. Similarly, using six megahertz blocks 
might lead to inefficient use of the spectrum as each six megahertz 
block would typically accommodate only one active five megahertz LTE 
channel. Converting six megahertz channels into 5+5 megahertz 600 MHz 
licenses could, in contrast, create extra blocks to license. As 
explained further below, because we adopt a 600 MHz Band Plan with 
paired uplink and downlink bands, we also decline to adopt Sprint's 
proposal to license the spectrum using ten megahertz blocks to 
accommodate its band plan proposal for TDD operations.
    15. We also adopt the proposal to incorporate ``remainder'' 
spectrum, i.e., any excess spectrum remaining after converting six 
megahertz television channels to paired, 5+5 megahertz 600 MHz 
licenses, into the 600 MHz Band guard bands to help prevent harmful 
interference between licensed services. A majority of commenters 
supports this approach. As discussed below, we find that including 
these remainders in the guard bands is the best approach to support a 
straightforward auction design and help bolster innovation and 
investment by unlicensed devices in the guard band spectrum. We agree 
with Google and Microsoft that ``[s]oliciting separate bids for the 
remaining small spectrum slivers in the simultaneous forward and 
reverse auction will introduce needless complexity to the auction 
process.''
    16. In our 600 MHz Band Plan, we create interchangeable, 
``generic'' \1\ categories of spectrum blocks by establishing guard 
bands and technical rules to ensure a like operating environment among 
different blocks.
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    \1\ In referring to ``generic licenses'' we are not referring to 
the actual licenses that will be assigned to winning bidders, but to 
standardized blocks of spectrum which will be used to represent 
quantities of licenses for a time during the bidding process. We 
emphasize that licensees will ultimately be assigned a license with 
a specific frequency assignment, and to the extent that bidders 
desire a specific frequency to meet their particular business plans, 
winning bidders will have the opportunity to bid for specific 
frequency blocks before they are assigned their licenses.
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    17. Creating spectrum blocks that are as functionally and 
technically interchangeable as possible enhances substitutability among 
blocks. Offering interchangeable spectrum blocks allows us to conduct 
bidding for generic blocks, assigning specific frequencies later, which 
will speed up the forward auction bidding process. Commenters generally 
support the proposal to offer interchangeable blocks but emphasize the 
importance of making them truly interchangeable. Some commenters 
suggest that we group the spectrum blocks into different classes and 
treat each class as a separate category. As explained below, we adopt 
rules that will allow us to group generic blocks into separate 
categories of licenses for purposes of the forward auction bidding.
    18. We also conclude that it is important for wireless providers to 
be able to aggregate 600 MHz Band spectrum blocks. The ability to 
aggregate spectrum by obtaining multiple spectrum blocks in the same 
service area, or licenses in multiple service areas, affords potential 
bidders significant flexibility to meet their coverage and capacity 
needs in accordance with their business plans. Commenters 
overwhelmingly support allowing licensees to aggregate spectrum blocks. 
Specifically, they encourage us to create an auction process that 
allows bidders to aggregate contiguous frequency blocks within a 
service area or across geographic areas using a variety of auction 
design mechanisms, such as assignment round rules. Under our rules, 
licensees will be able to aggregate 600 MHz Band spectrum in the 
forward auction, as well as after the auction. As a result of these 
rules, wireless providers have the ability to aggregate spectrum to 
meet their business needs.
3. Geographic Area Licensing
    19. We adopt the proposal to implement a geographic licensing 
approach. We conclude that a geographic licensing approach is well-
suited for the types of fixed and mobile services that will likely be 
deployed in this band. In addition, geographic area licensing is 
consistent with the licensing approach adopted for similar spectrum 
bands that support mobile broadband services.
    20. Further, we adopt Partial Economic Areas (``PEAs''), which are 
a combination of Metropolitan Statistical Areas (``MSAs'') and Rural 
Statistical Areas (``RSAs'') (collectively MSAs and RSAs are referred 
to as Cellular Market Areas (``CMAs'')), as the service area for the 
600 MHz Band licenses. PEAs offer a compromise between Economic Areas 
(``EAs'') and CMAs because they are smaller than EAs, yet ``nest'' (or 
fit) within EAs, and can be easily aggregated into larger areas, such 
as Major Economic Areas (``MEAs'') and Regional Economic Areas 
(``REAs'' or ``REAGs''). And like CMAs, PEAs divide urban and rural 
areas into separate service areas. In short, this approach will 
encourage entry by providers that contemplate offering wireless 
broadband service on a localized basis, yet at the same time will not 
preclude carriers that plan to provide service on a much larger 
geographic scale. As a result, licensing by PEAs will best promote 
entry into the market by the broadest range of potential wireless 
service providers without unduly complicating the auction. As CCA 
notes, PEAs ``address concerns regarding the unusual complexity of this 
particular auction while also retaining many of the benefits of small 
license areas.''
    21. Commenters agree that PEAs should: (1) Nest within EAs; (2) 
reduce the number of service areas (as compared to the 734 CMAs); (3) 
reflect Metropolitan Statistical Areas (``MSAs''); and (4) be 
constructed from counties. CCA, NTCA, and RWA argue in favor of using 
the MSA boundaries that the Commission uses for its current CMA 
boundaries, updated with 2010 U.S. Census data for each county, because 
these boundaries have been ``employed in numerous previous auctions, 
including Auctions 73 (700 MHz), 78 (AWS-1), and 92 (Lower 700 MHz).'' 
On the other hand, Verizon argues that we should adopt its proposal, 
which uses more recent MSAs, because they are ``a much more accurate 
division of rural and urban areas.'' (See Letter from Tamara Preiss, 
Vice President, Verizon, to Marlene H. Dortch, Secretary, FCC, GN 
Docket No. 12-268 (filed Mar. 20, 2014) (Verizon PEA Proposal))
    22. We adopt the PEA boundaries contained in the Joint PEA Proposal 
(See Letters from C. Sean Spivey, Assistant General Counsel for CCA, 
Jill Canfield, Assistant General Counsel for NTCA, Caressa Bennet, 
General Counsel for RWA, and John A. Prendergast, Counsel to Blooston 
Rural Carriers, to Marlene H. Dortch, Secretary, FCC, GN Docket No. 12-
268 (filed Mar. 11, 2014 and Mar. 20, 2014) (Joint PEA Proposal)). This 
approach will promote the simplicity and speed of the incentive 
auction, as well as our competitive goals. Specifically, the Joint PEA 
Proposal encourages broad participation by utilizing the MSA boundaries 
that the Commission currently uses. Because these boundaries may more 
closely fit many wireless providers' existing footprints, they should 
provide a greater opportunity for wireless providers to acquire 
spectrum licenses in their service areas. As Blooston notes, the

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Verizon PEA Proposal has ``little in common with geographic areas where 
rural and competitive carriers currently offer wireless service.'' In 
addition, Blooston argues that using the MSAs in the Joint PEA Proposal 
could increase service to rural areas as compared to Verizon's 
proposal. Further, while the Joint PEA Proposal provides service areas 
small enough for smaller carriers to support, the number of total 
service areas is low enough to reduce the time necessary to complete 
the incentive auction. With respect to larger carriers, the Joint PEA 
Proposal ``nests'' within the EAs so it may facilitate spectrum 
aggregation during the auction and in the secondary market.
    23. We decline to adopt the Verizon PEA Proposal. First, rather 
than defining the boundaries for all PEAs, Verizon only defines those 
areas relating to MSAs. Verizon clearly intended to provide the 
Commission with flexibility to consider a range of alternatives with 
respect to rural areas. However, implementing Verizon's PEA proposal, 
while respecting general principles of nesting within EAs and limiting 
the number of licenses in the auction, would create inefficient service 
areas for non-MSA-based service areas. Further, adopting the Verizon 
PEA Proposal may diminish competitive carrier participation in the 
forward auction. We disagree with Verizon that adopting the Joint PEA 
Proposal will lead to outdated service areas that are not based on 
objective criteria. The Joint PEA Proposal creates PEA service areas by 
utilizing 2010 U.S. Census population and county boundary data; 
consequently, it takes into account current population data for the 
counties that are included in each PEA. The PEA boundaries in the Joint 
PEA Proposal also are based on objective criteria. We further decline 
to adopt the Verizon Alternative PEA Proposal, which modifies the Joint 
PEA Proposal ``by adding specified counties to the PEAs representing 
some of the top markets.'' (See Letter from Tamara Preiss, Vice 
President, Verizon, to Marlene H. Dortch, Secretary, FCC, GN Docket No. 
12-268 (filed Apr. 29, 2014)). Verizon's proposed modifications to the 
Joint PEA Proposal also have the potential to diminish competitive 
carrier participation in the forward auction.
    24. Although most commenters support PEAs as an alternative or 
compromise solution, the nationwide wireless carriers prefer EAs as the 
license size for the 600 MHz Band, and the smaller and/or rural 
carriers prefer CMAs. We decline to adopt EAs or CMAs as the licensing 
scheme for the 600 MHz Band. As discussed above, we need to create 
interchangeable spectrum blocks in order to permit substitutability 
among the spectrum blocks (i.e., ``generic blocks'') in the forward 
auction. To accomplish this goal, we can adopt only one license size 
for the entire 600 MHz Band and cannot offer a mix of license sizes as 
we have done in previous auctions. Under the PEA approach, there are 
416 service areas, which is significantly fewer than the 734 CMA 
service areas, but more than the 176 EAs. This will reduce the exposure 
risk to the nationwide carriers as compared to CMAs. In addition, PEAs 
nest into EAs, MEAs, and REAGs, so that nationwide carriers can 
aggregate licenses to create the service area they desire, allowing 
them to take advantage of economies of scale. PEAs separate out the 
urban and rural areas, which should provide for greater auction 
participation by rural providers and allow them to bid on a geographic 
area license that better matches their service area.
    25. We also decline to adopt broadcast Designated Market Areas 
(``DMAs''), nationwide, REAG, or MEA licensing approaches. Some 
commenters suggest that the Commission consider matching licensing 
areas to broadcast DMAs to simplify auction procedures by aligning the 
geographic areas of the forward and reverse auctions. We agree with 
commenters that assert that DMAs are not appropriate because they do 
not match wireless service footprints or existing FCC wireless service 
area designations. Further, we find that DMAs, like EAs, do not 
sufficiently address the needs of smaller and rural wireless providers, 
given the number of licenses we would make available. The Commission 
also sought comment on using nationwide and REAG service areas, but no 
commenters support using these service areas, and some commenters 
actively oppose them. T-Mobile recommends that the Commission license 
by MEAs--a service area size larger than EAs--because the economically 
efficient size of wireless service is substantially larger than 
individual EAs, and MEAs will reduce transaction costs and help 
wireless companies achieve economies of scale. T-Mobile notes that 
smaller licenses, such as PEAs, are manageable and would not create a 
significant exposure risk under certain conditions. For the reasons 
discussed above, using smaller, PEA service areas strikes the 
appropriate balance and will allow both smaller and larger wireless 
carriers to obtain licenses that best align with their respective 
business plans.
    26. Licensing Outside the Continental United States. The Commission 
sought comment on licensing of the 600 MHz Band outside the continental 
United States and in the Gulf of Mexico. For Alaska, Copper Valley 
Wireless supports licensing Alaska on a CMA basis. RWA (formerly RTG) 
initially recommended that we license using Alaska Boroughs, which 
divide the state based on population density, and in any case, use 
service areas no larger than CMAs. Subsequently, RWA (along with CCA, 
NTCA, and Blooston) filed the Joint PEA Proposal, which proposes to 
divide Alaska into four PEAs. Recognizing that Alaska faces uniquely 
challenging operating conditions for deploying and operating networks, 
adopting the Joint PEA Proposal endorsed by smaller and rural carrier 
associations should best address these concerns. The Alaskan PEA 
boundaries closely approximate the CMA boundaries in Alaska that 
providers support. We note that to the extent bidders are interested in 
providing service in Alaska using smaller service areas than PEAs, they 
may use both pre- and post-auction mechanisms (such as bidding as a 
consortium and/or partitioning spectrum in a service area) to create 
the specific area they wish to serve.
    27. For the Gulf of Mexico, we will follow the established policy 
and license the Gulf as a separate license that will be comprised of 
the water area of the Gulf of Mexico starting 12 nautical miles from 
the U.S. Gulf Coast and extending outward. Similarly, we will license 
Guam, the Northern Mariana Islands, Puerto Rico, the United States 
Virgin Islands, and American Samoa as we have in previous auctions, 
which is consistent with the Joint PEA Proposal.
    28. Statutory Requirements. We conclude that our action satisfies 
the Spectrum Act requirement that the Commission consider assigning 
licenses that cover geographic areas of a variety of different sizes. 
Based on the extensive record developed in this proceeding, we have 
carefully considered assigning licenses using a variety of different 
geographic area sizes. As stated above, however, we cannot offer a mix 
of license sizes as we have done in previous auctions without 
endangering our goal of repurposing spectrum through this auction: 
Using one license size (PEAs) is essential to creating interchangeable 
spectrum blocks, which in turn are critical elements of the 600 MHz 
Band Plan developed to promote a successful incentive auction. We note 
that various mechanisms are available to carriers that wish to serve 
larger or smaller geographic areas.
    29. We also conclude that licensing the 600 MHz Band on a PEA basis 
is

[[Page 48446]]

consistent with the requirements of section 309(j) because it will 
promote spectrum opportunities for carriers of different sizes, 
including small businesses and rural telephone companies. Just as 
larger carriers can aggregate EAs into larger geographic areas, PEAs 
are small enough to allow bidders to acquire a limited coverage area--
often only a few counties--which should enable small businesses and 
rural carriers to compete with larger carriers in these areas. Further, 
if bidders want to acquire licenses for smaller geographic areas, they 
can make use of the partitioning and disaggregation rules. Although the 
use of smaller geographic service areas, such as CMAs, could 
potentially encourage participation by smaller providers and support 
greater variation in the amount of repurposed spectrum from area to 
area, on balance offering licenses for a large number of very small 
geographic service areas would be inconsistent with our auction design 
goals of simplicity and speed. First, we must use fewer service areas 
because the time necessary to close the incentive auction increases 
dramatically as the number of licenses increases. As discussed above, 
we are designing the forward auction for speed. Further, more service 
areas could complicate potential bidders' efforts to plan for, and 
participate in, the auction for related licenses, potentially affecting 
the success of the auction. More service areas could also complicate 
subsequent service deployment.
4. Market Variation
    30. The 600 MHz Band Plan we adopt can accommodate market variation 
in order to avoid restricting the amount of repurposed spectrum that is 
available in most areas nationwide. We intend to offer a uniform number 
of 600 MHz spectrum licenses in most markets across the country, but 
the 600 MHz Band Plan will enable us to offer some impaired spectrum 
blocks, or alternatively, fewer spectrum blocks, in constrained markets 
where less spectrum is available. We find that accommodating market 
variation is necessary. If the 600 MHz Band Plan could not accommodate 
some market variation, we would be forced to limit the amount of 
spectrum offered across the nation to what is available in the most 
constrained market (the ``least common denominator''), even if more 
spectrum could be made available in the vast majority of the country. 
By allowing for market variation in our 600 MHz Band Plan, we can 
ensure that broadcasters have the opportunity to participate in the 
reverse auction in markets where interest is high. As a result, more 
spectrum can be made available nationwide in the forward auction.
    31. We recognize that there are certain advantages to having a 
generally consistent band plan. In particular, limiting the amount of 
market variation will limit the amount of potential co- and adjacent 
channel interference between television and wireless services in nearby 
areas (``inter-service interference''). Furthermore, limiting the 
amount of variation will help licensees achieve economies of scale when 
deploying their 600 MHz networks. Therefore, we will accommodate market 
variation to a limited extent only. In no case will we offer more 
spectrum in an area than the amount we decide to offer in most markets 
nationwide. Rather, we will offer the same amount of spectrum 
nationwide in all areas where sufficient spectrum is available. In 
constrained markets where less spectrum is available, we will offer 
impaired blocks or fewer blocks than we offer in most markets 
nationwide.
    32. The decision to accommodate market variation raises a number of 
issues, including how to prevent inter-service interference consistent 
with the requirements of the Spectrum Act, how much market variation to 
accommodate under different spectrum recovery scenarios, where to place 
television stations in the 600 MHz Band if necessary in constrained 
markets, and whether and how to offer impaired spectrum blocks in the 
forward auction. Here, we explain the process by which we will resolve 
these issues and establish rules and auction procedures related to 
inter-service interference. Specifically, following this Order, we plan 
to issue an order that establishes the methodology for preventing 
inter-service interference. That methodology will govern post-auction 
co- or adjacent-channel operation of television and wireless services, 
including operation of new 600 MHz licensees in these areas (i.e., 
additional rules for licensees that hold impaired 600 MHz licenses). We 
will issue that order concurrent with issuing the Incentive Auction 
Comment Public Notice (``Comment PN'') inviting comment on final, 
specific auction procedures. This approach will ensure that potential 
bidders in both the forward and reverse auctions have a clear 
understanding about how we will protect against inter-service 
interference in the 600 MHz Band, and have an opportunity to comment on 
how such protection should be taken into consideration in the auction 
process.
    33. The Comment PN will seek comment on aspects of market variation 
and inter-service interference that affect the incentive auction, such 
as how much market variation to accommodate under different spectrum 
recovery scenarios, where to place television stations in the 600 MHz 
Band in constrained markets, if necessary, and whether and how to 
auction impaired spectrum blocks. We will resolve these issues in the 
Incentive Auction Procedures Public Notice (``Procedures PN''). The 
approach we adopt will appropriately balance the costs and benefits of 
having a nationwide band plan versus accommodating market variation.
    34. Although we defer establishing the methodology by which we will 
prevent inter-service interference so that we can do so based on a 
fully developed record with meaningful public input, we provide 
guidance on several matters in this Order. First, to prevent inter-
service interference to television stations, 600 MHz licensees with 
impaired licenses may be required to operate within smaller boundaries 
than the entire area for which they hold a license. We will provide 
forward auction bidders with sufficient information both before and 
after the incentive auction to determine whether they are bidding on, 
or hold, an impaired license. Licensees with impaired licenses will be 
limited to operation within the boundaries permitted under the inter-
service interference rules we adopt (``permitted boundaries''). Thus, 
for example, licensees with impaired licenses will be allowed to 
operate at the power and out-of-band emission (``OOBE'') limits 
authorized by our technical rules only to the permitted boundaries of 
the impaired licenses, even if the actual boundaries of their license 
areas extend further. Likewise, such licensees will be required to meet 
the build-out requirements only for the area they are permitted to 
serve within each license area.
    35. Second, television stations operating on a co- or adjacent 
channel to a new 600 MHz licensee in a nearby market will be limited in 
their ability to expand their facilities following the incentive 
auction. In these markets, some broadcasters will be operating adjacent 
to or co-channel to wireless licensees. Such television licensees will 
not be permitted to expand their noise-limited service contours if 
doing so would increase the potential for interference to a wireless 
licensee's service area. We recognize that there may be extraordinary 
circumstances beyond the control of a television licensee in which it 
must involuntarily relocate its facilities or cannot replicate its 
service area on its new channel after

[[Page 48447]]

the repacking process without expanding its contour in the direction of 
the wireless license area. Because this type of modification would 
affect both the television licensee and the wireless licensee, we 
expect these cases will need to be evaluated on a case-by-case basis, 
and will carefully consider requests for waiver of our rules in such 
situations. We encourage television and wireless licensees to work 
cooperatively to find an equitable solution should this situation 
arise.
5. Guard Bands
    36. As permitted by section 6407(a), we incorporate guard bands 
into our 600 MHz Band Plan to prevent harmful interference between 
licensed services. Commenters strongly support the use of such guard 
bands. We adopt a guard band between television and wireless operations 
that ranges from seven megahertz to 11 megahertz, depending on the 
amount of spectrum cleared, as discussed below. We adopt a uniform 
duplex gap of 11 megahertz for every clearing scenario, and uniform 
three megahertz guard bands to protect against interference between 
licensed WMTS services on channel 37 and adjacent wireless services. 
The Spectrum Act specifically authorizes the FCC to implement band 
plans with guard bands, subject to a ``technically reasonable'' 
restriction. We interpret the statute to affirm the Commission's 
discretion to employ guard bands in exercising its spectrum management 
authority. Establishing these guard bands not only protects against 
harmful interference between the 600 MHz service and adjacent licensed 
services, but also helps to ensure that the 600 MHz spectrum blocks 
that we offer in the forward auction are as interchangeable as 
possible, consistent with our auction goals. Guard bands also will 
bolster innovation and investment by unlicensed devices. In that 
regard, section 6407(c) of the Spectrum Act specifically authorizes 
``the use of such guard bands for unlicensed use.''
    37. As discussed above, the incentive auction presents the unique 
challenge of not knowing in advance how much spectrum will be 
repurposed, and the 600 MHz Band Plan we adopt is therefore flexible 
enough to accommodate different spectrum recovery scenarios. The guard 
bands are tailored to the technical properties of the 600 MHz Band 
under each scenario. In some scenarios, converting six megahertz 
television channels to paired five megahertz blocks would leave 
``remainders'' of spectrum smaller than six megahertz. Auctioning these 
remainders would be inconsistent with our decision to license the 600 
MHz Band in paired five megahertz spectrum blocks, and would needlessly 
complicate the auction design. Accordingly, such remainders are 
incorporated into the guard bands. As a result, the guard band between 
television and 600 MHz downlink varies in size to some extent under 
different spectrum recovery scenarios.
    38. Guard band size is subject to the statutory ``technically 
reasonable'' restriction we address below. Importantly, it also is 
limited by our goals for the incentive auction. The statute requires 
that the forward auction proceeds cover the costs of incentive payments 
to clear broadcasters from the 600 MHz Band and other identified costs. 
The amount of spectrum available to generate such proceeds decreases 
with increases in guard band size. In other words, the bigger the guard 
bands, the less spectrum we can offer for sale in the forward auction. 
Alternatively, we could seek to repurpose more spectrum, but that would 
require clearing more broadcasters, increasing the costs of incentive 
payments without increasing the amount of spectrum available in the 
forward auction to generate the necessary proceeds. Thus, in sizing the 
guard bands, we must be mindful of the objective of repurposing 
spectrum for new, flexible uses, which can be fulfilled only if the 
forward auction generates sufficient proceeds. Decreases in the amount 
of licensed spectrum available in the forward auction also may 
undermine competition among licensed providers in the 600 MHz Band, 
another important policy objective. The guard bands we establish in the 
600 MHz Band Plan factor in all of these considerations.
    39. The guard bands meet the statutory requirement that guard bands 
be ``no larger than is technically reasonable to prevent harmful 
interference between licensed services outside the guard bands.'' We 
interpret ``harmful interference'' consistent with our rules, which 
define harmful interference as interference that ``seriously degrades, 
obstructs, or repeatedly interrupts a radiocommunication service.'' 
Courts have held that the use of the statutory term ``reasonable'' 
``opens a rather large area for the free play of agency discretion.'' 
In contrast, the term ``necessary'' has been read to refer to something 
``required to achieve a desired goal.'' In that regard, we reject 
suggestions that the statute requires the Commission to restrict guard 
bands to the minimum size necessary to prevent harmful interference. 
Congress knows how to draft provisions of this kind, and did not use 
such language in section 6407. Rather, it left determination of the 
appropriate size of the guard bands to prevent harmful interference to 
the Commission's ``reasonable'' technical judgment. Establishing 
``technically reasonable'' guard bands is thus not only a matter that 
Congress left to the Commission's discretion, but also the type of 
predictive judgment that lies at the core of the agency's expertise.
    40. The record supports our conclusion that the guard bands we 
adopt are technically reasonable to prevent harmful interference. With 
respect to the guard band between television and wireless operations, 
which may be from seven to 11 megahertz depending on the spectrum 
recovery scenario, most commenters support a size within that range. 
With regard to the duplex gap, which is 11 megahertz, a number of 
device manufacturers and wireless carriers support a size of 10 to 12 
megahertz. Incorporating the ``remainder'' spectrum into the guard band 
between television and wireless operations enhances the protection 
against harmful interference to licensed services. The three megahertz 
guard band in our Band Plan between WMTS on channel 37 and 600 MHz 
operations likewise is supported by examination of the record.
    41. Guard bands employ frequency separation to protect against 
harmful interference between licensed services outside the guard bands; 
the degree of protection generally increases with the amount of 
separation. The extent to which frequency separation reduces the 
potential for interference between a transmitter and a receiver can be 
measured by a well-established relationship among transmitted power 
spectral density, receiver selectivity, and frequency separation 
between transmitter and receiver. In the case of television and the 600 
MHz downlink, the two specific interference cases are a television 
transmitter to a mobile broadband device, and a mobile broadband base 
station to a television receiver. Frequency dependent rejection 
(``FDR'') values for these two cases at different degrees of frequency 
separation show significant differences in likely interference. Taken 
together, the results of these two interference cases corroborate our 
decision that the technically reasonable guard band size between 
television and the 600 MHz downlink is seven to 11 megahertz, depending 
on the particular band plan scenario.
    42. Transmit and receive filters often contribute significantly to 
interference protection, and accordingly we also

[[Page 48448]]

consider the capabilities of mobile device filters in the case of 
television and the 600 MHz downlink. The transition band, or separation 
needed for significant filter rejection, can be as small as seven 
megahertz with reasonable cost, complexity, and size, but increasing 
the transition band size up to 11 megahertz reduces the filter cost, 
complexity, and size and enables a greater variety of filter 
technologies to be considered. Consideration of this determination 
together with our FDR analysis confirms that a guard band size between 
television and wireless operations of seven to 11 megahertz is 
technically reasonable.
    43. With respect to the duplex gap, many FDD technologies, 
including FD-LTE, allow simultaneous transmission and reception. 
Because the transmitter and receiver are co-located, however, there is 
a potential for self-interference (i.e., harmful interference within 
the device). For this reason, the FDD device contains a receive and a 
transmit filter designed to operate together to reduce the likelihood 
of such interference. The two filters depend on frequency separation, 
often referred to as the ``duplex gap,'' to operate properly. Factors 
that affect the impact of frequency separation are the transmitter's 
Out of Band Emissions (``OOBE'') and filter capability. With regard to 
the former, a duplex gap of up to 11 megahertz, depending on the 
spectrum recovery scenario, is reasonable to prevent third order 
intermodulation products adjacent to the transmit signal from 
overlapping the frequency region of the receive signal. With regard to 
filter capability, in order to be as large as the achievable transition 
band, and considering the high rejection needed to prevent self-
interference, the duplex gap should be at least 11 megahertz. 
Consideration of these two factors together confirms that the duplex 
gap in our 600 MHz Band Plan, which is 11 megahertz, is technically 
reasonable to prevent harmful interference.
    44. We reject arguments that the Commission should establish larger 
guard bands to facilitate their use by unlicensed devices. For the 
reasons discussed above, doing so would threaten our ability to meet 
our goals in the incentive auction. Moreover, guard bands larger than 
those incorporated in our 600 MHz Band Plan would not satisfy the 
requirements of section 6407(b). The statutory ``technically 
reasonable'' restriction was a compromise between one legislative 
proposal that would have required all repurposed spectrum to be 
licensed and other proposals that would have designated or reallocated 
repurposed spectrum specifically for unlicensed use. That compromise 
permits the establishment of guard bands, and the use of such guard 
bands for unlicensed use, but requires that the guard bands be no 
larger than the Commission determines is technically reasonable for the 
specific purpose of preventing harmful interference between licensed 
services outside the guard bands. Thus, we reject suggestions that 
section 6407(c) implicitly requires us to size guard bands to 
facilitate unlicensed use without regard to their effect in preventing 
harmful interference. Such arguments would effectively negate 
Congress's express directive in section 6407(b) regarding ``size of 
guard bands.'' We also reject NCTA's argument that the duplex gap is 
not a ``guard band'' and, therefore, need not be sized in accordance 
with section 6407(b).
6. Band Plan Technical Considerations
a. Pass Band Size and Mobile Filter Considerations
    45. The 600 MHz Band Plan we adopt has at most a 60 megahertz pass 
band size, which can be accommodated by using multiple filters. The 
specific size of the pass band for the 600 MHz Band Plan depends on the 
amount of spectrum we can ultimately make available in the forward 
auction. Based on the results of our technical analysis, we agree with 
the commenters that assert that the maximum pass band size for current 
technology is roughly four percent of the center frequency for a single 
filter. However, we also agree with commenters who point out that this 
need not limit the 600 MHz Band Plan pass band size, as multiple 
duplexers can be used. Therefore, filter pass band size is not a limit 
on the pass band size for our 600 MHz Band Plan.
b. Mobile Antenna Considerations
    46. We will not limit the amount of paired spectrum we make 
available because of mobile antenna concerns. We agree with Ericsson, 
T-Mobile and others that although more paired spectrum in a single band 
decreases antenna performance to some extent, it is better nonetheless 
to make more paired spectrum available. For example, the propagation of 
the 600 MHz Band is such that even if repurposing a large amount of 
spectrum has a coverage impact, the coverage would still be as good as 
the 700 or 800 MHz Bands. The relatively small potential costs of 
degradation in antenna performance are outweighed by the utility of 
repurposing spectrum. Further, these issues can be addressed using a 
tunable antenna or other antenna technologies. Therefore, we will not 
limit the amount of paired spectrum we make available because of mobile 
antenna concerns.
c. Intermodulation Interference
    47. We will not limit the amount of spectrum available in the 
forward auction based on intermodulation interference concerns. We find 
that with appropriate frequency separation, placing television stations 
in the duplex gap will not cause harmful interference, should we decide 
to do so to accommodate market variation. We also agree with Alcatel-
Lucent that a technically reasonable duplex gap, which we adopt as part 
of our 600 MHz Band Plan, will prevent in-band third order 
intermodulation products from falling in the downlink pass band.
d. Harmonic Interference
    48. Any potential harmonic interference created in the 600 MHz Band 
can be effectively mitigated so that it does not result in harmful 
interference. The risk of mobile-to-mobile harmful interference through 
harmonic interference is minimal. In addition, although we recognize 
that harmful interference within a device could occur in a carrier 
aggregation scenario, we agree with commenters who suggest that this 
potential can be mitigated in various ways. Therefore, we find that we 
do not need to limit the amount of spectrum we offer in the 600 MHz 
Band due to the potential for harmonic interference.
7. Specific Band Plan Scenarios
    49. Below we discuss in detail the specific 600 MHz Band Plan 
scenarios we may use in the forward auction. These range from offering 
two sets of paired blocks to 12 sets of paired blocks, in the 
configurations shown above. In addition, we discuss the number of 
licensed blocks we can offer based on the amount of repurposed 
spectrum, and the size of the guard bands, including the duplex gap, 
under each of these scenarios.
    50. We note that we do not offer a scenario for fewer than two sets 
of paired blocks or more than 12 sets of paired blocks because the 
costs outweigh the benefits of offering only one set of paired blocks, 
given that we would need to clear five television channels in this 
scenario. Further, we decline to create scenarios for more than 12 sets 
of paired blocks, i.e., using more than a 144 megahertz clearing 
target.
    51. Specifically, we do not offer scenarios with 13 or more sets of 
paired blocks, due to the inefficiencies associated with the position 
of channel

[[Page 48449]]

37 (used for RAS and WMTS) in the 600 MHz Band. To offer 14 sets of 
paired blocks, we would need to place one downlink block above channel 
37 and the rest of the downlink blocks below channel 37, resulting in 
an additional duplexer to support only this one block. Therefore, in 
this case the costs outweigh the benefits of placing only one downlink 
block above channel 37.
a. Two Sets of Paired Blocks (42 Megahertz Repurposed)
    52. Under this scenario, we create two sets of paired blocks from 
42 megahertz of repurposed spectrum. We establish an 11 megahertz 
duplex gap, which is large enough to ensure there is no overlap of 
third order intermodulation products between transmit and receive 
channels, and allows for a feasible transition band for the transmit 
and receive filters. We also use an 11 megahertz guard band between the 
600 MHz downlink and television operations, which provides reasonable 
rejection and allows for an achievable transition bandwidth in the 
mobile filters. This scenario requires 10 megahertz filter pass bands 
and 31 megahertz of antenna bandwidth, which no commenters suggest 
present technical difficulties.
b. Three Sets of Paired Blocks (48 Megahertz Repurposed)
    53. The Band Plan scenario for three sets of paired blocks will be 
used if we have 48 megahertz of repurposed spectrum. Under this 
scenario, we establish an 11 megahertz duplex gap, which is large 
enough to ensure there is no overlap of third order intermodulation 
products between transmit and receive channels, and allows for a 
feasible transition band for the transmit and receive filters. We 
create a seven megahertz guard band between the downlink band and 
television operations, which provides reasonable rejection and allows 
for a feasible transition bandwidth. This scenario requires 15 
megahertz filter pass bands and 41 megahertz of antenna bandwidth, 
which no commenters suggest present technical difficulties.
c. Four Sets of Paired Blocks (60 Megahertz Repurposed)
    54. Under this scenario, we create four sets of paired blocks from 
60 megahertz of repurposed spectrum. We create an 11 megahertz duplex 
gap, which is large enough to ensure there is no overlap of third order 
intermodulation products between transmit and receive channels, and 
allows for a feasible transition band for the transmit and receive 
filters. We also create a nine megahertz guard band between the 
downlink band and television operations, which provides reasonable 
rejection and allows for a feasible transition bandwidth. This scenario 
requires 20 megahertz filter pass bands and 51 megahertz of antenna 
bandwidth, which no commenters suggest present technical difficulties.
d. Five Sets of Paired Blocks (72 Megahertz Repurposed)
    55. The Band Plan scenario for five sets of paired blocks will be 
used if we have 72 megahertz of repurposed spectrum. Under this 
scenario, we establish an 11 megahertz duplex gap, which is required in 
this case to ensure there is no overlap of third order intermodulation 
products between transmit and receive channels and allow for a 
transition bandwidth that can be supported by all mobile filter 
technologies. We establish an 11 megahertz guard band between the 
downlink band and television operations, which provides reasonable 
rejection and allows for a feasible transition bandwidth. This scenario 
requires 25 megahertz filter pass bands and 61 megahertz of antenna 
bandwidth, which no commenters suggest present significant technical 
difficulties.
e. Six Sets of Paired Blocks (78 Megahertz Repurposed)
    56. Under this scenario, we create six sets of paired blocks from 
78 megahertz of repurposed spectrum. We create an 11 megahertz duplex 
gap, which, as discussed above, is required to ensure there is no 
overlap of third order intermodulation products between transmit and 
receive channels and allow for a transition bandwidth that can be 
supported by all mobile filter technologies. We establish a seven 
megahertz guard between the downlink band and television operations, 
which provides reasonable rejection and allows for a feasible 
transition bandwidth. This scenario has a 30 megahertz pass band in the 
uplink and downlink bands.
    57. Some commenters suggest we should limit paired spectrum to 25 
megahertz pass bands (i.e., five sets of paired blocks) due to mobile 
filter limitations. However, we reject this limitation because we 
recognize that technology improves over time and 30 megahertz mobile 
filter pass bands may become feasible, and, the 600 MHz Band could be 
implemented with multiple filters (duplexers) if necessary.
    58. This scenario requires 71 megahertz of antenna bandwidth, which 
is somewhat above the approximately 60 megahertz limit some commenters 
propose for the 600 MHz Band. As discussed above, we reject this limit 
and agree with T-Mobile that any performance degradation will be small 
(less than 1 dB) and can be mitigated by using tunable antennas or 
other technologies.
    59. Finally, some commenters suggest the uplink pass band should be 
limited to 25 megahertz due to the potential for harmonic interference 
with the BRS/EBS band. As discussed above, the likelihood of such 
interference is low, and it does not prevent use of the spectrum; it 
only limits the potential for carrier aggregation with the BRS/EBS 
band. This potential limitation is outweighed by the benefit of making 
more spectrum available, and as a result, we determine that we should 
not limit the size of the paired bands if enough repurposed spectrum is 
available.
f. Seven Sets of Paired Blocks (84 Megahertz Repurposed)
    60. The Band Plan scenario for seven sets of paired blocks will be 
used if we have 84 megahertz of repurposed spectrum. Under this 
scenario, we establish an 11 megahertz duplex gap, which, as discussed 
above, will ensure there is no overlap of third order intermodulation 
products between transmit and receive channels, and allow for a 
transition bandwidth that can be supported by all mobile filter 
technologies. We create a three megahertz guard band between the mobile 
downlink and WMTS services in channel 37, which as discussed above, 
will minimize the likelihood of harmful interference to WMTS devices. 
We also note that this three megahertz guard band combined with channel 
37 forms an effective nine megahertz guard band between the downlink 
band and television operations, which, as discussed above, provides 
reasonable rejection and allows for a feasible transition bandwidth.
    61. This scenario has a 35 megahertz pass band in both the uplink 
and downlink bands, and requires 81 megahertz of antenna bandwidth in a 
static approach. As discussed above, this configuration exceeds the 
pass band sizes and antenna bandwidth limits proposed by some 
commenters to address mobile filter, antenna bandwidth, and/or harmonic 
interference concerns. For the reasons discussed above, we decline to 
limit the amount of paired spectrum we will offer in the forward 
auction, should we have enough repurposed spectrum available.

[[Page 48450]]

g. Eight Sets of Paired Blocks (108 Megahertz Repurposed)
    62. Under this scenario, we create nine sets of paired blocks from 
108 megahertz of repurposed spectrum. We create an 11 megahertz duplex 
gap, which will ensure there is no overlap of third-order 
intermodulation products between transmit and receive channels, and 
allow for a feasible transition bandwidth. Under this scenario, we 
establish two three megahertz guard bands between the mobile downlink 
band and WMTS services in channel 37 (both above and below channel 37), 
which will minimize the likelihood of harmful interference to WMTS 
devices. We also establish an 11 megahertz guard band between the 
downlink band and television operations, which provides reasonable 
rejection and allows for a feasible transition bandwidth, as discussed 
above.
    63. This scenario has a 40 megahertz pass band in the uplink band, 
and two pass bands in the downlink band (30 megahertz above channel 37 
and 10 megahertz below channel 37), which will require implementing two 
to three duplexers. Under a two duplexer approach, the band would be 
split into 30+30 megahertz and 10+10 megahertz. Although a 30+30 
megahertz duplexer exceeds the 25 megahertz pass band discussed above, 
alternate technologies such as lithium niobate may allow for larger 
pass bands (up to 36 megahertz). Although lithium niobate offers lower 
Q values and therefore potentially larger transition bands, as can be 
seen in the diagram below, the 30+30 megahertz filter would be 33 
megahertz from television operations, allowing a very large transition 
band for this filter; while the 10+10 megahertz duplexer would need an 
11 megahertz transition bandwidth, which is feasible today. 
Alternatively, this scenario could be implemented using three 
duplexers, with two duplexers in the 30+30 megahertz portion. Under 
either a two or three duplexer approach, the duplex spacing of the 
lower 10+10 megahertz portion would be different from the upper 30+30 
megahertz portion. This does not present an implementation challenge; 
in the past 3GPP has approved a band with different duplex spacing for 
different blocks within the band.
    64. In addition to creating a 40 megahertz pass band in the uplink 
band, this configuration requires 103 megahertz of antenna bandwidth in 
a static approach, but only 73 megahertz in a tunable approach. As 
discussed above, this configuration exceeds the pass band sizes 
proposed by some commenters to address mobile filter, antenna 
bandwidth, and/or harmonic interference concerns. For the reasons 
discussed above, and in the Order, we decline to limit the amount of 
paired spectrum we will offer in the forward auction, should we have 
enough repurposed spectrum available.
h. Nine Sets of Paired Blocks (114 Megahertz Repurposed)
    65. The Band Plan scenario for nine sets of paired blocks will be 
used if we have 114 megahertz of repurposed spectrum. As discussed 
above, we establish an 11 megahertz duplex gap to ensure there is no 
overlap of third order intermodulation products between transmit and 
receive channels, and allow for a feasible transition bandwidth. In 
this scenario, we create two three megahertz guard bands between the 
mobile downlink and WMTS services in channel 37, both above and below 
channel 37, which will minimize the likelihood of harmful interference 
to WMTS devices. We establish a seven megahertz guard band between the 
downlink band and television operations, which provides reasonable 
rejection and allows for a feasible transition bandwidth.
    66. This scenario has a 45 megahertz pass band in the uplink band 
and two pass band in the downlink band (25 megahertz above channel 37 
and 20 megahertz below channel 37), which can be implemented with two 
duplexers, 25+25 megahertz and 20+20 megahertz, within the capabilities 
of current mobile filter technology. This plan requires 88 megahertz of 
antenna bandwidth using a tunable antenna, and may have some 
degradation. As discussed above, this configuration exceeds the pass 
band sizes and antenna bandwidth limits proposed by some commenters to 
address mobile filter, antenna bandwidth, and/or harmonic interference 
concerns. For the reasons discussed above, we decline to limit the 
amount of paired spectrum we will offer in the forward auction, should 
we have enough repurposed spectrum available.
i. Ten Sets of Paired Blocks (126 Megahertz Repurposed)
    67. Although commenters focus on how to configure a band plan for 
120 megahertz of repurposed spectrum or less, we provide scenarios for 
more than 120 megahertz should we have sufficient repurposed spectrum 
and decide to offer more than 120 megahertz in the forward auction. As 
discussed above, we note that we have not yet determined our initial 
clearing target, so we may not necessarily offer these scenarios in the 
forward auction.
    68. Under this scenario, we create 10 sets of paired blocks from 
126 megahertz of repurposed spectrum. As discussed above, we create an 
11 megahertz duplex gap in this case to ensure there is no overlap of 
third order intermodulation products between transmit and receive 
channels, and allow for a feasible transition bandwidth. In this 
scenario, we create two three megahertz guard bands between the mobile 
downlink band and WMTS services in channel 37 (both above and below 
channel 37), which as discussed in the Order, will minimize the 
likelihood of harmful interference to WMTS devices. We also create a 
nine megahertz guard band between the downlink band and television 
operations, which provides reasonable rejection and allows for a 
feasible transition bandwidth for all filter technologies, as discussed 
above.
    69. This scenario has a 50 megahertz pass band in the uplink band, 
and two pass bands in the downlink band (30 megahertz below channel 37 
and 20 megahertz above channel 37), which, as in the 108 megahertz 
scenario above, could be implemented with two or three duplexers. This 
scenario requires 93 megahertz of antenna bandwidth assuming a tunable 
antenna, and may have some degradation. As discussed above, this 
configuration exceeds the pass band sizes and antenna bandwidth limits 
proposed by some commenters to address mobile filter, antenna 
bandwidth, and/or harmonic interference concerns. For the reasons 
discussed above, and in the Order, we decline to limit the amount of 
paired spectrum we will offer in the forward auction, should we have 
enough repurposed spectrum available.
j. Eleven Sets of Paired Blocks (138 Megahertz Repurposed)
    70. The Band Plan scenario for 11 sets of paired blocks will be 
used if we have 138 megahertz of repurposed spectrum. In this scenario, 
we create an 11 megahertz duplex gap, which will ensure there is no 
overlap of third order intermodulation products between transmit and 
receive channels, and allow for a feasible transition bandwidth. In 
this scenario, we establish two three megahertz guard bands between the 
mobile downlink band and WMTS services in channel 37--both above and 
below channel 37--which, as discussed above, will minimize the 
likelihood of harmful interference to WMTS devices. We also create an 
11 megahertz guard band between the downlink band and television 
operations, which, as discussed above, provides reasonable

[[Page 48451]]

rejection and allows for a feasible transition bandwidth.
    71. This scenario has a 55 megahertz pass band in the uplink band, 
and two pass bands in the downlink band (40 megahertz and 15 
megahertz), which would most likely be implemented with three 
duplexers. This scenario requires 98 megahertz of antenna bandwidth 
assuming a tunable antenna, and may have some degradation. As discussed 
above, this configuration exceeds the pass band sizes and antenna 
bandwidth limits proposed by some commenters to address mobile filter, 
antenna bandwidth, and/or harmonic interference concerns. For the 
reasons discussed above, we decline to limit the amount of paired 
spectrum we will offer in the forward auction, should we have enough 
repurposed spectrum available.
k. Twelve Sets of Paired Blocks (144 Megahertz Repurposed)
    72. The Band Plan scenario for 12 sets of paired blocks will be 
used if we have 144 megahertz of repurposed spectrum. In this scenario, 
we create an 11 megahertz duplex gap, which will ensure there is no 
overlap of third order intermodulation products between transmit and 
receive channels, and allow for a feasible transition bandwidth. In 
this scenario, we establish two three megahertz guard bands between the 
mobile downlink band and WMTS services in channel 37--both above and 
below channel 37--which, as discussed above, will minimize the 
likelihood of harmful interference to WMTS devices. We also create a 
seven megahertz guard band between the downlink band and television 
operations, which, as discussed above, provides reasonable rejection 
and allows for a feasible transition bandwidth.
    73. This scenario has a 60 megahertz pass band in the uplink band, 
and two pass bands in the downlink band (50 megahertz and 10 
megahertz), which would most likely be implemented with three 
duplexers. This scenario requires 103 megahertz of antenna bandwidth 
assuming a tunable antenna, and may have some degradation. As discussed 
above, this configuration exceeds the pass band sizes and antenna 
bandwidth limits proposed by some commenters to address mobile filter, 
antenna bandwidth, and/or harmonic interference concerns. For the 
reasons discussed above, we decline to limit the amount of paired 
spectrum we will offer in the forward auction, should we have enough 
repurposed spectrum available.

B. Repacking the Broadcast Television Bands

    74. Repacking involves reorganizing television stations in the 
broadcast television bands so that the stations that remain on the air 
after the incentive auction occupy a smaller portion of the UHF band, 
thereby freeing up a portion of that band for new wireless uses. In 
repacking, the Commission will exercise its longstanding spectrum 
management authority, as it has in prior actions such as the digital 
television transition, as well as the specific grant of authority in 
the Spectrum Act. The Spectrum Act imposes express requirements on that 
exercise of authority; in particular, it makes repacking ``subject to 
international coordination along the border with Mexico and Canada'' 
and requires ``all reasonable efforts to preserve, as of the date of 
the enactment of this Act, the coverage area and population served of 
each broadcast television licensee, as determined using the methodology 
described in OET Bulletin 69.''
    75. The selection of winning reverse auction bids will depend in 
part on the Commission's ability to assign television channels to the 
stations that are not relinquishing their spectrum usage rights. 
Because participation in the reverse auction is voluntary, the option 
for active bidders to stay in their pre-auction band must remain 
available. To ensure this option is available, the feasibility of 
assigning a channel in the pre-auction band must be checked for each 
non-participating station and each active bidder before each auction 
round. The reverse auction and the repacking process are, therefore, 
interdependent; for the incentive auction to succeed, they must work 
together.
    76. Speed is critical to the successful implementation of the 
incentive auction. If the reverse auction bidding takes an unreasonably 
long time to complete because of the time required to determine whether 
there is an appropriate channel for each station that has not 
relinquished its spectrum usage rights, then the viability of the 
auction as a whole will be threatened. Our repacking methodology, 
therefore, must be capable of analyzing complex technical issues in a 
timely manner, that is, fast enough not to unduly slow down the bidding 
process. Certainty also is vital: because the reverse auction outcome 
depends on repacking decisions, the results of the repacking process 
cannot be tentative or indefinite after the auction is complete.
1. Repacking Process Overview
    77. The implementation of the repacking process is driven by the 
Spectrum Act's express requirements, as well as by auction design 
considerations. During the reverse auction bidding process, it will 
undertake a ``repacking feasibility check'' to ensure that each station 
that will remain on the air after the incentive auction is reassigned 
to a channel that satisfies the statutory preservation mandate. After 
the final stage rule is satisfied and bidding stops (but before the 
incentive auction concludes), channel assignments will be optimized and 
finalized. This approach will enable rapid evaluation of bids during 
the reverse auction and will provide certainty that a channel that 
complies with the requirements imposed by the Spectrum Act and our 
rules is available for every station that remains on the air following 
the incentive auction.
    78. Prior to the commencement of the reverse auction, the staff 
will determine the coverage area and population served as of February 
22, 2012 (the date of the enactment of the Spectrum Act) of every 
television station whose coverage area and population served the 
Commission will make all reasonable efforts to preserve in the 
repacking process, using the methodology described in the Office of 
Engineering and Technology Bulletin No. 69 (``OET-69''). With respect 
to certain facilities the Commission is exercising discretion to 
protect it will determine the coverage area and population served as of 
dates appropriate to those facilities. Based on this data, the staff 
will develop constraint files for each station using the approach set 
forth in the Repacking Data PN (See Incentive Auction Task Force 
Releases Information Related to the Incentive Auction Repacking, ET 
Docket 13-26, GN Docket No. 12-268, Public Notice, 28 FCC Rcd 10370 
(2013)), with some exceptions. Specifically, an ``interference-paired'' 
file will be produced that includes, for each station, a list of all 
the other television stations that could not be assigned to operate on 
the same channel or on an adjacent channel with each particular 
station. Additionally, a ``domain'' file will be produced that 
includes, for each station, a list of all the channels to which the 
station could be assigned considering ``fixed constraints,'' that is, 
incumbents in the bands other than domestic television stations that 
are entitled to interference protection at fixed geographic locations 
and on specific channels. The two files, collectively the ``constraint 
files,'' will be used to check the feasibility of

[[Page 48452]]

assigning permissible channels to stations that will remain on the air. 
The constraint files will enable the repacking methodology to rapidly 
evaluate during the reverse auction bidding process whether a channel 
could feasibly (that is, consistent with the preservation mandate of 
the Spectrum Act) be assigned to each station in light of the other 
stations that must also be assigned channels at that point during the 
auction.
    79. The Commission adopted the approach to developing constraint 
files proposed in the Repacking Data PN, except that the determination 
of coverage area and population served, as required by the Spectrum 
Act, will not be calculated based on a single channel, or ``proxy'' 
channel, in each band. Instead, the Commission will calculate the 
coverage of a station and the interference between stations on every 
possible channel that could be assigned to the station during the 
repacking process. Further, the data inputs and assumptions that appear 
in the Repacking Data PN will be updated to reflect the decisions 
adopted in this Order.
    80. During the initialization step of the reverse auction, the 
initial ``clearing target'' for how much television spectrum will be 
repurposed through the reverse auction and the repacking process will 
be determined based on broadcast stations' collective willingness to 
relinquish spectrum usage rights at the opening prices announced by the 
Commission. The clearing target will dictate the total number of 
remaining channels available for the repacking process.
    81. At the start of the reverse auction bidding process, broadcast 
stations will fall into two general categories: Non-participating 
stations that will remain on the air after the incentive auction, and 
participating stations that may or may not remain on the air (including 
stations that may elect to change bands from UHF to VHF or high VHF to 
low VHF), depending on the reverse auction outcome. The repacking 
feasibility checker will ensure that every non-participating station 
can be assigned a television channel in its pre-auction band. Each time 
a participating station drops out of the auction, the repacking 
feasibility checker will determine whether a channel is available for 
each individual station that continues to participate in the bidding. 
The bidding will continue within a stage until every station has either 
dropped out of the auction or had its bid accepted. Final channel 
assignments will not be made during the bidding stage.
    82. After the bidding in the reverse auction ends, the forward 
auction bidding will begin. As the forward auction bidding proceeds, 
whether the final stage rule is met will be evaluated. If the rule has 
not been satisfied, a new stage of the auction will commence with a 
lower spectrum clearing target. If the rule has been satisfied, the 
channel assignments for each station that will remain on the air will 
be optimized to ensure an efficient post-incentive auction channel 
assignment scheme, taking into consideration factors such as minimizing 
relocation costs. The Commission will seek comment on the details of 
the channel assignment optimization in the Comment PN.
2. Implementing the Statutory Preservation Mandate
a. ``All Reasonable Efforts''
    83. The Spectrum Act gives the Commission broad discretion to 
``make such reassignments of television stations that the Commission 
considers appropriate'' ``[f]or purposes of making available spectrum 
to carry out the forward auction.'' Congress imposed a qualification on 
this general mandate: ``the Commission must make all reasonable efforts 
to preserve, as of the date of the enactment of this Act, the coverage 
area and population served of each broadcast television licensee, as 
determined using the methodology described in OET Bulletin No. 69 of 
the Office of Engineering and Technology of the Commission.''
    84. The Commission interprets our ``all reasonable efforts'' 
obligation in light of the statutory context. Thus, in determining what 
is ``reasonable,'' the Commission should take into account the other 
objectives in the Spectrum Act, including the goal of repurposing 
spectrum--an objective which clearly militates in favor of an efficient 
repacking method. This reading is consistent with the rest of the 
Spectrum Act. Section 6403(a)(1), for example, directs the Commission 
to ``conduct a reverse auction . . . in order to make spectrum 
available for assignment through a system of competitive bidding.'' It 
is also consistent with Congressional intent. The Commission therefore 
finds that the statute requires that it use all reasonable efforts to 
preserve each station's coverage area and population served without 
sacrificing the goal of using market forces to repurpose spectrum for 
new, flexible uses.
    85. Accordingly, the Commission rejects NAB's contention that Sec.  
6403(b)(2) of the Spectrum Act is a ``hold harmless'' provision that 
requires the Commission to identify ``extraordinary'' or ``truly 
exceptional'' circumstances before altering a station's coverage area 
and population served. The Commission notes that courts have 
interpreted the phrases ``all reasonable efforts'' or ``every 
reasonable effort'' to ``require[] that a party make every reasonable 
effort, not every conceivable one.'' Congress included the term 
``reasonable'' in the statute because it anticipated that broadcasters' 
interests would not be the only interests that the Commission would 
have to consider in the repacking process. Had Congress instead 
intended to ensure the primacy of broadcasters' interests over all 
others, as NAB and others contend, Congress could have so specified. It 
did not. Instead, it required the Commission to make ``all reasonable 
efforts'' to preserve their coverage areas and populations served, a 
qualification that requires of the Commission a certain level of effort 
rather than a particular outcome. Accordingly, the Commission does not 
believe the statute requires us to precisely and strictly preserve 
broadcasters' coverage areas and populations served without considering 
the other objectives in the Spectrum Act.
    86. Nor does the legislative history support broadcasters' 
interpretation of Sec.  6403(b)(2). Comcast claims that ``[d]uring 
markup, Congress specifically rejected alternate language that could 
have allowed the auction and repacking process to permanently reduce 
broadcasters' existing coverage, as long as the process resulted in 
`substantially similar' coverage.'' Comcast's argument misses the mark. 
The cited legislative history informs our reading of ``coverage area 
and population served'' in section 6403(b)(2). The Commission 
interpreted those terms to require efforts to preserve service to those 
viewers who had access to a station's signal within its protected 
coverage area as of February 22, 2012--an outcome that is consistent 
with Congress' rejection of the term ``substantially similar 
coverage.'' By contrast, ``the reasonableness requirement [in Sec.  
6403(b)(2)] by its plain terms is a measure of effort--i.e., the 
actions taken to achieve a goal--and not of the outcome itself.'' As 
CEA explained in its comments, ``[t]he question is not whether the 
Commission will protect broadcasters''; rather, ``[t]he question is 
whether the Commission is obligated to protect all of the existing 
levels of service without considering the impact on the goal of 
spectrum clearing.'' The Commission agrees with CEA that the answer to 
that question ``is plainly no.''

[[Page 48453]]

    87. The Commission clarifies, however, that it is not adopting a 
``balancing approach'' that weighs the objective of preserving coverage 
area and population served against the Spectrum Act's general objective 
of repurposing spectrum. Rather, the other objectives in the Spectrum 
Act inform our assessment of the degree of effort required to protect 
the coverage areas and populations served of broadcast licensees, that 
is, whether we have satisfied the ``all reasonable efforts'' mandate. 
This approach is consistent with the Supreme Court's directive that 
``[s]tatutory construction . . . is a holistic endeavor'' such that 
``[a] provision that may seem ambiguous in isolation is often clarified 
by the remainder of the statutory scheme.'' By way of example, efforts 
that would preserve broadcasters' coverage areas and populations 
served, but would prevent us from repurposing spectrum, would not be 
``reasonable'' in the larger context of the Spectrum Act. The 
Commission, therefore reject Comcast's view that Sec.  6403(b)(2) 
requires us to ``focus exclusively on preserving the integrity of 
broadcasters' existing coverage area and population served.''
    88. Similarly, by taking into account the other objectives in the 
Spectrum Act, the Commission is not ``pretend[ing] that the word `all' 
does not exist in the phrase `all reasonable efforts.' '' ``All'' as 
used in Sec.  6403(b)(2) modifies ``reasonable''; it measures quantity 
of effort, but does not affect the degree of effort required by the 
statute. ``All'' therefore requires only that we make every reasonable 
effort to preserve broadcasters' coverage area. Under our reading of 
the statute, the Commission could not satisfy its statutory obligation 
if it undertook only one of several reasonable actions to preserve 
broadcasters' coverage areas and populations served. ``All,'' however, 
has no bearing on whether any particular effort is ``reasonable'' and 
thus does not require the Commission to ignore the other objectives of 
the Spectrum Act when conducting the repacking process.
b. OET-69 and TVStudy
    89. OET Bulletin No. 69, which is titled ``Longley-Rice Methodology 
for Evaluating TV Coverage and Interference,'' provides guidance on the 
implementation and use of the Longley-Rice propagation methodology for 
evaluating television coverage and interference. The methodology 
described in OET-69 predicts a television station's coverage area and 
population served, both of which the Commission must make all 
reasonable efforts to preserve under the Spectrum Act. OET-69 
specifically states that a computer program is necessary to implement 
the methodology. That computer program takes certain inputs, including 
population data, geographical terrain data, and data about stations' 
transmission facilities, and applies the methodology described in OET-
69 to generate a station's predicted coverage area and population 
served. The computer program that implements OET-69 thus produces 
``output''--or more specifically, a description of a station's 
predicted coverage area and population served within its noise-limited 
contour.
    90. The Commission will use TVStudy, the updated computer program 
that implements the methodology described In OET Bulletin No. 69, in 
the incentive auction. As discussed, TVStudy's capability to create and 
use a uniform nationwide grid for analysis of coverage area and 
population served is essential to the repacking process. In addition, 
the software previously used to implement OET-69 cannot support the 
incentive auction because it cannot undertake, in a timely fashion, the 
volume of interference calculations necessary to ensure that all 
stations that will remain on the air following the auction are assigned 
channels in accordance with the provisions of the Spectrum Act. 
Further, the proposed updates to the input values used in applying the 
OET-69 methodology allow for a more accurate analysis of each station's 
coverage area and population served as of the date of the enactment of 
the Spectrum Act and eliminate the use of input values that are now 
obsolete. Thus, with one exception that is explained, the Commission 
adopted the updated input values proposed in the TVStudy PN (Office of 
Engineering and Technology Releases and Seek Seeks Comment on Updated 
OET-69 Software, ET Docket No. 13-26, GN Docket No. 12-268, Public 
Notice, 28 FCC Rcd 950 (2013)).\2\ It finds that using TVStudy with 
updated input values to implement OET-69 will support the unique 
requirements of the incentive auction while satisfying our statutory 
obligation to make ``all reasonable efforts'' to preserve television 
stations' coverage area and population served as of February 22, 2012. 
The Commission finds that the Spectrum Act not only permits us to use 
TVStudy, but--because the statute requires the Commission to make all 
reasonable efforts to preserve broadcast stations' coverage areas and 
populations served as of February 2012--requires us to update the 
software and data inputs necessary to implement the methodology set 
forth in OET-69 to predict coverage as of that date as accurately as 
possible.
---------------------------------------------------------------------------

    \2\ Updated versions of TVStudy were announced by public notice 
in April, July, August, and September 2013. See Office of 
Engineering and Technology Releases Updated TVStudy Software, ET 
Docket No. 13-26, GN Docket No. 12-268, Public Notice, 28 FCC Rcd 
5520 (2013); Repacking Data PN, 28 FCC Rcd 10370; Office of 
Engineering and Technology Releases Updated TVStudy Software, ET 
Docket No. 13-26 and GN Docket No. 12-268, Public Notice, 28 FCC Rcd 
12327 (2013); Office of Engineering and Technology Releases TVStudy 
Version 1.2.8 and Announces Future Updates Will Be Posted to the 
Web, ET Docket No. 13-26 and GN Docket No. 12-268, Public Notice, 28 
FCC Rcd 12979 (2013). The most up-to-date version of TVStudy is 
posted at http://data.fcc.gov/download/incentive-auctions/OET-69/.
---------------------------------------------------------------------------

    91. The Longley-Rice methodology described in OET-69 divides the 
area within a digital television station's noise-limited contour into 
approximately square ``grid cells'' to evaluate signal strength, or 
coverage, and any interference. The computer program previously used to 
implement the OET-69 methodology generates station-specific grid 
calculations based on each station examined. More specifically, the 
earlier software creates a new and unique grid for each station 
centered on the station's transmitting facilities. Signal strength and 
potential interference from other stations are calculated for each cell 
in that particular grid. Because each grid is unique to each station, 
however, no two station grids are typically the same, and signal 
strength and interference calculations for one station cannot be used 
to calculate coverage and interference for another station, even where 
they cover the same or portions of the same geographic area. The cell-
level data are not consistent from one station to another. Moreover, 
the earlier computer software lacks the capability to save grid 
calculations. Given these two limitations (i.e., the lack of uniform 
grid cells and the inability to save calculations), the earlier 
computer software would have to re-create an individual station's grid 
each and every time it has to analyze a possible channel assignment in 
the repacking process. In other words, an individual station's grid may 
have to be re-created thousands of times before a determination is made 
as to which channel a station may be assigned following the auction.
    92. In contrast, TVStudy has the capability to apply the OET-69 
methodology to calculate signal strength and evaluate interference 
using a single, common grid of cells common to all television stations. 
Based on the data derived from the common grid, TVStudy can undertake 
pairwise interference analyses of every station that will

[[Page 48454]]

remain on the air after the incentive auction and generate data that 
identifies combinations of stations that can (or cannot) co-exist on 
the same channel or adjacent channels. These data are used to generate 
the constraint files that will be employed in the repacking process. 
Further, unlike the earlier software, much of the cell-level data 
produced by TVStudy are cached, or saved. Hence, the repacking 
methodology need not re-create a station's unique grid each time it 
examines a possible channel assignment, and the numerous interference 
calculations can be run in a much shorter period of time. These 
attributes of TVStudy (i.e., the common grid and caching) are essential 
to the timely analysis of feasible channel assignments.
    93. The Commission concludes that the statutory language allows the 
Commission to update the computer software and input values used to 
implement the OET-69 methodology while adhering to the methodology 
described in OET Bulletin No. 69. The statutory language is ambiguous, 
and it is reasonable to read it narrowly. Indeed, the Commission finds 
unreasonable NAB's interpretation, which would compel the Commission to 
rely on outdated computer software and data to implement that 
methodology. Accordingly, the Commission interprets the statutory 
phrase ``methodology described in OET Bulletin No. 69'' to refer to the 
particular procedures for evaluating television coverage and 
interference that are provided for in that bulletin, not the computer 
software or input values used to apply that methodology in any given 
case. The Commission's interpretation is consistent with the common 
meaning of the word ``methodology.'' Distinguishing between a 
``methodology'' and the ``software'' and ``inputs'' used for applying 
that methodology also is consistent with the ordinary meaning of the 
latter words, as well as with common understanding. Courts have 
recognized similar distinctions between administrative methodologies 
and the computer programs and data inputs used to apply them. Likewise, 
evaluating TV coverage and interference using the methodology described 
in OET-69 requires a computer program and data inputs, but they are 
tools for applying the evaluation procedure, not the procedure itself.
    94. Even though computer software and certain inputs that are 
necessary to implement OET-69 are referred to in OET-69, the Commission 
finds they are not part of the OET-69 ``methodology.'' Examination of 
OET-69 itself bears out this distinction. OET-69 characterizes the 
computer program as a tool for applying the Longley-Rice propagation 
model, explaining that ``[a] computer is needed . . . because of the 
large number of reception points that must be individually examined.'' 
OET-69 also makes clear that the computer program for applying OET-69 
is subject to change--for example, it refers to ``the computer program 
now used by the Media Bureau to evaluate applications . . . as well as 
predecessors of that program,'' and to ``[t]he Fortran code currently 
used by the Media Bureau to evaluate new proposals''--and provides 
instructions on how to use different computer programs to apply the 
Longley-Rice model. Indeed, OET-69 contemplates that others will 
utilize their own computer programs to implement the OET-69 methodology 
and provides suggestions for obtaining information on using the 
Longley-Rice model in doing so. The Commission's bureaus have used 
different computer programs to implement OET-69. In contrast, the 
methodology itself has remained the same through multiple versions of 
OET Bulletin No. 69 (other than corrections and updated Internet 
references). The Commission further notes that the rules distinguish 
between ``the procedure set forth in OET Bulletin No. 69'' and the 
inputs for applying it; for example, in evaluating post-digital TV 
transition allotments, the rules require the use of ``the 2000 census 
population data'' when calculating interference pursuant to the 
methodology in OET-69. Thus, the Commission agrees with CTIA and others 
that TVStudy is merely an updated tool for implementing the methodology 
in OET-69. Likewise, the updated input values that the Commission 
adopted are not part of the OET-69 methodology within the meaning of 
the statute.
    95. While NAB argues that the statutory phrase ``methodology 
described in OET Bulletin 69'' is ``a term of art that was well 
established in 2012'' to include the present software and input values, 
NAB cannot point to a single instance of the FCC using, let alone 
defining, that phrase prior to enactment of the Spectrum Act. NAB does 
identify a number of decisions in which the Commission characterized 
use of specific Census and terrain data and treatment of ``flagged'' 
results as part of a ``methodology.'' However, only one of those 
decisions referred specifically to OET-69. In that decision, the 
Commission did not define or describe the OET-69 ``methodology'' but 
rather used the term ``methodology'' colloquially to refer to inputs 
associated with application processing. Accordingly, the Commission 
rejects NAB's argument.
    96. In addition to being consistent with the statutory language, 
our interpretation furthers the statutory requirement to ``make all 
reasonable efforts to preserve, as of the date of enactment of this Act 
[February 22, 2012], the coverage area and population served of each 
broadcast television licensee'' by allowing us to update the computer 
program and input values for applying the OET-69 methodology. For 
example, updated inputs like the 2010 U.S. Census data more accurately 
reflect the latest population changes, which show an increase in 
population nationwide of approximately ten percent between 2000 and 
2010, as well as changes in population distribution. Use of 2000 Census 
data, as NAB urges, would preserve television service as of year 2000 
rather than as of the date of enactment of the Spectrum Act. Had 
Congress intended to prevent any updates to the software and input 
values used to implement the OET-69 methodology, it could have 
expressly directed the FCC to use the methodology described in OET-69, 
including the February 6, 2004 version of one of the Commission's 
computer programs implementing that methodology and the inputs used as 
of that date. Instead, Congress required ``all reasonable efforts'' to 
preserve each station's coverage area and population served as of 
February 22, 2012, a mandate that necessitates the use of updated 
software and inputs with greater utility and accuracy. In light of this 
mandate, the Commission disagrees with NAB that Congress was interested 
not in ``the realities of population growth'' but in ``reduc[ing] 
coercive pressure on stations to give up their licenses.'' The 
Commission cannot conclude that Congress intended to require us to 
maintain and somehow adapt an obsolete computer program that relies on 
inaccurate data--particularly given the threat that doing so could 
leave some viewers without television service.
    97. The Commission's reading is also consistent with other relevant 
statutory obligations and with Commission precedent. It has a well-
established duty under the Administrative Procedure Act (``APA'') to 
``analyze . . . new data'' when faced with existing data that ``are 
either outdated or inaccurate.'' NAB's interpretation of section 
6403(b)(2) is in direct conflict with our duty under the APA; it would 
require us to ignore new Census data despite significant population 
changes between 2000 and

[[Page 48455]]

2010, more accurate and updated terrain data, and corrected technical 
information. Consistent with its APA and other statutory obligations, 
the FCC has consistently relied on updated, accurate data and 
procedures when possible. In the Satellite Home Viewer Improvement Act 
of 1999 (``SHVIA''), for example, Congress directed the Commission to 
``take all actions necessary . . . to develop and prescribe by rule a 
point-to-point predictive model for reliably and presumptively 
determining the ability of individual locations to receive signals [of 
Grade B intensity].'' In implementing that statutory mandate, the 
Commission adjusted the Longley-Rice methodology for UHF stations but 
left VHF calculations essentially unchanged. The DC Circuit upheld that 
decision, finding that the Commission acted reasonably because its 
chosen methodology increased the accuracy of the model. NAB tries to 
distinguish SHVIA on the basis that it expressly requires the 
Commission to ``establish procedures for the continued refinement of 
the application of the model by the use of additional data as it 
becomes available''--a provision which the Spectrum Act lacks. The 
Commission is not persuaded. The underlying purpose of SHVIA was to 
identify ``unserved households'' eligible for the rebroadcast of 
distant network signals--an inherently pro-consumer objective. 
Similarly, in the Spectrum Act, Congress required us to make ``all 
reasonable efforts'' to preserve coverage area and population served as 
of February 22, 2012--an obligation that depends heavily on having 
accurate data for that date. The Commission cannot fulfill the 
statutory mandate using outdated data. The 2000 Census data that NAB 
advocates using fails to reflect the increase in predicted population 
served that 85 percent of stations have experienced since that time.
    98. NAB also objects that the proposed updates ``are unlawful 
because they do not preserve broadcast licensees' coverage areas and 
populations served as predicted on February 22, 2012''--predictions 
which it asserts necessarily depend on calculations pursuant to OET-69, 
as it was implemented on that date. On the contrary, the Commission 
read the date in section 6403(b)(2) to modify the preservation mandate, 
not the reference to OET-69. In other words, we read the statute to 
require us to preserve the actual coverage areas and populations served 
by broadcast stations on February 22, 2012, not (as NAB contends) to 
preserve the coverage areas and populations served as calculated by 
using the input values and the version of the computer program 
implementing OET-69 in use by one of the Commission's bureaus on 
February 22, 2012. Use of the outdated computer program and input 
values would not fulfill our statutory mandate to preserve the 
``coverage area and population served'' as of February 22, 2012, but 
rather the service provided long before the Spectrum Act's enactment.
    99. The Commission disagrees with NAB that TVStudy redefines or 
reduces the coverage area of a significant number of stations in 
comparison with the earlier version of the OET-69 computer program. OET 
took care in designing and developing TVStudy to ensure that it 
faithfully implements the OET-69 methodology, provides results that 
closely match those of the earlier computer software (notwithstanding 
updates that improve accuracy), and avoids bias that would 
systematically reduce broadcast stations' coverage areas and 
populations served. In support of its position, NAB, for example, 
predicts that station KMAX-TV in Sacramento, California, would suffer a 
15 percent loss in the population served if we use TVStudy rather than 
the earlier OET software. However, OET's analysis using TVStudy 
predicts that KMAX-TV will experience an eight percent increase in 
population served. Further, OET's analysis using TVStudy and the 
updated inputs adopted in this Order shows that 88 percent of full 
service stations will experience an increase in population served, 
while only 12 percent show some decrease.
    100. NAB also asserts that TVStudy departs from the OET-69 
methodology because it considers LPTV stations and TV translators in 
its evaluation of service and interference analysis. NAB is correct 
that TVStudy has the capability of studying the interference from LPTV 
and TV translators. However, NAB is incorrect in assuming that that 
option will be used in the repacking process.
    101. In addition, NAB claims OET ``failed to conduct any cost-
benefit analysis for its proposed changes.'' According to NAB, ``[t]he 
proposed changes to OET-69 and the attendant uncertainty w[ill] drive 
up the costs for broadcast licensees, as they scramble to acquaint 
themselves with the new methodology, without any countervailing 
benefit.'' That is demonstrably not the case. The benefits of using 
TVStudy clearly outweigh the costs. The use of TVStudy and the updated 
input values is essential to the repacking process and to fulfilling 
the statutory preservation mandate.
    102. Moreover, NAB's criticisms of OET's efforts to provide support 
for TVStudy are baseless. Copies of TVStudy have been made available to 
the public continuously since its original release in February 2013. 
The TVStudy software was released in a form allowing it to be easily 
installed and run on inexpensive, commonly available consumer 
computers. While OET has corrected minor errors and improved the 
functionality of TVStudy since its original release, OET has informed 
the public of these updates by releasing Public Notices, or (as 
announced in September 2013) through updates on the Commission's Web 
site. Commission staff have provided and continue to provide ongoing 
support to users seeking to implement and utilize TVStudy, including 
participating in an online discussion forum (list-serve) open to the 
public. As the developer of TVStudy, OET has provided support to users 
of the software by responding to inquiries on the listserve. Thus, 
broadcasters have had ample opportunity to evaluate and familiarize 
themselves with the updated software and input values. Accordingly, 
contrary to NAB's claims, there should be no uncertainty associated 
with the use of TVStudy.
    103. NAB complains that TVStudy contains ``scores of soft 
switches,'' which contain variables or inputs that can lead to 
different predictions of coverage area and population served depending 
on how the switches are set. Most of these switches reflect variables 
that are not meant to be changed from their default values, were 
included in the software to maximize flexibility, and have not changed 
since the original release of TVStudy. In the TVStudy PN, OET 
tentatively defined the eight soft switches for the inputs that the 
Commission adopted. The release of this Order finalizes the variables 
or inputs associated with the key soft switches. In addition, a Public 
Notice released by OET concurrently with the Order provides guidance 
regarding how to set the switches for the remaining variables or 
inputs.
    104. As interested parties continue to work with TVStudy, there may 
be further opportunities for OET to correct minor errors in, or to 
improve the functionality of, the software, consistent with this Order. 
Accordingly, OET may continue to make improvements and other changes to 
TVStudy after release of this Order that are necessary and appropriate 
to correct minor errors or improve functionality, provided such changes 
are consistent with this Order.

[[Page 48456]]

However, the Commission recognizes the importance of finalizing TVStudy 
well in advance of the auction. The Commission directed OET to finalize 
TVStudy no later than the release of the Procedures PN. It also 
directed OET to release a detailed summary of baseline coverage area 
and population served by each television station to be protected in the 
repacking process, and to provide an opportunity for additional public 
input.
    105. NAB further argues that it is ``arbitrary and capricious'' for 
the Commission to utilize TVStudy only in the incentive auction 
context. According to NAB, if the Commission adopts TVStudy, ``the 
result would be that on the very same day that the auction is commenced 
using [TVStudy], a person or entity could file an application for a new 
television station, yet be required by the Commission to use the [old 
software].'' This assertion lacks merit because the Commission has not 
yet addressed whether TVStudy will be used for purposes other than the 
repacking process. The Commission notes that, contrary to NAB's 
assumption, the Commission does not always use the same computer 
software to implement OET-69. The Commission's bureaus have used 
different software programs to implement OET-69: the Media Bureau has 
used tv--process to process applications for new stations and 
modifications, OET has used ``FLR'' for large-scale projects, like the 
DTV transition, and the International Bureau has used ``V-Soft Probe'' 
for international coordination efforts. Each type of software provides 
a different utility that serves the purposes for which it is used 
(i.e., licensing, interference and international coordination).
    106. NAB and other broadcasters also raise procedural objections 
that lack merit. Because the Commission adopted TVStudy and updated 
input values in this Order, NAB's claim that the Commission itself must 
approve the use of TVStudy and updated input values is moot. NAB also 
complains that the comment cycle was too short. The Commission 
disagrees. The TVStudy PN allowed 45 days for comments and an 
additional 15 days for reply comments. In addition, parties have had 
additional time to work with the updated software and inputs (and to 
submit ex parte filings) since the comment period closed. While NAB 
claims that ``formal'' notice and comment procedures were required 
instead of Public Notices, the purpose of the APA's notice and comment 
requirement has been fully satisfied by OET's issuance of the TVStudy 
PN and its publication in the Federal Register. The Commission has a 
robust record on the issues raised in the TVStudy PN and it has taken 
the comments and ex parte filings into account in adopting the use of 
TVStudy and the updated values in this Order.
    107. Use of 2010 U.S. Census Data. Having addressed the 
broadcasters' statutory and other arguments that the Commission cannot 
use updated software or input values in applying the OET-69 
methodology, the Commission turn to the specific updates to the input 
values associated with TVStudy proposed in the TVStudy PN. First, the 
Commission adopted use of the latest available population data from the 
2010 U.S. Census. The old software used population data from the 2000 
U.S. Census or earlier. According to the 2010 U.S. Census, the 
country's population has grown 9.7 percent since the 2000 Census, an 
increase of 27.3 million people. In addition, the distribution of the 
population across the country has shifted.
    108. NAB argues that the Commission should continue to use 2000 
Census data, claiming that its preliminary analysis of TVStudy with 
2010 population data shows that 14 percent of broadcast licensees will 
experience a decrease in predicted population served. Though our 
evaluation of TVStudy shows a similar apparent reduction, it also shows 
that 88 percent of full-service broadcasters will experience an 
increase in predicted population served. Moreover, while NAB contends 
that ``[t]hese changes are contrary to the Commission's statutory 
obligation to preserve `population served,''' NAB fails to acknowledge 
that using 2010 Census data, the most recent population data available, 
does not result in actual population loss but rather an accurate 
representation of a broadcast station's population served as of 2010. 
In other words, broadcast stations experiencing a ``loss'' in predicted 
population served were, in fact, serving a smaller population on 
February 22, 2012, than predicted using 2000 Census data because the 
2000 Census data is outdated.
    109. Use of One Arc-Second Terrain Elevation Data. The Commission 
adopted use of terrain elevation data with a nominal resolution of one 
arc-second (approximately 30 meters) in most areas of the country. The 
one arc-second dataset, which is derived from smaller scale topographic 
maps with more granular elevation data than datasets used by earlier 
implementations of the OET-69 methodology, will allow for more accurate 
calculation of the effect of terrain on propagation of television 
signals. The U.S. Geological Survey (``USGS'') maintains a database 
with this terrain information, which is updated on a two-month cycle to 
integrate newly available and improved data. The earlier software used 
to implement OET-69 relied on a terrain elevation database of three 
arc-second resolution (approximately 90 meters). The USGS no longer 
distributes, maintains, or supports a three arc-second database, which 
also has a history of errors and no mechanism to check the validity of 
those errors or to correct them. The Commission finds no reason to 
continue using an obsolete database when there is an expert federal 
agency that offers up-to-date and more precise terrain data.
    110. NAB opposes this change and argues that OET-69 expressly 
requires use of a three arc-second database. The Commission 
acknowledges that OET-69 mentions that ``the FCC computer program is 
linked to a terrain elevation database with values every three arc-
seconds of latitude and longitude.'' This is a descriptive statement 
about an input database, however, not a prescriptive element of the 
OET-69 methodology. The Commission does not interpret the description 
of an input linked to the earlier software as a methodological 
requirement or a restriction against updating that software to 
incorporate more precise, accurate, and current data.
    111. NAB further maintains that switching from three to one arc-
second terrain data will result in predicted losses in population 
served for 85.1 percent of all broadcast stations--results that NAB 
argues ``simply cannot be squared with Congress's directive to preserve 
broadcast licensees' service populations, as calculated using the 
version of OET-69 in effect on February 22, 2012.'' NAB did not provide 
any analytical information to support its calculations. By contrast, 
our analysis predicts that about one-half of the stations examined will 
maintain or slightly improve population coverage in comparison to what 
would have been predicted using the three arc-second terrain data, 
while one-half are predicted to experience a slight decrease in 
coverage. Further, staff analysis shows that the results using the one 
arc-second terrain database are more accurate than those of the three 
arc-second database.
    112. Antenna Beam Tilt Values. The Commission adopted use of actual 
beam tilt data, as those data are specified by the licensees and shown 
in the Commission's Consolidated Database System (``CDBS''), instead of 
an across-the-board-assumed downtilt figure. This will allow for a more 
accurate depiction

[[Page 48457]]

of the predicted coverage of, and interference from, each television 
station. As the TVStudy PN recognized, the computer program previously 
used to implement the OET-69 methodology ignores this input from CDBS 
and instead uses the same electrical beam tilt for every location, 
regardless of the actual beam tilt value, which can result in a 
coverage projection that may effectively ``miss'' some of the 
population served. In contrast, TVStudy uses the actual amount of 
electrical downtilt as specified by the broadcast licensees in CDBS, 
generating a more accurate model of coverage and interference effects 
and therefore better implementing the methodology in OET-69.
    113. Coordinates, Depression Angles, and Incorrect Data. Instead of 
continuing to truncate or round geographic coordinates to the nearest 
second, as was the practice in earlier versions of software 
implementing OET-69, the Commission adopted use of full-precision data 
in coverage and population served projections. By increasing the 
precision of geographic coordinates, TVStudy eliminates rounding errors 
and provides at least three additional orders of precision. NAB opposes 
this change because it estimates that it will decrease predicted 
population served for 37.3 percent of stations and increase predicted 
population served for 38.1 percent of stations. The Commission finds 
NAB's argument unpersuasive; there is no technical or computational 
basis to intentionally reduce the numerical precision of the geographic 
coordinates used to calculate station coverage and population served as 
of February 22, 2012. The FCC has a well-established statutory 
obligation to address known inaccuracies in existing data. Therefore, 
the Commission adopted the proposal set forth in the TVStudy PN.
    114. For the same reasons, the Commission adopted the TVStudy PN 
proposal to correct the previous software's error in calculating 
depression angles. Some versions of the computer program previously 
used to implement OET-69 erroneously calculated depression angles based 
on the antenna height above ground, rather than the height above mean 
sea level, which, as the TVStudy Public Notice recognized, can cause 
the radiated power toward the cell under study to be incorrectly 
calculated. This can result in an incorrect representation of a 
station's coverage area and population served.
    115. The TVStudy PN also recognized that there may be instances 
where the information entered into the FCC's broadcast station 
database, CDBS, may not be fully accurate. This could lead to incorrect 
results when the values in that database are used to predict coverage 
and interference. While OET sought comment on methods to detect and 
correct inaccurate data, the commenting parties did not address this 
issue. As discussed, full power and Class A stations will be required 
to certify the accuracy of the information in CDBS prior to the 
incentive auction.
    116. Longley-Rice Error Warnings or ``Flags'' Treatment. The 
Commission declined to adopt an alternative treatment of results that 
are flagged as ``unusable or dubious'' by the Longley-Rice algorithm 
underlying the OET-69 methodology. Currently, the assumption is that 
the cells with such warning flags have coverage, even if surrounding 
cells are predicted to lack coverage or are subject to interference.
    117. The Commission is not persuaded that a change in the 
underlying assumption of error warnings or ``flags'' is necessary or 
appropriate at this time. As noted in the TVStudy PN, error warnings 
have been treated differently depending on context. For example, the 
presence of an error ``flag'' is ignored in applying the methodology of 
OET Bulletin Nos. 72 and 73. That assumption is consistent with the 
purpose of OET-72 and OET-73, which were designed to identify whether 
service is available at a specific location (household). OET-69 is 
designed to predict service availability within a station's coverage 
area generally, at points that are not specific households but are 
intended to be representative of a surrounding area or cell. The 
assumption of coverage in that context is consistent with the 
Commission's traditional assumption that service is available 
throughout a station's coverage area and that broadcasters locate and 
configure their transmitters to maximize coverage. Thus, despite the 
fact that the current treatment of error warnings may overestimate 
coverage areas, the Commission finds no compelling reason to change our 
treatment of the Longley-Rice error flags at this time. Further, it 
does not believe that assuming service for cells with error flags will 
significantly impact our ability to efficiently repack television 
stations, because this assumption does not increase the coverage area 
that the Commission must make all reasonable efforts to preserve. 
Accordingly, the Commission will continue to assume coverage where 
Longley-Rice error warnings appear.
    118. On May 8, 2014, NAB filed a 129-page submission purporting to 
demonstrate that TVStudy ``produce[s] flawed results'' by comparing 
TVStudy and ``the existing OET-69 software.'' Despite the fact that OET 
first publicly released TVStudy over 15 months ago, NAB filed on the 
eve of the Sunshine period, limiting analysis of its submission and 
depriving interested parties of an opportunity for comment. 
Nonetheless, analysis indicates that NAB's submission is flawed. First, 
NAB used the wrong legacy software for its comparison. NAB maintains 
that ``the version of OET-69 in existence on February 22, 2012 
(understood to include OET Bulletin 69 and its implementing software)'' 
must be used in the repacking process. NAB does not specify which of 
the legacy software programs for applying the OET-69 methodology in use 
as of that date it believes must be used. If Congress had intended to 
require the use of particular software, however, presumably it would 
have required the use of OET's ``FLR'' software (which has been 
publicly available on OET's Web site for years), as the statute refers 
specifically to OET as the originator of OET-69. Yet NAB apparently 
used a version of the Media Bureau's application processing software 
for its comparisons to TVStudy. Second, NAB used the wrong input values 
for its comparison. NAB maintains that it used ``the settings OET 
actually proposes to use.'' NAB used such settings selectively, 
however, skewing the results of its comparison. For example, NAB 
maintains that use of TVStudy results in a loss of population served 
for approximately 52 percent of stations studied, yet NAB failed to 
update Census data reflecting an increase in the U.S. population 
between 2000 and 2010. OET's analysis using the settings OET proposed 
to use (and that we adopted in this Order) results in a population 
increase for 85 percent of full power stations. Third, NAB is mistaken 
that TVStudy must be flawed because it does not replicate the results 
produced by earlier software for applying OET-69. The various legacy 
software programs used by the Commission's different bureaus do not 
always produce identical results: Identical results are unnecessary 
when the software is being used for different purposes. TVStudy is not 
designed to produce the identical results produced by earlier software, 
although it does produce very similar results. TVStudy is configured 
differently from earlier software so that it can support the repacking 
process using the most up-to-date and accurate information and 
technical evaluation capabilities and, therefore, necessarily does not 
produce exactly the same results.

[[Page 48458]]

c. Preserving Coverage Area
    119. The Commission adopted the proposal to interpret the statutory 
term ``coverage area'' consistent with the definition of ``service 
area'' in OET-69 and Sec.  73.622(e) of the Commission's rules with 
regard to full power stations. Accordingly, the Commission will 
consider a full power station's coverage area to be the geographic area 
within its noise- limited F(50,190) contour where the signal strength 
is predicted to exceed the noise-limited service level. Consistent with 
the methodology in OET-69, areas within a station's noise-limited 
contour where its signal strength is below the noise-limited signal 
strength level, which typically occurs due to terrain obstructions or 
other propagation factors, will not be considered to be part of the 
station's coverage area. The coverage areas of full power stations that 
operate distributed transmission systems (``DTS'') using multiple 
transmitters will be determined in accordance with the definition of 
authorized service area and method for determining DTS ``authorized 
service areas'' in 47 CFR 73.626(b), (c) and (d) of the rules. Further, 
it is appropriate to use a DTS station's authorized service area as 
currently set forth in our rules as the definition of the coverage of 
such stations. While OET-69 does not specifically address DTS stations, 
the Commission finds that considering a DTS station's service area to 
be the combined coverage of its transmitters, as limited by the maximum 
distances specified in the rules, is consistent with that methodology.
    120. As proposed in the NPRM, the Commission will make all 
reasonable efforts to preserve Class A stations' protected contours. 
The Commission disagrees with commenters who argue that we must protect 
the entire area covered by Class A stations' signals, i.e., the noise-
limited contour within which viewers may be able to receive the signal. 
Because our rules only protect Class A stations' protected contours 
from interference, defining their coverage areas as their noise-limited 
contours would provide these stations with greater interference 
protection after the repacking process than they enjoy today. In the 
absence of an explicit statutory directive, the Commission finds no 
basis to do so. Our approach makes our interpretation of the statutory 
term ``coverage area'' consistent for full power and Class A stations, 
both of which will enjoy protection in the repacking process for the 
same area that now receives interference protection under our rules.
    121. In preserving a station's coverage area, the Commission will 
replicate that station's contour on its new channel. As noted earlier, 
OET-69 sets forth the methodology for determining the contours that 
define the boundaries of a station's coverage area. As proposed in the 
NPRM, the Commission adopted the ``equal area'' approach for 
replicating the area within the station's existing contour as closely 
as possible using the station's existing antenna pattern. Assuming a 
station maintains its other existing technical parameters, i.e., 
location, antenna height and antenna pattern, the Commission will 
permit the station to adjust its power on the new channel until the 
geographic area within the station's noise-limited or protected contour 
(depending on whether the station is full power or Class A) is equal to 
the area within the station's original contour on its pre-auction 
channel. This approach will allow stations to preserve their existing 
coverage areas using antennas that are practical to build, so that 
stations will be able to actually construct their new facilities.
    122. The Commission adopted the proposal to protect in the 
repacking process the existing coverage areas of stations operating 
under a waiver of the antenna height above average terrain (``HAAT'') 
or antenna height limits. The Commission will also protect the existing 
coverage areas of stations that operate under a waiver of effective 
radiated power (``ERP'') limits. In addition, the Commission will make 
all reasonable efforts to preserve the existing coverage areas of 
stations that operate above the HAAT and/or ERP limits pursuant to 
Sec.  73.622(f)(5), except that such operations will not be protected 
to the extent that they exceed the maximum power limits specified in 
the Commission's rules without regard to HAAT. Stations licensed 
pursuant to a waiver of the applicable ERP limit will be permitted to 
continue operations at power levels up to the existing authorized ERP.
    123. To the extent that a broadcaster participates in the auction 
through a UHF-to-VHF or a high-VHF-to-low-VHF bid, the Commission will 
make all reasonable efforts to preserve its coverage area and 
population served. However, because these stations will be relocating 
to a different band, the Commission anticipates that it may be 
difficult for them to maintain their antenna pattern on the new 
channel. Accordingly, as discussed, the Commission will allow 
successful UHF-to-VHF and high-VHF-to-low-VHF bidders to request 
alternative facilities that may result in increases in their coverage 
areas, as long as the increases do not cause interference to other 
stations.
    124. Although broadcasters generally support our decision to permit 
stations assigned to new channels to continue to use their existing 
antenna patterns with power adjustments, the Affiliates Associations 
contend that the Commission should not consider a station's signal to 
be receivable at all locations within its noise-limited contour, 
thereby ignoring terrain losses. They argue that because the effect of 
terrain on signal reception is the sine qua non of the OET-69 model, 
ignoring terrain losses and assuming that a station's signal is 
receivable at all locations within its noise-limited contour would 
eviscerate the statutory requirement to preserve coverage areas using 
the OET-69 methodology. They acknowledge that there inevitably will be 
some changes in coverage area due to channel reassignments, but contend 
that the Commission can only satisfy the preservation mandate in the 
statute if it limits such changes to no more than 0.5 percent. The 
Affiliates Associations alternately propose that the Commission allow 
stations ``flexibility in specifying alternative facilities that 
increase a station's coverage area if that is necessary to fully 
preserve the coverage area and population served of a station following 
repacking.''
    125. While we agree that the goal of the repacking process should 
be preservation of stations' pre-repacking coverage areas, the 
Commission emphasize that, as the Affiliates Associations acknowledge, 
it may not be physically practical or possible for some stations to 
build modified facilities that result in less than a 0.5 percent change 
in the geographic area served within the original contour. Because 
radio signals propagate differently on different frequencies, the 
signal of a station reassigned to a different channel will generally 
not be receivable in precisely the same locations within a station's 
contour as it was in its original channel. Instead, there may be signal 
losses due to terrain in different areas within the contour. Such 
losses are unavoidable, so exact replication of coverage within a 
station's contour is not always attainable under the laws of physics. 
The Commission also notes that the Affiliates Associations have 
mischaracterized the proposal to preserve stations' coverage areas in 
the repacking process. The Commission is not assuming that ``coverage 
area'' includes all of the area within a station's contour (i.e., that 
a station's signal is receivable at all locations within the contour). 
Rather, the Commission will adhere to the OET-69 methodology,

[[Page 48459]]

which considers variations in signal availability resulting from 
terrain losses, when determining the ``coverage area'' and ``population 
served'' that must be preserved in the repacking process. Thus, the 
Commission will not include areas where a signal is not receivable due 
to terrain losses in the coverage area to be preserved.
    126. The Commission declines to adopt the proposals advanced by the 
Affiliates Associations. First, it does not interpret the Spectrum Act 
to prohibit anything greater than a de minimis change in a station's 
coverage area. Rather, as discussed, the Commission agrees with T-
Mobile that ``the reasonableness requirement [in Sec.  6403(b)(2)] by 
its plain terms is a measure of effort--i.e., the actions taken to 
achieve a goal--and not of the outcome itself.'' Hence, the demand that 
the outcome of the repacking process be no more than a 0.5 percent 
change in the geographic area served, finds no support in the statute.
    127. Nor does the Spectrum Act require us to expand stations' 
contours to account for terrain losses. The Commission adopted the 
``equal area'' approach for replicating the area within a station's 
contour using the station's existing antenna pattern. This approach is 
designed to allow a station to use its existing facilities, allowing 
for some adjustments, to serve the same geographic area on the channel 
to which it is reassigned in the repacking process. The Affiliates 
Associations support our approach, but seem to demand that we go even 
further by expanding a station's contour to compensate for terrain 
losses resulting from propagation differences on the reassigned channel 
are predicted to reduce the coverage area within the contour. While not 
entirely clear, the Affiliates Associations seem to demand that the 
Commission preserve the same square kilometers of coverage, not a 
station's actual coverage area prior to repacking. Such an approach 
finds no support in the Spectrum Act, which specifically directs us 
make ``all reasonable efforts to preserve . . . the coverage area . . . 
of each broadcast television licensee, as determined using the 
methodology described in OET Bulletin 69.'' Consistent with our 
approach to preserving population served, the Commission interprets the 
statute to direct us to make all reasonable efforts to protect the 
geographic area that a station actually served as of February 22, 2012. 
This approach, which is consistent with our efforts to replicate 
coverage areas during the digital transition, is designed to ensure 
that after the repacking process, broadcasters will continue to reach 
the same viewers, and that viewers will continue to have access to the 
same stations. Expanding contours, as the Affiliates Associations' 
request, would thus be inconsistent with the statute, because it would 
not maintain the status quo; to the contrary, it would expand the 
geographic area that a station actually serves. The Affiliates 
Associations' proposal could provide the station with a ``windfall'' in 
the form of new viewers or, require us to undertake costly efforts to 
extend interference protection to areas with no viewers. The Commission 
does not believe that either of these outcomes was intended by the 
Spectrum Act.
    128. Second, expanding contours in the repacking process is not 
practical or realistic, because it would compromise the repacking 
process and, ultimately, the success of the auction. Allowing contour 
extensions during the repacking process will make it more difficult to 
repack stations efficiently. The Commission would face the same problem 
if we were to prohibit any channel reassignment that resulted in 
anything greater than a de minimis change in the geographic area 
served. Reducing the number of potential channels significantly limits 
the Commission's flexibility to assign channels in the repacking 
process, increasing the potential costs of clearing the spectrum and 
decreasing the likelihood of a successful auction outcome. The 
Commission interpreted the statute to require that we make all 
reasonable efforts to preserve each station's coverage area and 
population served without sacrificing the goal of a successful 
incentive auction. The Commission adopted a number of measures that 
will effectively address broadcasters' concerns without compromising 
the auction. Under these circumstances, the Commission need not adopt 
the proposals advanced by the Affiliates Associations to meet the 
statutory mandate.
    129. Third, broadcasters' concerns regarding the potential for 
substantial new terrain losses are exaggerated. The majority of UHF 
stations will be assigned to channels that are lower in the band than 
their original channels, because under the 600 MHz Band Plan the 
Commission will be seeking to repurpose UHF spectrum contiguously from 
channel 51 down, meaning that stations being reassigned to new channels 
within the UHF band generally will be assigned to channels lower in the 
band. Such stations are likely to experience decreases rather than 
increases in coverage lost to terrain within their contours due to the 
superior propagation characteristics of their lower frequencies.
    130. Finally, the Commission adopted a number of measures to 
effectively address the Affiliates Associations' concerns. For those 
stations that may experience a loss of coverage due to terrain, it 
adopted several measures that will allow them to remedy such losses. 
Specifically, broadcasters will be able to file initial construction 
permit applications that expand their coverage area by up to one 
percent, as long as they do not cause new interference to any other 
station. In addition, if a station is dissatisfied with its new channel 
assignment due to terrain losses, it may seek alternative transmission 
facilities on a different channel, provided a channel is available and 
the alternative facilities meet all existing technical and interference 
requirements and serve the public interest. Further, if a licensee 
wishes to provide service to a specific area that had service on its 
pre-auction channel but lacks service on its new channel, it could use 
DTS, for example, to provide that coverage. This approach will allow us 
fulfill our statutory duty to make ``all reasonable efforts'' to 
preserve broadcast licensees' coverage area and population served, as 
required by section 6403(b)(2) of the Spectrum Act.
d. Preserving Population Served
    131. As proposed in the NPRM, the Commission interprets the 
statutory term ``population served'' to mean the persons who reside 
within a station's coverage area at locations where service is not 
subject to interference from another station or stations, as specified 
in OET-69 and Sec.  73.616(e). Commenters do not specifically address 
the NPRM proposal, although they express views on how the Commission 
should make all reasonable efforts to preserve each station's 
population served in the repacking process. The Commission will 
consider a station's ``population served'' to be the population within 
the station's coverage area, as that term is defined above, less any 
portions of the areas where interference from other stations is present 
as of February 22, 2012. Also, the Commission adopted Option 2, 
proposed in the NPRM, to fulfill the statutory mandate to preserve 
``population served'' as of February 22, 2012. Thus, it will preserve 
service to the same specific viewers for each eligible station, and no 
individual channel reassignment, considered alone, will reduce another 
station's population served on February 22, 2012 by more than 0.5 
percent. This approach is consistent with the standard for evaluating 
interference from new or

[[Page 48460]]

modified television operations in Sec.  73.616(e) of the rules. As 
noted, the 0.5 percent level is considered to be no interference at 
integer precision.
    132. Option 2 will best fulfill our mandate to make ``all 
reasonable efforts'' to preserve broadcast licensees' populations 
served as of the date of enactment of the Spectrum Act, for the 
following reasons. First, the Commission agrees with NAB and other 
broadcasters that Sec.  6403(b)(2) of the Spectrum Act's charge that we 
``make all reasonable efforts to preserve . . . the population served 
of each broadcast television licensee'' directs us to protect service 
to the specific viewers who had access to a station's signal as of 
February 22, 2012. Interpreting the preservation mandate to refer to 
existing viewers as of this date seems most consistent with the 
statutory language and legislative history, as well as Commission 
precedent. The statute's use of the word ``preserve'' suggests that the 
goal is to maintain the status quo, not to replace some viewers with 
others. That interpretation is reinforced by Congress's rejection of a 
bill that would have established a goal of substantial equivalence 
rather than preservation, as well as another bill that would have 
required the FCC to preserve ``interference levels with respect to 
[each] licensee's signal'' rather than population served. Further, the 
Commission historically has been concerned with avoiding disruption of 
service to existing viewers. Thus, while Option 1 would provide greater 
efficiencies because it takes into account overall reductions in 
interference that result when broadcast stations relinquish all of 
their spectrum usage rights, the Commission declined to adopt it 
because it would not preserve service to existing viewers as of 
February 22, 2012.
    133. Second, Option 2 best satisfies our auction design needs. 
Specifically, Option 2 can accommodate pairwise interference analyses. 
Option 1 would require analysis of interference relationships on an 
aggregate rather than a pairwise basis. While Option 3 permits greater 
new interference than Option 2 (i.e., two percent per station versus 
0.5 percent per station), it is unduly restrictive because it does not 
allow any ``replacement'' interference, making repacking less 
efficient. Accordingly, Option 2 provides the most protection to 
television stations' existing populations served consistent with our 
auction design needs.
    134. Even though NAB recommends the adoption of Option 2 as the 
standard for ``all reasonable efforts,'' it also urges the Commission 
to cap the amount of total additional interference at one percent, and 
allow no new interference to stations that are currently experiencing 
ten percent or more interference within their service areas. According 
to NAB, these interference caps are necessary because, while an 
individual station can only cause a maximum addition of 0.5 percent 
interference under Option 2, ``stations repacked during the incentive 
auction process . . . would likely receive interference from multiple 
stations'' which, in the aggregate, could ``lead to significant viewer 
losses.'' Contemporaneously with the release of this Order, OET, and 
the Wireless, Media, and International Bureaus will be releasing a 
Public Notice inviting comment on a staff analysis of the potential 
impact of aggregate interference on television stations as a result of 
the repacking process. The Commission will defer a decision on NAB's 
proposal until the record is fully developed on the requested cap. The 
Commission will resolve the issue in a subsequent Order that will be 
released no later than the release of the Comment PN, and well in 
advance of the incentive auction.
3. Facilities To Be Protected
    135. The Commission concludes that protecting certain facilities in 
addition to those the statute requires it to protect will serve the 
public interest. The Commission also explains its decision not to 
extend protection to certain other categories of facilities.
a. Mandatory Protection of Full Power and Class A Facilities
    136. Section 6403(b)(2) of the Spectrum Act directs the Commission, 
in making any reassignments or reallocations under Section 
6403(b)(1)(B), to ``make all reasonable efforts to preserve, as of the 
date of enactment of [the] Act, the coverage area and population served 
of each broadcast television licensee.'' A ``broadcast television 
licensee'' is defined as the ``licensee of--(A) a full-power television 
station; or (B) a low-power television station that has been accorded 
primary status as a Class A television licensee'' under Section 
73.6001(a) of the Commission's rules. The Commission adopts the 
tentative conclusion that Section 6403(b)(2) mandates all reasonable 
efforts to preserve the ``coverage area and population served'' 
reflected in full power and Class A facilities (1) licensed as of 
February 22, 2012, the date of enactment of the Spectrum Act; or (2) 
for which an application for a license to cover was on file as of 
February 22, 2012. The Commission also adopts the tentative conclusion 
that the scope of mandatory protection under Section 6403(b)(2), which 
is limited to ``broadcast television licensees,'' defined by the 
Spectrum Act as full power and Class A stations only, excludes LPTV and 
TV translator stations. The Commission interprets this mandate to apply 
to full power and Class A broadcasters that do not participate in the 
reverse auction and full power and Class A broadcasters that 
participate in the reverse auction but do not submit a winning bid. The 
Commission also interprets this statutory mandate to apply to full 
power and Class A broadcasters that submit a winning bid to move from a 
UHF to a VHF channel or from a high VHF to a low VHF channel.
    137. To ensure a stable, accurate database, and to facilitate the 
repacking process, all full power and Class A television stations will 
be required to verify and certify to the accuracy of the information 
contained in CDBS with respect to their protected facilities. Prior to 
the start of the incentive auction, the Media Bureau will issue a 
Public Notice announcing each station's protected facility. All full 
power and Class A stations will be required to submit a form (to be 
developed by the Media Bureau following the release of this Order) 
specifying any changes to the information contained in CDBS and 
certifying to the accuracy of the information in CDBS or provided on 
the form for their protected facility. The Commission delegates 
authority to the Media Bureau to announce by Public Notice the deadline 
and procedures for filing the form.
    138. The Commission concludes that Section 6403(b)(2) requires all 
reasonable efforts to preserve only facilities that were in operation 
as of February 22, 2012. The full power and Class A facilities that 
were in operation as of February 22, 2012 are facilities that were 
licensed on that date or for which an application for a license to 
cover an authorized construction permit was on file.
    139. The Commission rejects claims that Section 6403(b)(2) mandates 
protection of facilities authorized in construction permits as of 
February 22, 2012. While facilities authorized in a construction permit 
are protected from interference under Commission rules, the grant of a 
construction permit standing alone does not authorize operation of 
those facilities.
b. Discretionary Preservation
    140. Although the Commission interprets the Spectrum Act to mandate 
that it protect only facilities that were in

[[Page 48461]]

operation as of February 22, 2012, it adopts the tentative conclusion 
in the NPRM that the Spectrum Act does not preclude us from exercising 
discretion to protect additional facilities beyond this statutory 
floor. That authority is encompassed within the Commission's broad 
spectrum management authority under the Communications Act.
    141. As set forth more fully below, the Commission concludes that 
the public interest is best served by extending protection to certain 
categories of facilities that were not licensed or the subject of a 
pending license to cover application as of February 22, 2012. More 
specifically, the Commission will protect: (1) The small number of new 
full power television stations that were authorized, but not 
constructed or licensed, as of February 22, 2012; (2) full power 
facilities authorized in outstanding construction permits issued to 
effectuate a channel substitution for a licensed station; (3) modified 
facilities of full power and Class A stations that were authorized by 
construction permits granted on or before April 5, 2013, the date the 
Media Bureau issued a freeze on the processing of certain applications; 
and (4) Class A facilities authorized by construction permits to 
implement Class A stations' mandated transition to digital operations. 
Except in very limited circumstances discussed below, the Commission 
will limit discretionary protection to these categories.
    142. The Commission generally will limit its discretionary 
protection to facilities in the preceding categories that are licensed 
(which in this Section of the Order encompasses both licensed 
facilities and those subject to a pending license to cover 
application), by the Pre-Auction Licensing Deadline to be announced by 
the Media Bureau. The Commission delegates authority to the Media 
Bureau to issue a Public Notice specifying the Pre-Auction Licensing 
Deadline. The Commission anticipates that the Public Notice will give 
stations at least 90 days prior notice of this deadline.
(i) New Full Power Stations
    143. As proposed in the NPRM, the Commission will exercise its 
discretion to protect the new full power television stations that were 
authorized by construction permits, but not yet licensed, as of 
February 22, 2012.
(ii) Channel Substitution Construction Permits
    144. The Commission will exercise its discretion to protect 
facilities authorized in construction permits issued to a licensed 
station to effectuate a substitution of a new channel for its licensed 
channel (a ``channel substitution'') that are licensed by the Pre-
Auction Licensing Deadline rather than their facilities licensed on 
February 22, 2012. The fact that these channel substitution allotments 
were protected in the Table prior to enactment of the Spectrum Act 
further weighs in favor of protecting the corresponding authorized 
facilities.
    145. Seven of the channel substitutions the Commission is electing 
to protect result in a station moving from a VHF to a UHF channel, 
which will encumber additional UHF spectrum by adding a new station to 
the band. If any of these stations participates in the reverse auction, 
it will have the opportunity to relinquish its newly allotted UHF 
channel through a UHF-to-VHF bid.
    146. The Commission will protect channel substitution construction 
permits only if they are licensed by the Pre-Auction Licensing 
Deadline. The Commission finds that preserving a facility for the 
channel licensed and operating on February 22, 2012 (as required by the 
Spectrum Act) as well as an authorized facility for a different channel 
that remains unbuilt would limit its repacking flexibility without 
offering sufficient countervailing public interest benefits.
    147. The Commission will protect the substitute channel facilities 
of former channel 51 licensees if they are licensed by the Pre-Auction 
Licensing Deadline. Because rulemaking petitions seeking to relocate 
stations from channel 51 are still permitted to be filed, they are not 
subject to the Media Bureau's April 5, 2013 freeze on the filing of 
certain facilities modifications, which is discussed in the following 
Section. Accordingly, the Commission will not impose the requirement 
discussed in the next Section that these facilities modifications need 
to be authorized in a construction permit by April 5, 2013 in order to 
qualify for protection.
(iii) Facility Modifications
    148. The Commission concludes that it will serve the public 
interest to extend discretionary protection to the facilities of full 
power and Class A stations authorized in construction permits that were 
granted on or before April 5, 2013 (the date on which the Media Bureau 
issued a Public Notice, the Freeze PN imposing limitations on the 
filing and processing of certain applications by full power and Class A 
television stations in light of the forthcoming auction and the need to 
plan for the repacking process See Media Bureau Announces Limitations 
on the Filing and Processing of Full Power and Class A Television 
Station Modification Applications, Effective Immediately, and Reminds 
Stations of Spectrum Act Preservation Mandate, Public Notice, 28 FCC 
Rcd 4364 (2013) (Freeze PN)), provided that the facilities are licensed 
by the Pre-Auction Licensing Deadline.
    149. Applications that were pending on April 5, 2013 that complied 
with the filing limitations set forth in the Freeze PN, or were amended 
to comply, as well as later-filed applications that comply with the 
filing limitations, will continue to be routinely processed by 
Commission staff. To the extent that such applications are granted, the 
facilities will be protected in the repacking process, provided they 
are licensed by the Pre-Auction Licensing Deadline.
    150. While the Freeze PN remains in effect, the Commission directs 
the Media Bureau to begin processing facilities modifications and 
displacement applications that were on file but were not granted by 
April 5, 2013 and were not amended to comply with the filing 
limitations set forth in the Freeze PN. The Commission emphasizes, 
however, that any such facilities, even if authorized and subsequently 
licensed by the Pre-Auction Licensing Deadline, will not be protected 
in the repacking process. However, the Commission directs the Media 
Bureau to process these applications, rather than instructing that they 
be dismissed, to afford as much flexibility to these applicants as 
possible.
(iv) Class A Television Stations Transitioning to Digital Service
    151. As explained in the NPRM, Congress authorized the incentive 
auction in the midst of the Class A television digital transition; the 
deadline for Class A stations to operate on a digital-only basis is not 
until September 1, 2015. The Commission will exercise its discretion to 
protect Class A stations' initial digital facilities that were not 
initially licensed until after February 22, 2012, including those that 
were not authorized until after the Freeze PN, provided they are 
licensed by the Pre-Auction Licensing Deadline.
    152. In order to qualify for protection, Class A digital facilities 
must be licensed by the Pre-Auction Licensing Deadline. Class A 
stations that have not completed the transition to digital service as 
of that deadline will receive protection only of their licensed analog 
facilities, to the extent protected in this Order. The Commission 
clarifies that it is not modifying the deadline for Class A stations to 
convert to digital service

[[Page 48462]]

in this Order. Licensees are free to wait until the September 2015 
deadline to complete their digital transition, but will receive 
repacking protection only for their analog facilities consistent with 
the provisions of this Order.
(v) Additional Cases
    153. World Trade Center Stations. The Commission will afford 
discretionary protection to stations affected by the destruction of the 
World Trade Center and will not require certain authorized facilities 
for these stations to be licensed by the Pre-Auction Licensing 
Deadline. The Commission will permit each of these stations to elect 
protection of either: (1) Their licensed Empire State Building 
facilities or (2) facilities at One World Trade Center (1WTC), the 
primary building of the new World Trade Center complex, that are 
authorized in a construction permit. The deadline for these stations to 
elect the facility to be protected in the repacking process is the Pre-
Auction Licensing Deadline. To be eligible for protection under the 
second option, stations must obtain a construction permit for the 1WTC 
facilities by the Pre-Auction Licensing Deadline. Such facilities, 
however, are not required to be licensed by the Pre-Auction Licensing 
Deadline in order to be protected.
    154. Stations Reallocated Pursuant to Section 331 of the 
Communications Act. The Commission will exercise its discretion to 
protect the facilities for new full power television stations on 
channel 2 at Wilmington, Delaware and channel 3 at Middletown Township, 
New Jersey that were allotted in 2013 pursuant to a court order. 
Although the Wilmington station is now licensed, the Middletown 
Township facility is not. The Commission will not require this station 
to be licensed by the Pre-Auction Licensing Deadline in order to be 
protected in the repacking process.
    155. KTNC-TV, Channel 14, Concord, California. TTBG, the licensee 
of KTNC-TV, channel 14, Concord, California, constructed and had an 
application for a license to cover on file for its authorized channel 
14 facility prior to February 22, 2012, but was operating at reduced 
power on that date (and continues to do so) due to its inability to 
satisfy a condition pertaining to non-interference to land mobile 
stations. The Commission will exercise its discretion to protect the 
facilities in TTBG's pending channel 14 license application, even if 
they are not fully operational and the station has not received a 
license by the Pre-Auction Licensing Deadline.
    156. KHTV-CD, Los Angeles, California. The Commission will not 
protect stations that are eligible for a Class A license but that did 
not file an application for such license until after February 22, 2012, 
even if the application is granted before the auction. For the reasons 
discussed in detail below, however, the Commission makes one exception 
for KHTV-CD, Los Angeles, California.
c. Non-Final License Revocation or Downgrade Proceedings
    157. The Commission clarifies that any licensee of facilities that 
is eligible for protection in the repacking process as set forth in 
this Order that is the subject of a non-final license validity 
proceeding or downgrade order will be protected until the proceeding or 
order becomes final and non-reviewable. Specifically, this treatment 
will apply to the facilities of licensees who have been downgraded from 
Class A to LPTV status, and to the facilities of full power and Class A 
licensees with expired, cancelled, or revoked licenses.
d. Facilities That Will Not Receive Discretionary Protection
    158. The Commission will not exercise its discretion to extend 
protection in the repacking process beyond the facilities discussed 
above. Below, the Commission specifically addresses its decision not to 
afford protection to pending rulemaking petitions to move from a VHF to 
a UHF channel, out-of-core Class A-Eligible LPTV stations, LPTV and TV 
translator stations, and special temporary authority and experimental 
authorizations.
(i) Pending Channel Substitution Rulemaking Petitions
    159. Section 6403(g)(1)(B) of the Spectrum Act provides that the 
Commission ``may not'' reassign a television licensee from a VHF to a 
UHF channel from the enactment date of the Spectrum Act until the 
completion of the incentive auction ``unless (i) such reassignment will 
not decrease the total amount of [UHF] spectrum made available for 
reallocation . . . or (ii) a request from such licensee for the 
reassignment was pending at the Commission on May 31, 2011.'' The 
Commission declines to exercise its discretion to protect the 
facilities requested in pending VHF-to-UHF channel substitution 
rulemaking requests. This includes the facilities addressed in 
Amendment of Section 73.622(i), Post-Transition Table of DTV 
Allotments, Television Broadcast Stations (Cleveland, Ohio), Notice of 
Proposed Rulemaking, 26 FCC Rcd 14280 (Vid. Div. 2011).
    160. The Commission disagrees with commenters who assert that 
Section 6403(g)(1)(B) compels the Commission to process and grant 
channel substitution rulemaking requests that were pending on May 31, 
2011. The statute grants the Commission the discretion to reassign a 
licensee from VHF to UHF if either of the two statutory conditions in 
this provision is satisfied, but it does not mandate such reassignment. 
Having determined that Section 6403(g)(1)(B) does not compel grant of 
the pending VHF-to-UHF petitions, the Commission directs the Media 
Bureau to dismiss any of these petitions if issuance of an NPRM would 
not be appropriate. This would be the case, for example, if the 
proposed facility would result in an impermissible loss of existing 
service or the petition fails to make a showing as to why a channel 
change would serve the public interest. The Commission further directs 
the Media Bureau to hold in abeyance any remaining petitions or related 
rulemakings proceedings and to process them once the Media Bureau lifts 
the filing freezes now in place, unless the petition is withdrawn.
(ii) Out-of-Core Class A-Eligible LPTV Stations
    161. With one exception, the Commission will not protect stations 
that are eligible for a Class A license but that did not file an 
application for such license until after February 22, 2012, even if the 
application is granted before the auction. These stations are not 
entitled to mandatory preservation because their Class A facilities 
were not licensed or the subject of a pending Class A license 
application as of February 22, 2012. Moreover, the Commission declines 
to extend discretionary protection to LPTV stations that has not filed 
an application for a Class A license as of February 22, 2012. Although 
the Commission will not protect such stations in the repacking process, 
it will provide them with an advanced opportunity to locate a new 
channel. Specifically, if such station obtains a Class A license but is 
displaced in the repacking process, it may file a displacement 
application during one of the filing opportunities for alternate 
channels. The Commission will, however, exercise its discretion to 
protect one station in this category--KHTV-CD, Los Angeles, California, 
licensed to Venture Technologies Group, LLC.
(iii) LPTV and TV Translator Stations
    162. The Commission declines to extend repacking protection to LPTV 
and TV translator stations. As discussed

[[Page 48463]]

below, the Commission adopts measures to mitigate the potential impact 
of the auction and repacking process on LPTV and TV translator 
stations, including adopting special procedures for displaced stations 
to select a new channel among the limited number of channels that will 
remain following the repacking process. The Commission will also 
initiate a rulemaking proceeding after the release of this Order to 
consider further actions to provide regulatory relief to displaced LPTV 
and TV translator stations.
    163. Protection of LPTV and TV translator stations in the repacking 
process is not mandated by Section 6403(b)(2). The protection provision 
applies only to ``each broadcast television licensee,'' which is 
defined as the ``licensee of--(A) a full-power television station; or 
(B) a low-power television station that has been accorded primary 
status as a Class A television licensee'' under Section 73.6001(a) of 
the Commission's rules. There is no basis in the text of section 
6403(b)(2) or the pertinent statutory definitions to conclude that low 
power stations that have not been accorded Class A status are entitled 
to the protections afforded by Section 6403(b)(2).
    164. Section 6403(b)(5) provides that nothing in Section 6403 shall 
be construed to ``alter the spectrum usage rights of low power 
television stations.'' This provision simply clarifies the meaning and 
scope of Section 6403; it does not limit the Commission's spectrum 
management authority.
    165. The Commission likewise declines to exercise its discretionary 
authority to protect replacement digital low power TV translator 
stations authorized pursuant to Section 74.787(a)(5) of the 
Commission's rules (``digital replacement translators'' or ``DRTs''). 
As discussed below, however, in order to mitigate the potential impact 
of the repacking process on DRTs, the Commission will afford DRT 
displacement applications priority over other LPTV and TV translator 
displacement applications in cases of mutual exclusivity. Moreover, in 
connection with the rulemaking proceeding the Commission intends to 
initiate relating to the potential displacement of LPTV and TV 
translator stations, the Commission will consider whether to create a 
new replacement translator service for stations that experience losses 
in their pre-auction service areas.
    166. Finally, the Commission adopts its proposal in the NPRM not to 
extend interference protection to LPTV or TV translator stations vis-
[agrave]-vis Class A television stations in the repacking process. 
Section 336(f)(7)(B) of the Communications Act prevents the Commission 
from approving a modification of a Class A license ``unless the . . . 
licensee shows'' that its proposal would not cause interference to low 
power television or translator facilities authorized or proposed before 
``the application for . . . modification of such a license . . . was 
filed.'' The Commission does not interpret this language, which grants 
LPTV and TV translator stations protection against changes to 
facilities proposed by Class A licensees, to restrict the Commission in 
implementing the previously unanticipated broadcast television spectrum 
incentive auction and repacking process authorized by Congress in the 
Spectrum Act.
(iv) Special Temporary Authority and Experimental Authorizations
    167. Several commenters argue that Section 6403(b)(2) requires the 
Commission to protect not only licensed facilities as of February 22, 
2012, but also any other facilities that were being used to serve 
viewers on that date, including facilities operating pursuant to 
experimental authorizations or Special Temporary Authority (``STA''). 
The Commission disagrees. STAs and experimental authorizations are, as 
their names indicate, interim, provisional, and non-permanent in 
nature. These authorizations also are secondary to all other authorized 
and licensed users, including secondary services such as the LPTV 
service. The Commission also declines to exercise its discretionary 
authority to protect such facilities.
4. International Coordination
    168. The FCC is moving quickly to coordinate 600 MHz spectrum usage 
with Canada and Mexico and is fully complying with its obligation to 
ensure that spectrum reassignments and reallocations taken by the 
Commission are coordinated with Canada and Mexico.
    169. NAB asserts in its comments on the NPRM that the Spectrum Act 
``requires coordination as a precondition to repacking.'' In a 24-page 
document filed on the eve of the Sunshine period (thus preventing in-
depth analysis and depriving interested parties of an opportunity for 
comment), NAB and other broadcasters claim that, ``the FCC must 
conclude new agreements with Canada and Mexico before conducting the 
incentive auction'' and that, to repack stations as part of the 
incentive auction, we must negotiate a ``new, pre-approved table of 
allotments with Canada and Mexico.'' We disagree with NAB that we must 
complete such coordination before the auction or the repacking process, 
either as a legal or a practical matter. As a legal matter, the 
statutory language does not impose a temporal requirement regarding 
coordination; rather, consistent with the ordinary meaning of the 
phrase ``subject to,'' we interpret the statute to mean that any 
reassignments or reallocations the Commission makes are governed or 
affected by coordination. Thus, the statute affords the FCC discretion 
in determining how to implement the coordination process, including the 
timing of that process. NAB argues to the contrary in its latest filing 
because agreements were reached in advance of the DTV transition, and 
Congress presumably was aware of that precedent when it adopted the 
Spectrum Act. NAB mischaracterizes the precedent of the DTV transition, 
and places more weight on it than it will bear. International 
coordination is an ongoing process; in the case of the DTV transition, 
coordination of some TV stations continued past the DTV transition 
deadline. Even if Congress could be assumed to share the NAB's 
subjective view of the DTV transition, however, the statutory language 
hardly can be stretched to require the Commission to conduct the 
incentive auction coordination on a schedule similar to the DTV 
coordination, given that international coordination by its nature 
involves negotiation with sovereign nations whose actions the FCC 
cannot control. For all of these reasons, we agree with CTIA and 
Verizon that preapproval by Canada and Mexico of all reassignments and 
reallocations is not required by the Spectrum Act.
    170. Further, we disagree with NAB that as a practical matter the 
Commission must complete coordination, including assignment of specific 
channel allotments, in order to carry out the repacking process. What 
is required to undertake the repacking process is a mutual 
understanding with Canada and Mexico as to how the repacking in the 
United States will be conducted to protect border stations in all 
countries from interference, and how any possible repacking could be 
conducted in Canada and Mexico should either of those countries ever 
determine that they might want to undertake such a process. Based on 
the incentive auction coordination discussions to date, the mutual 
benefit to Canada, Mexico, and the United States to find more spectrum 
to meet the burgeoning demand for wireless broadband, and our shared 
history of cooperative spectrum coordination, we expect to reach 
arrangements with

[[Page 48464]]

Canada and Mexico that will enable us to carry out the repacking 
process in a manner that is fully consistent with the requirements of 
the statute and our goals for the auction.
    171. While NAB claims that the Spectrum Act requires the Commission 
to conduct the incentive auction coordination the same way it conducted 
the DTV coordination, it also asserts that the amount of time required 
for the DTV coordination will make it impossible for the FCC to do so 
prior to the incentive auction and the repacking process. Contrary to 
NAB's arguments, the incentive auction is not the DTV transition: 
Unlike the former, the latter involved a time-consuming television 
station-by-television station coordination. While NAB is correct that 
the coordination process can take time, the FCC, as explained above, 
has already been engaged with Canada and Mexico on incentive auction 
coordination for years.
    172. As the foregoing discussion clearly demonstrates, NAB's 
suggestion that the Commission is waiting until after the incentive 
auction and the repacking process to begin coordination, or that it is 
``planning to reach agreements with Canada and Mexico only after the 
auction,'' is simply wrong. The Commission is making an all-out effort 
to reach arrangements. NAB's further suggestion that coordination must 
not be ongoing because broadcasters have not been briefed on it is also 
wrong. The Commission regards the confidentiality of the ongoing 
government-to-government incentive auction coordination discussions as 
critical to their ultimate success.
    173. The Commission noted in the NPRM that ``modified domestic 
rules might be necessary in order to comply with any future agreements 
with Canada and Mexico regarding use of the 600 MHz Band.'' In addition 
to cross-border spectrum sharing arrangements, the Commission sought 
comment in the NPRM on possible changes to FCC rules. While the FCC 
received comments regarding the arrangements, discussed above, it 
received none regarding possible rule changes. We have determined that 
minor changes to section 27.57(b) are required to include the spectrum 
band to be auctioned and to make the rule applicable to wireless 
services. Therefore, we adopt these changes.

C. Unlicensed Operations

    174. The Commission will allow TV white space (TVWS) devices to 
operate on any unused television channels following the incentive 
auction. The Commission also intends to designate, after additional 
notice and opportunity for public input, one unused channel in the 
remaining television band in each area for shared use by wireless 
microphones and TVWS devices. In addition to access to these unused 
channels in the television bands, the Commission will designate the 600 
MHz Band guard bands for unlicensed use nationwide and will allow 
unlicensed use of channel 37 in locations that are not being used for 
the Radio Astronomy Service (RAS) or Wireless Medical Telemetry Service 
(WMTS). Such use will be subject to the completion of a rulemaking 
proceeding that the Commission will initiate after the release of this 
Order to consider changes to our existing part 15 rules to further 
facilitate the use of TVWS devices in the remaining television spectrum 
and flexible unlicensed use in the 600 MHz Band guard bands and on 
channel 37 (600 MHz and TVWS Part 15 Proceeding). In order to provide 
certainty to all potential bidders and to participants in the 
unlicensed device ecosystem, the Commission intends to conclude that 
rulemaking prior to the incentive auction.
1. Discussion
    175. The Commission is taking a number of actions to make available 
a significant amount of spectrum for unlicensed use in the post-auction 
television bands, the 600 MHz Band guard bands, and on channel 37, some 
of it on a nationwide basis. In total, it will make between 20 and 34 
megahertz of spectrum newly available for unlicensed use, including for 
use by unlicensed broadband devices. This new spectrum for unlicensed 
use will be in addition to the TV white space channels that will exist 
after the incentive auction. These actions will help to create 
certainty for the unlicensed industry, thereby promoting greater 
innovation in new devices and services, including increased access for 
broadband services across the country.
2. Television Bands
    176. The Commission anticipates that there will be at least one 
channel in the UHF band in all areas that is not assigned to a 
television station in the repacking process. As is the case today, 
these white space channels will be necessary to avoid interference 
between primary broadcast stations in the final channel assignment 
process. Although it also anticipates that there will be fewer unused 
television channels in the repacked television bands, the Commission 
believes that at least one of them should be available for shared use 
by wireless microphones and unlicensed devices. The Commission 
therefore intends, after additional notice and an opportunity for 
comment, to designate one television channel in each area for such 
shared use. It also agrees with commenters who argued that television 
channels that remain unused by broadcast television stations after the 
incentive auction should not be designated exclusively for wireless 
microphones, and instead should also be made available for potential 
use by unlicensed TVWS devices. Accordingly, in addition to the channel 
designated for shared use by wireless microphones and unlicensed 
devices, the Commission will make any other television channels unused 
by broadcast television stations after the incentive auction available 
for TVWS device use (to the extent consistent with the applicable 
technical rules) as well as wireless microphone use except at those 
specified times and locations where wireless microphone users have 
registered their operations for interference protection in the TV bands 
databases. In taking this approach, the Commission seeks to strike a 
balance between the interests of all users of the television bands, 
including secondary broadcast stations as well as TVWS devices and 
wireless microphones, for access to the UHF TV spectrum.
3. Guard Bands
    177. The 600 MHz Band Plan includes guard bands to prevent harmful 
interference between licensed services outside the guard bands. Under 
the Spectrum Act, these bands may be no larger than technically 
reasonable to prevent harmful interference to licensed services. 
Consistent with the Spectrum Act, the 600 MHz Band Plan the Commission 
adopts provides for a guard band between television spectrum and 600 
MHz downlinks, a guard band between 600 MHz uplinks and downlinks (a 
duplex gap), and guard bands between 600 MHz downlinks and channel 37, 
to protect licensed services from harmful interference. The Commission 
will not know until the conclusion of the incentive auction which 
specific 600 MHz Band Plan scenario it will employ, including the 
specific sizes of the guard bands. Depending on the amount of spectrum 
recovered in the auction, guard band spectrum will total at least 14 
megahertz, and as much as 28 megahertz. As an example, if the 
Commission clears 84 megahertz of spectrum, there will be a three 
megahertz guard band between channel 37 and the 600 MHz Band downlink 
band, and an 11 megahertz duplex gap between 600 MHz Band uplink and

[[Page 48465]]

downlink bands (a total of 14 megahertz). If the Commission clears 126 
megahertz of spectrum, there will be two three megahertz guard bands 
adjacent to channel 37, an 11 megahertz duplex gap, and a nine 
megahertz guard band between the 600 MHz Band downlink band and 
television licensees (a total of 26 megahertz).
    178. Permitting unlicensed operations in the 600 MHz Band guard 
bands will make additional spectrum available for unlicensed devices 
nationwide. The record provides significant support for this action. 
Unlicensed devices complement licensed services and serve a wide range 
of consumer needs. Commenters have suggested that an 11 MHz guard band, 
which the Commission is adopting for the duplex gap (and the lower 
guard band under at least one clearing scenario), would be usable for 
broadband unlicensed devices.
    179. While the Commission's part 15 rules for unlicensed use 
provide an appropriate and reliable framework for permitting low power 
uses on an unlicensed basis, a further record is necessary to establish 
the technical standards to govern such use. The appropriate assumptions 
for the technical analyses will be considered in the forthcoming 600 
MHz and TVWS part 15 proceeding. Consistent with the Spectrum Act, 
unlicensed use of the guard bands will be subject to the Commission's 
ultimate determination that such use will not cause harmful 
interference to licensed services. At this juncture, the Commission is 
confident that unlicensed devices can operate in the duplex gap under 
existing TVWS rules without causing such interference. The Commission 
tentatively concludes that devices operating at a level of 40 mW and 
having a bandwidth of six megahertz will be viable in this spectrum. It 
intend to adopt technical rules governing unlicensed use of the 600 MHz 
Band guard bands in the 600 MHz and TVWS part 15 proceeding prior to 
the incentive auction to address concerns about the potential impact on 
auction bids.
4. Channel 37
    180. The Commission also will permit unlicensed operations in 
channel 37, subject to the development of the appropriate technical 
parameters for such operations as part of our 600 MHz and TVWS Part 15 
Proceeding in order to protect the WMTS and RAS from harmful 
interference. Unlicensed operations on channel 37 will be authorized in 
locations that are sufficiently removed from WMTS users and RAS sites 
to protect those incumbent users from harmful interference.
    181. The Commission recognizes the importance of WMTS to patient 
care, and will remain mindful of this critical function when developing 
these technical parameters. It also recognizes the concerns of WMTS 
equipment manufacturers and users about the potential for unlicensed 
operations on channel 37 to cause harmful interference to the WMTS. 
Parties disagree on the appropriate interference analysis methodology 
(e.g., I/N ratio and signal attenuation factors) as well as the ability 
of the TV bands databases to provide adequate protection to the WMTS. 
The Commission will consider these issues as part of our 600 MHz and 
TVWS Part 15 Proceeding, with the objective of developing reliable 
technical requirements that will permit unlicensed operations, while 
protecting the WMTS and RAS from harmful interference.
    182. Subject to the adoption of appropriate technical rules, 
authorizing the use of channel 37 for unlicensed operations will make 
additional spectrum available for unlicensed devices on a nationwide 
basis, thereby advancing our goal of promoting innovation in new 
unlicensed devices. This will make an additional six megahertz of 
spectrum available for unlicensed devices in areas of the country that 
are not in close proximity to hospitals or other medical facilities 
that use WMTS equipment, or to RAS sites. It is appropriate to revisit 
the Commission's previous decision to prohibit unlicensed operation on 
channel 37. The repurposing of spectrum for wireless services will 
reduce the number of channels available for TVWS use, and channel 37 
could provide additional spectrum for such use in those areas where it 
is not used for the WMTS and RAS. Channel 37 spectrum could be combined 
with guard bands on one or both sides of channel 37, if the amount of 
recovered spectrum requires the use of such guard bands, to provide a 
larger band for unlicensed use. Also, since the time the Commission 
made its decision to prohibit unlicensed use of channel 37, it has 
designated multiple TV bands database administrators, has had extensive 
experience working with their databases, and has a high degree of 
confidence that they can reliably protect fixed operations. The fixed 
locations where the WMTS is used are already registered in the American 
Society for Healthcare Engineering (ASHE) of the American Hospital 
Association database, and this data could be added to the TV bands 
databases. WMTS operations could be protected by establishing minimum 
distance separations as is done to protect other fixed operations, such 
as TV stations, wireless microphones and receive sites. The TV bands 
databases should be capable of handling the large number of registered 
WMTS sites easily, and this data can be updated on a frequent basis to 
ensure that new and changed WMTS registrations are quickly reflected in 
the TV bands databases. If spectrum adjacent to channel 37 continues to 
be allocated for and used by broadcast television services, this 
approach would also benefit TVWS equipment manufacturers and users by 
allowing the Commission to consider as part of the 600 MHz and TVWS 
Part 15 Proceeding modification of the out-of-band emission limits on 
channels 36 through 38 that were designed to protect the WMTS. TVWS 
equipment manufacturers have had to avoid operation on channels 35 and 
39 to comply with the limits.
    183. With regard to the RAS, there are a limited number of sites to 
protect, and their locations could be included in a database in the 
same manner as the sites of other protected services, such as the 
Offshore Radiotelephone Service, the Private Land Mobile Radio Service 
and Commercial Mobile Radio Service (``PLMRS/CMRS''), and certain other 
receive-only sites. The Commission intends to explore in the 600 MHz 
and TVWS Part 15 Proceeding whether it would be appropriate to adopt 
rules to prohibit operation of unlicensed devices within a certain 
distance from the sites and require unlicensed device operators to 
access the database to determine whether channel 37 is available for 
their use at a given location. In addition, the Commission intends to 
seek comment on whether to adopt any other technical requirements 
necessary to protect the RAS, such as power and antenna height limits.

D. Other Services

1. Channel 37 Services
    184. Channel 37 (608-614 MHz) is allocated for both RAS and Land 
Mobile Service (the latter being limited to WMTS). The Commission 
declines to relocate WMTS stations or RAS observatories from channel 37 
and concludes that it cannot do so in accordance with the provisions of 
the Spectrum Act. The Commission's 600 MHz Band Plan includes three 
megahertz guard bands between channel 37 and any adjacent wireless 
broadband services. The Commission will establish coordination zones 
around existing RAS facilities so that any such wireless

[[Page 48466]]

broadband services can be deployed to cover the broadest area possible 
with minimal impact to RAS observatories.
a. Statutory Limit on Relocation Costs
    185. The Commission has concluded that the Spectrum Act limits its 
authority to relocate incumbent RAS and WMTS users from channel 37 
because the total costs of relocating all such users would exceed $300 
million. The Spectrum Act directs the FCC to ``evaluate the broadcast 
television spectrum'' and to ``make such reassignments of television 
channels as the Commission considers appropriate.'' The Spectrum Act 
also provides the Commission with authority to ``implement and 
enforce'' this provision of that Act ``as if . . . a part of the 
Communications Act.'' However, Sec.  6403(b)(4) of the Spectrum Act, 
which is entitled ``[p]ayment of relocation costs,'' restricts that 
discretion in certain respects. Section 6403(b)(4)(A)(iii) requires the 
Commission to reimburse, from the TV Broadcaster Relocation Fund, the 
costs reasonably incurred by ``a channel 37 incumbent user, in order to 
relocate to other suitable spectrum,'' provided that ``all such users 
can be relocated,'' and that ``the total relocation costs of such users 
do not exceed $300,000,000.'' The Commission interprets ``such users'' 
to refer to all channel 37 users; that is, all RAS and WMTS incumbents. 
The Commission thus concludes that Sec.  6403(b)(4) prohibits the 
Commission from relocating any channel 37 incumbent user, unless the 
Commission can move all of the channel 37 incumbents (i.e., all of the 
RAS and WMTS incumbents) to suitable spectrum for $300 million or less.
    186. Examination of the record reflects that the cost of relocating 
all of the RAS and WMTS incumbents from channel 37 would far exceed 
$300 million. NSF estimates that relocation costs for RAS would likely 
not exceed $1 million per site to design, build, and implement new 
receivers and feed horns or no more than $13 million total. As of 
January 13, 2014, there were more than 121,000 registered WMTS devices 
in use at more than 2,300 locations. Furthermore, most WMTS devices 
that operate on channel 37 are designed to operate only within that 
spectrum and cannot simply be retuned. Thus, relocation to different 
spectrum would require redesign and replacement of the equipment. The 
record reflects that the replacement costs of WMTS devices, on average, 
are between $6,000 and $10,000 each. The WMTS Coalition states that a 
conservative estimate of relocation costs, without factoring in 
additional costs such as for engineering and installation, would be 
almost $2 billion. The consensus among commenters is that WMTS 
operations would be too costly to relocate: No commenter has provided 
any estimate that places costs within the $300,000,000 statutory limit. 
Considering the number of registered devices and the average cost 
estimates provided for equipment replacement alone, the cost of WMTS 
relocation could easily approach one billion dollars or more. The 
Commission therefore concludes that WMTS cannot be relocated within the 
constraints specified in the statute. Because the statute requires that 
both RAS and WMTS be relocated from channel 37, and because the 
estimated costs of relocating WMTS far exceeds the statutory limit, the 
Commission concludes that none of the channel 37 incumbents will be 
relocated and both WMTS and RAS will continue to operate on channel 37 
following the incentive auction.
b. Interference Protections for Incumbent Services
    187. The introduction of wireless broadband operations on adjacent 
channels could be problematic for RAS and WMTS on channel 37 unless 
appropriate mitigation measures are taken. RAS is a receive-only 
service that uses highly sensitive receivers to examine and study radio 
waves of cosmic origin. There are twelve RAS telescopes that have been 
using channel 37 or plan to use channel 37 in the near future. Of 
these, ten comprise the National Radio Astronomy Observatory's 
(``NRAO's'') Very Long Baseline Array (``VLBA''), which are distributed 
in several locations in the United States and its territories. The 
remaining two telescopes are characterized as single dish instruments. 
The Commission protects RAS from in-band harmful interference by 
imposing field strength limits on WMTS and requiring coordination of 
WMTS use within certain distances of RAS observatories. In addition, 
TVWS devices are prohibited from operating on channel 37 and on any 
other channel within 2.4 kilometers of protected radio observatories.
    188. WMTS is used for remote monitoring of patients' vital signs 
and other important health parameters (e.g., pulse and respiration 
rates) inside medical facilities. Health care institutions are required 
to register their locations and coordinate their spectrum use through 
the ASHE, the designated frequency coordinator, prior to commencing 
operation. This process minimizes the potential of WMTS users from 
causing interference to, and receiving interference from other WMTS 
devices.
    189. The Commission adopted certain interference protection 
measures. Under the 600 MHz Band Plan it adopted, operations adjacent 
to channel 37 will remain as television or be limited to wireless 
downlink, or both, depending on the incentive auction outcome. Limiting 
new wireless operations to downlink adjacent to channel 37 eliminates 
the possibility of mobile devices, which can operate anywhere, 
transmitting on nearby frequencies in close proximity to RAS and WMTS 
installations. This in turn reduces the potential of interference from 
mobile devices to the incumbent services.
    190. The 600 MHz Band Plan also incorporates guard bands to prevent 
harmful interference between 600 MHz broadband wireless service and the 
licensed services on channel 37 which is supported by examination of 
the record. Wireless broadband base stations operate at higher power 
than mobile devices and pose a harmful interference risk if operated 
adjacent to channel 37 in locations near WMTS sites. A three megahertz 
guard band on either side of channel 37 is technically reasonable to 
provide protection from OOBE and overload interference to WMTS from 
adjacent wireless broadband services. This guard band will ensure that 
OOBE from nearby wireless base stations do not significantly raise the 
noise floor in channel 37, which otherwise could impact a receiver's 
ability to reliably detect and demodulate desired signals. In addition, 
this guard band will prevent harmful interference caused by overload in 
the adjacent channels. Such interference could force active components 
in WMTS receivers into compression resulting in desensitization. The 
analysis in the Technical Appendix of the Report and Order corroborates 
our conclusion.
    191. If the auction clears less than 84 megahertz of spectrum, the 
spectral environment around channel 37 will remain the same, with 
channels 36 and 38 available for television operations. Consistent with 
current rules, which do not provide any specific protections for 
channel 37 incumbents beyond the digital television (DTV) out-of-band 
emission (OOBE) limits, the Commission will not implement guard bands 
between channel 37 and adjacent television operations in that case. The 
WMTS community argues that an increased number of television stations 
could be assigned to channels 36 and 38 in the repacking process, and 
that

[[Page 48467]]

WMTS operations located near a DTV transmitting antenna will experience 
a reduction in useable spectrum of more than 20 percent, effectively 
reducing system capacity for WMTS operations. The need to relocate 
stations to channels 36 or 38 will depend on the results of the 
auction. If stations are relocated to these channels, the extent of any 
potential interference to WMTS will depend in large part on the 
locations of the stations. Under certain scenarios channels 36 or 38 
would not be used at all for television service. Some stations 
currently operating on channels 36 or 38 may choose to participate in 
the auction or be reassigned to other channels in the repacking 
process, making channel 37 more usable for WMTS in some locations. 
While the Commission is sensitive to the desire to minimize any 
detrimental impact on WMTS, under the current circumstances, WMTS will 
not receive enhanced protection if additional stations are added to 
channels 36 or 38 as a result of the repacking process.
    192. RAS poses different interference concerns than WMTS. The 
Commission's current rules do not specify protection levels for radio 
astronomy sites. The RAS has been able to function successfully on 
channel 37 due to the relatively stable spectral environment associated 
with television operations on adjacent channels and the flexibility the 
Commission has had in locating television stations far away (both 
geographically and spectrally) from RAS locations. Because of the 
extreme sensitivity of the RAS receivers, wireless operations near 
channel 37 could cause harmful interference following the auction. 
However, a collateral benefit of our decision to establish guard bands 
to prevent harmful interference to WMTS from adjacent wireless 
operations also provides protection to RAS. In other words, because the 
guard bands for WMTS provide frequency separation from wireless 
services, the physical separation necessary for wireless services to 
protect RAS from harmful interference decreases significantly.
    193. Recognizing the value of providing as much flexibility as 
possible to new 600 MHz Band licensees, the Commission is not adopting 
any specific constraints on wireless fixed and base station locations 
operating in the 600 MHz downlink band, but instead will require any 
new 600 MHz licensee to coordinate with National Science Foundation 
(NSF) prior to commencing operations at permanent fixed locations near 
RAS observatories. Requiring coordination will provide the necessary 
certainty to RAS observatories that their sites will be protected. 
Specifically, the Commission will require such coordination for 
stations within 25 kilometers of a VLBA installation. Staff analysis to 
support these separation distances is detailed in the Technical 
Appendix of the Report and Order. Because the RAS observatories are 
generally located in remote locations, the Commission does not expect 
dense wireless deployment near those sites. Thus, this requirement does 
not present a significant burden to 600 MHz wireless licensees' network 
because the number of necessary coordination is expected to be minimal. 
In addition, many observatories are also protected by terrain features 
(e.g., nearby mountains) that block wireless signals, making 
coordination, in most cases, a simpler process.
    194. The Commission notes that the only two single dish radio 
astronomy installations that operate in channel 37 are the Green Bank, 
WV and Arecibo, PR observatories. The Commission's rules already 
require specific procedures for wireless operations near those 
locations. The Commission also notes that in many cases, geographic 
features that protect RAS sites will block wireless system signals. 
Consistent with Sec.  1.924, the Commission will require wireless 
licensees to provide the following information: Identification of the 
geographical coordinates of the antenna location (NAD-83 datum), the 
antenna height, antenna directivity (if any), type of emission, and 
effective isotropic radiated power. The Commission strongly encourages 
the parties to cooperate so as not to unreasonably frustrate the 
operations of RAS or wireless operations.
2. Television Fixed Broadcast Auxiliary Stations
    195. As discussed above, we will continue to license fixed BAS on a 
secondary basis in the television bands following the incentive 
auction. As a result of the incentive auction and repacking process, 
however, BAS operators will be required to vacate the 600 MHz Band no 
later than the end of the Post-Auction Transition Period. Following the 
issuance of the Channel Reassignment Public Notice (``Channel 
Reassignment PN''), BAS operations will have significant advance notice 
of the channels they may need to vacate, which will assist them in 
advance planning for that process.
    196. Notification Procedures for Operations in the 600 MHz Band and 
the Post-Auction Television Bands. We agree with CTIA that requiring 
BAS to discontinue operations and/or relocate is necessary to produce 
fully available spectrum to meet the growing demand for wireless 
services. Therefore, while we will continue to license fixed BAS on a 
secondary basis in the UHF spectrum that remains allocated and assigned 
to full power television services nationwide, we will require all fixed 
BAS stations to cease operating and relocate from the 600 MHz Band no 
later than the end of the Post-Auction Transition Period (i.e., 39 
months after issuance of the Channel Reassignment PN). Additionally, 
before the end of this transition period, if a new 600 MHz licensee 
intends to commence operations, the 600 MHz licensee must provide 30 
days' advance notice to the BAS operator that it intends to commence 
operations and that the BAS station is likely to cause harmful 
interference to those operations. The BAS operator must cease operating 
on that channel within 30 days of receiving notice. The few commenters 
addressing fixed BAS relocation issues are generally supportive of this 
notification approach. The notice from the 600 MHz licensee to the BAS 
licensee must take the form of a letter, by certified mail, return 
receipt requested. A 30-day notice period will serve the public 
interest by both protecting BAS operations and speeding the deployment 
of new broadband wireless services.
    197. In addition, as a secondary service, BAS may not cause 
interference to repacked television stations. Should a repacked 
broadcast television licensee in the 600 MHz Band or the repacked UHF 
Band experience harmful interference from a BAS licensee, the BAS 
licensee must, pursuant to the Commission's rules, immediately cease 
operations and may not resume operations until the interference problem 
is resolved.
    198. Operations in the Guard Bands. We also will require that BAS 
operations on channels that include frequencies that will be reserved 
for guard bands pursuant to this Order cease operations on those 
channels. As discussed above, the 600 MHz Band includes guard bands 
(including the duplex gap), and consistent with the Commission's 
proposal in the NPRM, we will permit only low power operations in those 
bands. We will establish specific rules for low power operations in the 
guard bands in the 600 MHz and TVWS Part 15 Proceeding. All BAS 
operations in spectrum reserved for guard bands will be required to 
cease operating on that spectrum no later than the end of the Post-
Auction Transition

[[Page 48468]]

Period (i.e., 39 months after the issuance of the Channel Reassignment 
PN).
3. Low Power Auxiliary Stations (LPAS) and Unlicensed Wireless 
Microphones
    199. Low power auxiliary station (``LPAS'') operations, which are 
currently authorized only for broadcast and certain related entities, 
are intended for uses such as wireless microphones, cue and control 
communications, and synchronization of TV camera signals (referenced 
collectively as ``wireless microphones''). The Commission's rules 
provide for licensed LPAS operations on unused television channels on a 
secondary, non-exclusive basis. The Commission also currently permits 
certain unlicensed operations of wireless microphones (including 
related devices) in the television bands pursuant to a limited waiver 
of Part 15 rules.
    200. The Commission discussed wireless microphone operations in the 
television bands, where it provide additional opportunities for access 
to available channels following the incentive auction, and in the 600 
MHz Band guard bands, where it will permit microphone users to operate, 
subject to the forthcoming rules for low power operations in those 
bands. In addition, as discussed, during the post-auction transition 
period the Commission will allow wireless microphone users to continue 
to operate in the repurposed spectrum pursuant to certain conditions. 
The Commission also will be initiating a proceeding in the next few 
months to address the needs of wireless microphone users over the 
longer term, both through revisions to our rules concerning use of the 
television bands and through promotion of opportunities using spectrum 
outside of the television bands.
a. Operations in the Post-Auction Television Bands
    201. Under current rules, the television channels available for 
wireless microphones include two unused channels (when available) in 
the UHF band near channel 37, where unlicensed TVWS device operations 
currently are prohibited, as well as any other channels available at 
locations that are separated from television stations by specified 
separation distances. The number of these other channels varies 
depending on location, and often may include channels that also can be 
used by unlicensed TVWS devices. Licensed LPAS operators may obtain 
protection from interference from TVWS devices on those channels by 
reserving them at specified locations and times of operation in the TV 
bands databases. In addition, certain qualifying unlicensed wireless 
microphone operators also can obtain interference protection from TVWS 
devices at specified times by registering with the Commission, enabling 
them to have their operations included within the TV bands databases.
    202. The Commission takes several steps in this proceeding to 
ensure that the reduced amount of television spectrum that remains 
following the incentive auction can continue to accommodate wireless 
microphone operations, along with other uses of this spectrum, in an 
efficient and effective manner. First, the Commission revised its rules 
for co-channel operations to expand the areas where wireless 
microphones may be used in the television bands. Second, although there 
may no longer be two unused television channels available for wireless 
microphones following the incentive auction, the Commission intends to 
designate one television channel that is not assigned to a television 
station in the repacking process for use by both wireless microphones 
and unlicensed TVWS devices. In addition, the Commission will propose 
further steps in the near term in the 600 MHz and TVWS Part 15 
Proceeding to make improvements to the registration system in the TV 
bands databases. These steps will provide licensed LPAS operators a 
more timely and effective means to obtain needed protection from 
unlicensed TVWS device operations on any of the available television 
channels. On balance, the Commission concludes that the changes it is 
making best serve to address the important needs of wireless microphone 
users as well as other users that seek access to the broadcast spectrum 
that remains available for use following repacking.
    203. Co-channel Operations. To ensure that wireless microphones 
users have access to as many television channels as possible following 
the repacking process, the Commission revised its rules for co-channel 
operations in two ways. These revisions will provide wireless 
microphones with access to additional television channels in particular 
locations without raising interference concerns to television 
licensees. Such additional access may be particularly important in 
those locations where most television channels are occupied by 
broadcasters and wireless microphone users seek access to several 
channels.
    204. First, the Commission reduced the current co-channel 
separation distances applicable to wireless microphone operations in 
the television bands. The current rule, which was adopted prior to the 
transition to digital television, was designed to protect analog 
television reception and, therefore, is outdated. Further, the 
distances the rule specifies in many cases may be greater than 
necessary to protect against interference because it does not account 
for variations in power or antenna height that reduce the size of some 
stations' service areas. The Commission revised the rule to permit 
wireless microphones to operate at distances as close as four 
kilometers from a television station's predicted service contour 
(including digital or analog full power, Class A, and LPTV stations).
    205. The Commission's action aligns the separation distance rules 
for wireless microphones with those for unlicensed personal/portable 
TVWS devices, which operate at similar power levels. Personal/portable 
TVWS devices are permitted to operate with a maximum power of 100 
milliwatts and must operate at least four kilometers outside the 
protected service contour of co-channel television stations (digital or 
analog), a distance based on a power level of four watts (4,000 
milliwatts). Most wireless microphones typically operate at power 
levels of less than 50 milliwatts. For analog wireless microphones, 
even if there were as many as 16 operating simultaneously in a six 
megahertz TV channel, more than the typical six to eight microphone 
range for most existing technologies, the total transmitted power 
within a six megahertz channel will not exceed 800 milliwatts, five 
times less than the power on which the four kilometer separation 
distance required for personal/portable TVWS devices is based. Even 
were sixteen wireless microphones on a six megahertz channel to operate 
at up to 250 milliwatts, as permitted for licensed LPAS operators, the 
total transmitted power still would not exceed four watts (4,000 
milliwatts). The Commission concludes that based on its technical 
analysis that a four kilometer separation distance between wireless 
microphones and a television station's protected service contour will 
protect television reception from interference.
    206. Second, to enable licensed LPAS operators to access additional 
co-channel spectrum, the Commission also will permit licensees to 
operate even closer to television stations than the revised separation 
distances, provided that any such operations are coordinated with the 
television licensees. Based on the record before us, the Commission 
concludes that the best approach is to permit licensed LPAS users, 
including newly eligible

[[Page 48469]]

licensees, to obtain access to additional television channels at a 
given location through the coordination process. Requiring coordination 
with broadcasters effectively addresses the concerns of those 
commenters, including NAB, that oppose or express concern about 
revising the rules to provide for closer co-channel operations, based 
on the potential for interference to television operations. The 
Commission notes that many of the licensed LPAS operators, including 
both broadcasters and many users that would now be eligible for 
licenses, already coordinate with each other to share spectrum.
    207. Designating Channels for Wireless Microphones. The Commission 
anticipates that there will be at least one television channel in all 
areas of the United States that is not assigned to a television station 
in the repacking process. As is the case today, such ``white space'' 
channels will be necessary to avoid interference between primary 
broadcast stations in the final channel assignment process. Although 
the Commission anticipates that there will be fewer such unused 
television channels in the repacked television bands, it intends, after 
additional notice and an opportunity for comment, to designate one of 
these television channels in each area for shared use by wireless 
microphone and unlicensed devices. Accordingly, in addition to the 
channel designated for shared wireless microphone and unlicensed TVWS 
device use, the Commission will make any other unused television 
channels following the incentive auction available for shared wireless 
microphone and TVWS device use (to the extent consistent with the 
applicable technical rules), except at those specified times and 
locations where wireless microphone users have registered their 
operations for interference protection in the TV bands databases.
    208. The Commission will not continue to designate any television 
channels unused by television stations exclusively for the use of 
wireless microphones. The steps taken concerning wireless microphone 
operations in the repacked television bands, taken together with other 
steps to accommodate wireless microphone uses, represent a balanced 
approach to addressing the needs of wireless microphone users and the 
other users that seek access to the more limited television spectrum 
that is likely to remain available for use following the incentive 
auction.
    209. Given the Commission's decision to no longer designate two 
unused television channels, where available, exclusively for wireless 
microphones, it plans to take steps to improve the operation of the TV 
bands databases to enable licensed LPAS operations to obtain more 
immediate protection from interference from TVWS devices on any 
available television channels at the times and locations that these 
wireless microphone users need. The Commission plans to address how 
best to make these improvements in the 600 MHz and TVWS Part 15 
Proceeding.
b. Operations in the Guard Bands
    210. The Commission will allow unlicensed devices to operate in the 
guard bands, including the duplex gap. To make additional spectrum 
outside of the repacked television bands available for wireless 
microphone uses, it also will permit wireless microphone devices to 
operate in the 600 MHz Band guard bands on an unlicensed, unprotected 
basis provided that they comply with the technical requirements the 
Commission will adopt for low power device operations in these guard 
bands in the 600 MHz and TVWS Part 15 Proceeding.
    211. In addition to permitting unlicensed wireless microphone 
operations in the guard bands, the Commission will permit certain 
wireless microphones operations in a portion of the duplex gap on a 
licensed basis. Broadcasters and cable programming networks contend 
that without the continued availability of unused television channels 
for interference-free wireless microphone operations, they will have 
difficulty providing certain programming, including emergency 
information, on which their ability to provide vital information to 
first responders and the public depends. Without access to some guard 
band spectrum for this purpose, there may be areas in the country where 
there would be little if any certain access to UHF band spectrum for 
wireless microphone operations on a protected basis. Accordingly, the 
Commission concludes that the public interest will be served by 
allowing broadcasters and cable programming networks using wireless 
microphones on a licensed basis in a portion of the duplex gap to 
obtain interference protection from unlicensed devices at specified 
times and locations, on an as-needed basis. In the 600 MHz and TVWS 
Part 15 Proceeding, the Commission will examine how best to provide 
access to a portion of the duplex gap by licensed wireless microphone 
users, while also ensuring that unlicensed users of the duplex gap can 
make use of this spectrum to provide broadband services. The Commission 
anticipates that the duplex gap would be partitioned such that six 
megahertz would be available for unlicensed broadband devices to 
operate under the existing TVWS rules for 40 mW personal/portable 
devices, and four megahertz adjacent to the 600 MHz Band downlinks 
would be available for licensed wireless microphone operations.
    212. In taking this approach in the guard bands, the Commission 
seeks to promote unlicensed operations generally while also providing 
access to spectrum for wireless microphone uses, consistent with the 
requirement that operations in the guard bands do not cause 
interference to, and serve to prevent interference to licensed services 
outside of the guard bands.

E. Allocations

    213. The Commission adopts fixed and mobile allocations to the 
Table of Allocations on a co-primary basis with broadcast television. 
Specifically, it will add fixed and mobile services to the Table of 
Allocations for UHF channels 21-36 (512-608 MHz) and 38-51 (614-698 
MHz), but not for UHF channels 14-20 (470-512 MHz) (also known as the 
``T-Band'') or for VHF channels 2-13 (54-72, 76-88, and 174-216 MHz). 
The Commission concludes that its action addresses the practical 
requirements of the incentive auction and the concerns raised by 
broadcasters and other parties. The Commission retains the allocations 
for Channel 37 for the RAS and the Land Mobile Service for WMTS.
    214. Adding fixed and mobile services to the Table of Allocations 
for UHF channels 21-36 and 38-51 is necessary to address the practical 
requirements of the incentive auction and the UHF band transition that 
follows it. The assignment, licensing and use of frequencies must be in 
accordance with the Table, yet the Commission cannot know in advance of 
the incentive auction which frequencies will be repurposed for new uses 
in which geographic areas because that depends on the outcome of the 
incentive auction. Further, by adding fixed and mobile services to the 
Table of Allocations for all of the frequencies that could be 
repurposed prior to the incentive auction, it will assure forward 
auction bidders that the frequencies on which they bid will be 
available for new, flexible uses without the need to conduct additional 
allocation proceedings post-auction that could risk delaying the 
transition and the introduction of new services. In addition, following 
the incentive auction, co-primary fixed/mobile/broadcasting allocations 
will allow

[[Page 48470]]

users that currently operate on such frequencies on either a primary or 
secondary basis--including full power, Class A and LPTV stations, TV 
translator stations, BAS stations, and LPAS--to continue operating for 
an interim period on frequencies that will be repurposed during the 
course of the UHF band transition, as well as to allow LPTV and TV 
translator stations to continue to operate on such frequencies during 
the reorganization of the UHF band.
    215. To clearly identify where broadcast television and mobile 
wireless services will be permitted, the Commission will later modify 
the Table of Allocations promptly to reflect the outcome of the 
incentive auction. Specifically, the Commission hereby delegate 
authority to the Chief of the Office of Engineering and Technology to 
take such actions as are necessary to modify the Table of Allocations 
to be consistent with the outcome of the incentive auction--e.g., to 
remove the co-primary fixed and mobile allocations from segments of the 
UHF band that will remain available only for television broadcast 
service on a nationwide basis. Our foregoing delegation to OET also 
includes authority to modify the Table to add a footnote indicating 
that fixed and mobile services are authorized only in band segments and 
in geographic areas specified in Part 27.

III. The Incentive Auction Process

    216. Consistent with the Commission's practice in past spectrum 
license auctions, we adopt rules in the Order that will allow 
subsequent determination of specific final auction procedures. 
Following the Order, a pre-auction process will precede the bidding 
process for the incentive auction. This pre-auction process will 
determine both the specific final auction procedures, based on 
additional public input, and the auction participants, through an 
application process. The process will be initiated by the release of 
the Comment PN, which will solicit public input on final incentive 
auction procedures, and which will include specific proposals for 
crucial auction components such as opening prices. Thereafter, the 
Procedures PN will specify final procedures, including dates, 
deadlines, and other final details of the application and bidding 
processes. The rules we adopt in the Order provide for the ability to 
refine aspects of the reverse and forward auctions if the record 
developed in response to the Comment PN during the pre-auction process 
reflects the need to do so. The Wireless Bureau has delegated authority 
with respect to the administration of spectrum license auctions, 
including both the reverse auction component of incentive auctions 
under the new Part 1 rules adopted in the Order and the forward auction 
component of incentive auctions pursuant to the Part 1 rules as 
modified by the Order.
    217. The Commission's practice of finalizing auction procedures in 
the pre-auction process provides adequate time for participants to both 
comment on the final procedures and to develop business plans in 
advance of the auction. This approach has worked well, and a similar 
one is all the more necessary for the incentive auction due to its 
novelty and complexity. Maintaining flexibility in the implementation 
of final procedures is a prudent approach to assuring that the 
incentive auction will take place in a timely manner and fulfill the 
goals we have established by the Order.

A. Overview and Integration of the Reverse and Forward Auctions

    218. The incentive auction will consist of a reverse and a forward 
auction. The reverse auction portion of the broadcast television 
spectrum incentive auction will collect information about the price at 
which broadcast television licensees would be willing to voluntarily 
relinquish some or all of their spectrum usage rights. The forward 
auction portion of the incentive auction will identify the prices that 
potential users of repurposed broadcast television spectrum would pay 
for new licenses to use the spectrum. This information, together with 
information from the reverse auction and subject to meeting the 
requirements for repurposing spectrum through the incentive auction, 
will determine the winning bidders for new flexible use licenses and 
the prices those bidders will pay for the spectrum licenses.
    219. The reverse and forward auctions will be integrated in a 
series of stages. Each stage will consist of a reverse auction and a 
forward auction bidding process, and stages will be run until it 
becomes clear that the overall proceeds requirements for the incentive 
auction can be satisfied. Prior to the first stage, the initial 
spectrum clearing target will be determined. Then the first stage of 
the reverse auction will be run to determine the total amount of 
incentive payments to broadcasters required to meet that spectrum 
target. The first stage of the forward auction bidding process will 
follow the reverse auction bidding process for the first stage. If the 
proceeds of the forward auction are sufficient to satisfy the final 
stage rule during the first stage, the forward auction bidding process 
will continue until there is no excess demand for licenses, and then 
the incentive auction will close. If the rule is not satisfied, 
however, a second stage of the incentive auction will be run with a 
smaller spectrum clearing target in the reverse auction and fewer 
spectrum licenses available in the forward auction. If the final stage 
rule again is not met during the second stage, additional stages will 
be run, with progressively smaller spectrum clearing targets in the 
reverse auction and fewer licenses available in the forward auction, 
until the requirements of the rule are satisfied.
    220. Here, we address how the reverse and forward auction bidding 
processes will be integrated through the spectrum clearing target, the 
stage structure, and the final stage rule. As with other components of 
the incentive auction, we adopt rules here to enable us to implement 
these components, and will establish final, specific procedures based 
on more public input during the pre-auction process.
1. Initial Spectrum Clearing Target
    221. The initial clearing target--the maximum amount of spectrum 
sought to be cleared of television stations and repurposed through the 
incentive auction--will be determined before commencement of the 
reverse and forward auction bidding processes. In this ``initialization 
step,'' each participating broadcaster will indicate its willingness to 
accept the opening price for various bid options. A bidder that accepts 
a price for a relinquishment option, whether the opening price or any 
other price offer in the reverse auction, makes a binding commitment to 
accept the relinquishment option if the auction system selects that bid 
as a winning bid. The opening price will be the highest price offer 
that the broadcaster could receive for a bidding option. The initial 
clearing target will correspond to one of the spectrum recovery 
scenarios in our 600 MHz Band Plan. The initial clearing target will be 
as high as possible given the number of broadcasters participating in 
the reverse auction and their willingness to bid at their opening 
prices, considering the parameters established for the repacking 
process and the amount of market variation to be accommodated.
    222. Consistent with our goal of allowing market forces to 
determine the highest and best use of spectrum, we choose to determine 
the initial clearing target based on information provided to the 
Commission by broadcast television licensees in the initialization 
step.
    223. Broadcast television licensees' responses to opening prices 
will

[[Page 48471]]

determine which licensees participate in the reverse auction for which 
bid options. A licensee entitled to protection in the repacking process 
that does not file an application to participate in the reverse 
auction, as well as any applicant declining to accept an opening price 
for any option--that is, declining to participate in the reverse 
auction--will be designated for assignment of a television channel in 
its pre-auction or home band. Thus, at the conclusion of the 
initialization step, the Commission will know, at a minimum, which 
television stations need to be assigned channels in their home bands in 
the repacking process, and can set the initial spectrum clearing target 
accordingly. The Commission will use optimization techniques to 
determine the amount of spectrum that can be cleared or repurposed 
based on the feasibility of assigning channels to non-participating 
stations that are entitled to protection in the repacking process, as 
well as to participating stations that are willing only to move to a 
lower band.
2. Stage Structure
    224. In the Order we conclude that the incentive auction will be 
conducted in a series of stages. Each stage will be associated with a 
spectrum clearing target for bidding in the reverse auction and a 
corresponding license inventory for bidding in the forward auction. The 
clearing target and license inventory will be reduced from stage to 
stage, if the final stage rule is not satisfied. We adopt this 
structure in large part to facilitate bidder participation. Unlike 
alternatives in which the reverse auction bidding process would be run 
for all possible clearing targets before the forward auction bidding 
process, or vice versa, the stage structure does not require bidders in 
either side of the auction to provide more bid information than is 
needed for the auction to close. Further, bidders in each side of the 
auction will receive some information about conditions on the other 
side, facilitating their bidding decisions. In addition, stopping the 
incentive auction at the earliest stage in which the final stage rule 
is met avoids prolonging the bidding processes unnecessarily, 
consistent with our recognition that speed is important to a successful 
auction outcome. The stage structure also provides a workable framework 
for determining the greatest amount of spectrum that can be cleared 
while satisfying the final stage rule. Because the reverse and forward 
auction bidding processes will be conducted for a common benchmark 
amount of cleared spectrum in each stage, the auction mechanism will be 
able to compare the incentive payments required to clear a given amount 
of spectrum to the forward auction proceeds available to pay for such 
clearing.
    225. Commenters agree that the stage structure we adopt will 
facilitate and encourage auction participation by broadcast television 
licensees. They note the informational advantages of a staged approach, 
including the importance of price discovery to participants. We 
disagree with one commenter that running the reverse auction in full 
for all clearing targets (a ``single-pass'') before the forward auction 
commences would simplify participation for reverse auction bidders. On 
the contrary, the single-pass proposal would deprive broadcast 
television licensees of any information about the forward auction and 
require them to reveal more information than necessary during the 
reverse auction bidding. Nor are we persuaded that the need to conduct 
forward auction bidding between the reverse auction bidding process in 
each stage would impose a significant burden on participating 
broadcasters, particularly given that the stage structure might avoid 
the need for multiple stages, thereby concluding the entire auction 
more quickly.
    226. Some wireless carriers contend that the single-pass approach 
would provide the greatest level of certainty for forward auction 
participants, thereby enhancing participation in the forward auction. 
We recognize that wireless carriers need time for planning and 
information regarding auction inventories in order to assess auction 
strategies and obtain financing. We note, however, that uncertainty 
about the number of spectrum licenses that will be available is 
inherent in the incentive auction, and affects parties on both sides of 
the auction process. In that regard, the 600 MHz Band Plan is designed 
to provide potential forward auction participants with as much 
information as possible prior to the incentive auction so that they may 
prepare for the various contingencies that may unfold during the 
bidding. With respect to specific concerns about time available to 
prepare for the auction, we further note that we will establish the 
specific timing, including the lag, if any, between auction stages and 
between the reverse and forward auction bidding processes within a 
stage, in the pre-auction process. We conclude that the stage 
structure, which shares information about supply and demand with 
forward and reverse auction participants at the same time, is the 
optimal integration method for this incentive auction because it will 
facilitate broadcaster participation and serve as an effective means of 
determining whether the final stage rule can be satisfied at various 
spectrum clearing target levels.
    227. Once the initial spectrum clearing target is determined, 
establishing the initial target for the first stage of the incentive 
auction, the reverse auction bidding process will begin. In that 
process, reverse auction bidders will be asked, in a series of bidding 
rounds, whether they are willing to accept progressively lower prices 
for the bid options. This bidding process will determine the total 
amount of the incentive payments that broadcast television licensees 
will require in order to voluntarily relinquish spectrum usage rights 
that will permit clearing of enough television channels to meet the 
initial clearing target. Generally, the prices for a bid option will 
descend from round to round until a station's voluntary relinquishment 
of rights becomes necessary to meet the spectrum clearing target.
    228. Although each stage generally will be associated with a single 
clearing target, during the first stage of the auction the target may 
be reduced or modified in certain areas if we implement a ``dynamic 
reserve price,'' under which bidders would be asked if they are willing 
to accept lower prices in areas without bidding competition (that is, 
areas where there is not active bidding by more stations than needed to 
meet the initial clearing target). If stations in such areas do not 
accept reduced prices and cannot be assigned a channel in the 
television bands, then they may be assigned a channel in the repurposed 
spectrum. Alternatively, the clearing target may have to be adjusted to 
make channels available for those stations. Details of the operation of 
any dynamic reserve price would be established in the Procedures PN 
after an opportunity for comment.
    229. Once the reverse auction bidding process has ended, the amount 
of the incentive payments required to achieve the spectrum clearing 
target will be known, as will any impairments to that target, and the 
auction system will announce the inventory of licenses available for 
bidding in the forward auction. Then the forward auction bidding 
process will be conducted to determine how much bidders are willing to 
pay for the inventory of licenses corresponding to the initial clearing 
target. The final stage rule for the incentive auction will be 
continuously evaluated during the forward auction bidding process. If 
the final stage rule is satisfied, then the

[[Page 48472]]

incentive auction will end with the first stage. Bidding will continue 
in the forward auction, however, until there is no excess demand for 
licenses. If the final stage rule is not satisfied, the incentive 
auction will proceed to a second stage.
    230. In a second stage, the spectrum clearing target in the reverse 
auction would be smaller than in the first stage. Likewise, the license 
inventory in the forward auction would be smaller than in the first 
stage. Reducing the spectrum clearing target will increase the 
likelihood of satisfying the final stage rule because less spectrum 
will need to be cleared and, therefore, fewer broadcasters will require 
incentive payments and prices in the reverse auction will generally 
fall. If the final stage rule is not satisfied in the second stage, 
then additional stages would be run with smaller clearing targets in 
the reverse auction and license inventories in the forward auction, 
until the final stage rule is satisfied.
3. Final Stage Rule
    231. The earliest auction stage that meets the ``final stage rule'' 
will be the final stage of the auction. The final stage rule is a 
reserve price with two components. The current auction stage (and 
associated clearing target) will be designated as the ``final stage'' 
if the requirements of both components are met. In the pre-auction 
process, we will consider whether to apply the final stage rule solely 
to ``major markets'' and, if so, how to identify such markets. This 
approach could significantly speed up the determination of whether the 
final stage rule is satisfied. After the final stage rule is satisfied, 
bidding will continue in the forward auction until there is no excess 
demand for licenses.
    232. The first component of the rule will be satisfied by the 
average price per MHz-pop for licenses in the forward auction or the 
total proceeds associated with those licenses, depending on the amount 
of spectrum cleared in that stage. The term ``MHz-pop'' is defined as 
the product derived from multiplying the number of megahertz associated 
with a license by the population (``pop'' or ``pops'') of the license's 
service area.
    233. Specifically, the first component of the reserve price will be 
satisfied if, for a given stage of the auction:
     The average price per MHz-pop for licenses in the forward 
auction meets a price benchmark that will be set by the Commission in 
the pre-auction process (this version of the first component will apply 
when the clearing target for the given stage of the auction is at or 
below the Commission's specified spectrum clearing benchmark),
or
     the total proceeds associated with licenses in the forward 
auction exceed the product of the price benchmark, the spectrum 
clearing benchmark, and the total number of pops for those licenses. 
That is, if $p is the benchmark average price per MHz-pop, and Q is the 
spectrum clearing benchmark, the alternative version of the first 
component will be satisfied if the total proceeds from the licenses are 
at least $p times Q times the total pops in those licenses. The 
alternative version of the first component will apply only when the 
spectrum clearing target for a given stage of the auction is above the 
Commission's spectrum clearing benchmark.

The price and spectrum clearing benchmarks will be established by the 
Commission in the Procedures PN, after an opportunity for additional 
comment.
    234. The second component of the final stage rule requires that, 
under either of the prongs of the first component, the proceeds of the 
forward auction also must be sufficient to meet the clearing costs 
identified in the reverse auction, the other expenses set forth in 
section 6403(c)(2) of the Spectrum Act, and any Public Safety Trust 
Fund amounts still needed in connection with FirstNet after the close 
of the H Block and AWS-3 auctions. The Spectrum Act requires that the 
forward auction generate proceeds sufficient to pay winning bidders in 
the reverse auction and cover relevant administrative costs of the 
auction and an estimate of relocation costs subject to reimbursement. 
See Spectrum Act Sec.  6403(c)(2). The Spectrum Act establishes the 
priority for making payments or deposits from the Public Safety Trust 
Fund as amounts are deposited into the Fund, including to fund 
FirstNet, but does not mandate additional deposits. See Spectrum Act 
Sec.  6413(b). Section 6413(b) specifies that the first $7.135 billion 
of the proceeds from auctions authorized under the Spectrum Act and 
deposited into the Fund will be used for FirstNet-related purposes. If 
the requirements of both components are met, then the final stage rule 
is satisfied.
    235. The final stage rule advances our goal of allowing market 
forces to determine the highest and best use of spectrum. The approach 
described above will allow the incentive auction to determine the best 
balance of spectrum cleared and spectrum license prices attained 
through competition, while ensuring that the auction meets the 
statutory requirements. The first component's alternative conditions 
are designed to address the unique nature of the incentive auction, in 
particular, the fact that we will not know how much spectrum will be 
available for the forward auction when establishing the price and 
spectrum benchmarks before the auction. This approach recognizes that 
if the incentive auction repurposes a relatively large amount of 
spectrum for flexible uses, per-unit market prices may be expected to 
decline consistent with the increase in available supply. The 
alternative formulation allows the first component to be satisfied in a 
stage with a high spectrum clearing target based on the total proceeds 
of the forward auction, even if the per-MHz-pop price is less than the 
benchmark price.
    236. We establish the final stage rule pursuant to the underlying 
auction provisions in the Communications Act, which direct the 
Commission to establish methods for requiring a reserve price unless it 
determines that it is not in the public interest to do so. An objective 
common to all FCC auctions of spectrum licenses is that auction prices 
generally reflect competitive market values for comparable spectrum 
licenses. The reserve price approach described in the Order will serve 
the public interest and this goal. The first component of the final 
stage rule's reserve price ensures that the forward auction recovers 
``a portion of the value of the public spectrum resource,'' as required 
by 309(j)(3)(C) of the Communications Act. Our approach based on the 
specific price and spectrum clearing benchmarks aims to assure that 
prices for licenses in the forward auction reflect competitive values 
without reducing the amount of spectrum repurposed for new, flexible-
use licenses. We will base the benchmark average per-unit price on 
factors including, but not limited to, prices received in auctions of 
comparable spectrum licenses. The Procedures PN will determine the 
specific parameters of the final stage rule after further notice and 
comment in the pre-auction process.
    237. The second component of the final stage rule's reserve price 
ensures that the forward auction recovers the clearing costs and other 
expenses identified by the Spectrum Act. We will assess the 
satisfaction of these statutory expenses in the aggregate. We also 
include FirstNet funding in the second component of the reserve price, 
consistent with section 309(j)(3)'s express command that in designing 
our auction rules we ``seek to promote the purposes specified in 
[section 1 of the Communications Act].'' Those purposes include 
``promoting safety of life and

[[Page 48473]]

property through the use of . . . radio communications.'' See 47 U.S.C. 
Sec.  151. Among the funding priorities identified in the Spectrum Act, 
including other public safety-related priorities, ensuring the build-
out of FirstNet uniquely clearly furthers this purpose, as confirmed by 
examination of the public safety provisions of the Spectrum Act, which 
is part of the same overall statutory scheme. Congress specifically 
directed the Commission to reallocate spectrum to and license FirstNet, 
instructed the Commission to ``take all actions necessary to facilitate 
the transition of the existing public safety broadband spectrum to 
[FirstNet],'' and authorized the Commission to ``take any action 
necessary to assist [FirstNet] in effectuating its duties and 
responsibilities'' under the Spectrum Act. See Spectrum Act Sec. Sec.  
6201(a), 6201(c), 6213.
    238. We also note that the auctions authorized by the Spectrum Act, 
including incentive auctions, are the sole source of federal funding 
identified by Congress for FirstNet. At this time, there are no 
additional incentive auctions planned prior to the end of fiscal year 
2022. Thus, unless FirstNet funding is part of the final stage rule for 
the broadcast television spectrum incentive auction, full funding of 
the Public Safety Trust Fund (``PSTF'') for FirstNet may be deferred 
indefinitely. We are optimistic that the proceeds from the H Block and 
AWS-3 auctions will be sufficient to fully fund amounts for FirstNet. 
Nonetheless, we include PSTF funding for FirstNet as part of the final 
stage rule to address the possibility that such amounts will not be 
fully funded from the proceeds of those earlier auctions, and pursuant 
to the explicit public safety goals set forth above. For the reasons 
explained above, we disagree with commenters that contend the 
Commission should not apply a final stage rule or conditions beyond the 
expenses enumerated in the Spectrum Act. We read section 6403(c)(2) of 
the Spectrum Act as simply requiring that the incentive auction recover 
the expenses specified therein, i.e., payments to the reverse auction 
winning bidders, the Commission's administrative expenses, and the 
estimated costs of relocation. We do not construe the Spectrum Act to 
repeal the Commission's broad authority under section 309(j)(3) to 
promote the public safety goals outlined in section 1 of the 
Communications Act, which is the basis for our inclusion of FirstNet 
support in the final stage rule.
    239. Once the final stage rule is satisfied, and bidding has 
continued in the forward auction until there is no excess demand for 
licenses, winners of generic licenses in the forward auction will 
participate in an assignment round for specific frequency assignment. 
Final prices for forward auction licenses will be set in the assignment 
round. Results of the final stage of the reverse auction will determine 
which broadcasters will relinquish which spectrum usage rights and how 
much of the auction proceeds they will receive in exchange. Stations 
that will remain on the air will proceed to the final channel 
assignment process.

B. Reverse Auction

1. Pre-Auction Process
a. Eligibility
    240. The Commission limits reverse auction participation to the 
licensees of full power and Class A television stations that the 
Commission will protect in the repacking process. For each station, the 
rights eligible for voluntary relinquishment will be the same as those 
associated with the facilities that the Commission will protect in the 
repacking process absent relinquishment of those rights.
(i) Licensees Eligible To Participate
    241. The Commission will limit reverse auction participation to 
licensees of commercial and NCE full power and Class A stations. 
Limiting reverse auction eligibility in this manner comports with the 
plain language of the Spectrum Act as well as the policies underlying 
it. Section 6403(a)(1) directs the Commission to conduct ``a reverse 
auction to determine the amount of compensation that each broadcast 
television licensee would accept in return for voluntarily 
relinquishing some or all of its broadcast television spectrum usage 
rights . . .'' The Spectrum Act defines ``broadcast television 
licensee'' as ``the licensee of (A) a full-power television station; or 
(B) a low-power television station that has been accorded primary 
status as a Class A television licensee . . .'' The Commission finds 
that the Act extends reverse auction eligibility to NCE licensees of 
full power and Class A stations. Licensees of LPTV and TV translator 
stations will not be eligible to participate in the reverse auction.
    242. The Commission interprets ``licensee'' to mean ``the holder of 
a . . . station license,'' as it is defined in the Communications Act. 
In order for a broadcaster to be a reverse auction eligible 
``licensee,'' it must hold a license for the full power or Class A 
station it wishes to offer at auction on or before the Pre-Auction 
Licensing Deadline. Thus, the small number of entities that held 
construction permits but not licenses for new full power television 
stations as of February 22, 2012 must obtain licenses for these 
stations on or before the Pre-Auction Licensing Deadline in order to be 
eligible to participate in the reverse auction.
(ii) Spectrum Usage Rights That Will Be Eligible for Relinquishment
    243. The Commission will recognize for voluntary relinquishment in 
the reverse auction those spectrum usage rights associated with 
facilities entitled to repacking protection, including those that the 
Commission must protect under the Spectrum Act and those that the 
Commission will afford discretionary protection. In all but a few 
cases, a facility must be licensed by the Pre-Auction Licensing 
Deadline in order for the spectrum usage rights covered by that 
facility to be recognized for relinquishment. With one exception, as 
discussed above, the Commission will not protect LPTV stations that 
were eligible for a Class A license but that did not file an 
application for such license until after February 22, 2012. Although 
such entities may hold Class A licenses before the Pre-Auction 
Licensing Deadline, their facilities will not be protected in the 
repacking process, and thus the spectrum usage rights covered by such 
facilities will not be recognized for relinquishment.
    244. The Commission interprets the term ``spectrum usage rights'' 
in the Spectrum Act to mean the rights of a broadcaster to use spectrum 
pursuant to a station's license. The Commission concludes that STAs and 
experimental licenses do not qualify as ``spectrum usage rights.'' 
Under its interpretation, spectrum usage rights may include a 
licensee's existing or prospective licensed rights to use spectrum. The 
Spectrum Act does not specify a date by which a broadcaster must secure 
its spectrum usage rights in order to be able to relinquish them at 
auction, and the Commission does not believe the statute requires that 
these rights be licensed by a specific date. The Commission will 
recognize for relinquishment, even if they are not licensed by the Pre-
Auction Licensing Deadline, the facilities authorized in a construction 
permit to modify the existing license of: (1) A station affected by the 
destruction of the World Trade Center that seeks to relocate to the new 
1 World Trade Center site if the station elects to protect such 
facility in the repacking process; and (2) the station allotted to 
channel 3 at Middletown Township, New Jersey pursuant to a court order. 
All other facilities must be licensed by the Pre-Auction Licensing 
Deadline for the

[[Page 48474]]

usage rights covered by that facility to be recognized for 
relinquishment. The rights eligible for relinquishment will include 
those reflected in permits granted by the April 5, 2013 issuance of the 
Media Bureau's Freeze PN, so long as the relevant facilities are 
licensed by the Pre-Auction Licensing Deadline. Class A licensees that 
received initial authorizations for their digital facilities prior to 
April 5, 2013 are subject to the Freeze PN, while such licensees 
obtaining initial digital authorizations after this date are not.
(iii) Pending Renewal and Enforcement Proceedings
    245. The Commission will allow a broadcaster with a pending 
enforcement matter or a pending license renewal application (even if 
the petition to deny period has not expired) that raises an enforcement 
issue to participate in the reverse auction, on condition that such a 
broadcaster who no longer would hold any broadcast licenses upon 
acceptance of a license relinquishment bid agrees that a share of its 
reverse auction proceeds be placed by the Commission in escrow to cover 
potential forfeiture costs. Reverse auction bidders that hold multiple 
broadcast licenses and will continue to hold at least one Commission 
license upon acceptance of their bids will remain subject to any 
pending license renewal, as well as any enforcement action against the 
station offered at auction. Such participants will be required to 
acknowledge this continuing liability in their pre-auction application.
    246. To implement this policy, if a broadcaster indicates in its 
pre-auction application that (1) it might place one or more license 
relinquishment bids, and (2) it would not control any other broadcast 
stations if its bid or bids were accepted, then the Commission will 
review its records to determine whether any outstanding enforcement 
matters exist pertaining to the broadcaster's stations, including 
complaints for which a proceeding has not yet been initiated and 
violations disclosed during the license renewal process. If 
appropriate, the Commission will dispose of pending enforcement matters 
prior to the reverse auction, such as in cases that do not require 
further inquiry and can be dismissed or resolved with the issuance of 
an admonishment or the execution of a consent decree.
    247. The Commission delegates authority to the Wireless 
Telecommunications, Media, and Enforcement Bureaus to include 
information about any pending enforcement matters against a reverse 
auction applicant that cannot be resolved before the reverse auction 
when notifying an applicant of its eligibility to participate in the 
auction. Along with that notice, the Bureaus will indicate the amount 
of reverse auction proceeds that will be placed in escrow should the 
broadcaster submit a winning license relinquishment bid. This sum will 
represent the maximum amount necessary to cover a potential forfeiture 
based on enforcement matters existing at that time. The escrow 
agreement will terminate: (1) At the later of (i) two years after the 
date on which the licensee relinquishes the station's license, or (ii) 
after the resolution of a complaint filed to collect a forfeiture; or 
(2) when all of the escrow funds are distributed. At termination of the 
escrow agreement, any funds remaining in the account will be remitted 
to the reverse auction winner. The broadcaster must agree to the escrow 
arrangement in order to participate in the reverse auction. More 
detailed procedures and the exact form of the escrow agreement will be 
discussed in the Procedures PN.
(iv) Relinquishment of Expired or Revoked Licenses and Downgraded Class 
A Licenses
    248. The Commission will not allow a station to participate in the 
reverse auction if its license has expired, is subject to a revocation 
order (collectively a ``license validity proceeding''), or is for a 
Class A station that is subject to a downgrade order, provided the 
license validity proceeding or Class A downgrade order has become final 
and non-reviewable by a date prior to commencement of the auction that 
will be specified in the Procedures PN. If the license invalidity 
determination becomes final between the time the Commission certifies a 
broadcaster's eligibility to participate in the reverse auction and 
commencement of reverse auction bidding, then it will exclude the 
broadcaster from participating in the reverse auction. If such a 
proceeding or order has not become final and non-reviewable by that 
date, the Commission will allow the licensee to voluntarily relinquish 
its spectrum usage rights in the reverse auction. Should the licensee 
submit a winning bid, the Commission will place its reverse auction 
proceeds in escrow using the procedures outlined above pending the 
final outcome of the proceeding or order. If the decision becomes final 
and non-reviewable, then the money held in escrow will be deposited 
with the other reverse auction proceeds. In the event that a winning 
bidder subject to a pending license validity proceeding or Class A 
downgrade order prevails in its appeal, the Commission will release 
from escrow to the licensee its reverse auction payment less any 
forfeiture that may result.
b. Bid Options
    249. Section 6403(a)(2) of the Spectrum Act requires the Commission 
to make available three voluntary relinquishment options to eligible 
full power and Class A broadcast television licensees: (1) ``all usage 
rights with respect to a particular television channel without 
receiving in return any usage rights with respect to another television 
channel . . .'' (license relinquishment bid); (2) ``all usage rights 
with respect to an ultra-high frequency television channel in return 
for receiving usage rights with respect to a very high frequency 
television channel . . .'' (UHF-to-VHF bid); and (3) ``usage rights in 
order to share a television channel with another licensee'' (channel 
sharing bid).
(i) License Relinquishment Bid
    250. The Commission will offer a license relinquishment bid option 
as required by the statute regardless of whether it may lead to a loss 
of service or specific programming.
(ii) UHF-to-VHF Bid
    251. In addition to allowing bids to move from a UHF to a VHF 
channel as required by the Spectrum Act, the Commission adopts 
refinements to the UHF-to-VHF bid option that will allow bidders to 
limit their bid to the high VHF band or the low VHF band. A bidder will 
not be able to specify the exact channel in the high- or low-VHF band 
to which it will be reassigned.
    252. In addition, the Commission adopts the proposal to afford 
favorable consideration to post-incentive auction requests for waivers 
of the VHF power and height limits for winning UHF-to-VHF bidders that 
may be necessary to resolve coverage problems on their new channels. 
The Commission declines, however, to establish a rebuttable presumption 
that such waivers are in the public interest. The Commission will 
consider such waiver requests on a case-by-case basis after completion 
of the repacking process. The Commission will afford such requests 
favorable consideration and grant them where possible. Also, the 
Commission will not adopt WLFM, LLC's request that a licensee which 
agrees to surrender a UHF channel in return for operation on VHF 
channel 6 be given additional flexibility to use Axcera's Bandwidth 
Enhancement Technology.

[[Page 48475]]

(iii) Channel Sharing Bid
    253. This bid option allows broadcasters to relinquish ``usage 
rights in order to share a television channel with another licensee.'' 
Under the Commission's rules, a full power television station must 
locate its transmitter at a site from which it can place a principal 
community contour over its entire community of license. The Commission 
will allow a channel sharing bidder (i.e., a sharee) to change its 
community of license in cases where it cannot satisfy the community of 
license signal requirement operating from the host (i.e., the sharer) 
transmitter site, provided that the sharee chooses a new community of 
license that, at a minimum, meets the same allotment priorities as its 
current community.
    254. A bidder may not make a community of license change that will 
result in a change in its DMA. Second, a sharee may change its current 
community of license only in cases where it cannot satisfy the 
community of license signal requirement operating from the host (i.e., 
the sharer) transmitter site. A channel sharee will be asked to 
indicate in its pre-auction application whether it can meet its 
community of license requirements from the proposed sharer's site. An 
applicant that indicates its inability to do so must provide the name 
of the new community of license it proposes to select if its channel 
sharing bid is accepted, and certify in the application that the new 
community meets the same, or a higher, allotment priority as its 
current community. Finally, the Commission clarifies that it will allow 
VHF-to-UHF channel sharing bids.
(iv) Additional Bid Options
    255. In the NPRM, the Commission sought comment on additional bid 
options not specified in the Spectrum Act--specifically whether to 
offer reverse auction participants other possibilities, such as 
enabling high VHF stations to move to a low VHF channel, or more 
broadly, it asked for comment on potential ways to incorporate bidding 
in exchange for accepting such broadcast limitations as additional 
interference or a smaller service area.
    256. In the Order we conclude that we will offer an option for high 
VHF stations to move to low VHF channels, and as with UHF-to-VHF bids, 
we will afford favorable consideration to post-incentive auction 
requests for waivers of the VHF power and height limits for winning 
high-VHF-to-low-VHF bidders that may be necessary to resolve coverage 
problems on their new channels. This option expands the set of stations 
that will have the option of moving to a low VHF station, and in so 
doing, may facilitate greater efficiency in repacking existing VHF 
stations and repurposing 600 MHz spectrum. While the Spectrum Act 
prohibits the Commission from involuntarily reassigning a station from 
a high to a low VHF channel as part of the repacking process, by 
offering this bid option, we create a mechanism by which high VHF 
stations may volunteer to be reassigned, as well as an incentive for 
doing so. Although the Spectrum Act does not specifically list high-
VHF-to-low-VHF bids as one of the reverse auction bid options, it does 
not preclude the Commission from adopting this additional bid option 
pursuant to its broad spectrum management authority.
    257. The reverse auction bidding options afforded by the Spectrum 
Act, together with allowing broadcasters moving from a UHF channel to 
specify a high or low VHF channel and allowing broadcasters to move 
from a high to a low VHF channel, provide meaningful options for 
broadcasters that will achieve the goals of the auction. With respect 
to any additional bid options beyond going off the air, channel 
sharing, or moving to a lower band, we conclude that, whatever merits 
any particular option might have for any particular licensee, the 
complexity created for auction participants would outweigh potential 
benefits and, therefore, we decline to adopt other proposed bid 
options. The record as a whole supports this conclusion.
c. Confidentiality and Prohibition of Certain Communications
(i) Confidentiality
    258. We will take all reasonable steps necessary to protect the 
confidentiality of Commission-held data of broadcast television 
licensees participating in the reverse auction. Section 6403(a)(3) of 
the Spectrum Act requires the Commission to ``take all reasonable steps 
necessary to protect the confidentiality of Commission-held data of a 
licensee participating in the reverse auction . . . including 
withholding the identity of such licensee until the [spectrum] 
reassignments and reallocations (if any) . . . become effective, as 
described in subsection (f)(2).'' See Spectrum Act Sec.  6403(a)(3). We 
will protect the confidential information of all reverse auction 
applicants, whether or not the Commission determines that their 
applications are complete and in compliance with our rules. In 
addition, we will continue to protect confidential information 
pertaining to unsuccessful bids until two years after the effective 
date. Furthermore, in the event that there is no effective date, we 
will continue to protect confidential information pertaining to the 
reverse auction until two years after the completion of the reverse 
auction. We also amend the Commission's FOIA disclosure rules to 
accommodate the confidentiality rules that we adopt today. We note that 
the Commission may disclose confidential information if it is required 
to do so by law, such as by court order.
    259. For the purpose of the statutory confidentiality requirement, 
we interpret the protections afforded to broadcast television licensees 
``participating'' in the reverse auction more broadly in order to 
facilitate broadcaster participation. For the purpose of the statutory 
requirement that at least two competing licensees ``participate'' in 
the reverse auction, we will consider a broadcast television licensee 
to be a participant only if its application is found to be complete and 
in compliance with our application rules. See Spectrum Act Sec.  6402. 
The difference in our interpretation of the terms ``participate'' 
(section 6402) and ``participating'' (section 6403(a)(3)) arises from 
the difference between the underlying purpose of each provision. 
Whereas section 6402 ensures a minimum level of competition in the 
reverse auction, a purpose which weighs in favor of including only 
those applicants that will be permitted to submit bids in the reverse 
auction, section 6403(a)(3) promotes broadcaster participation by 
ensuring that licensees' identities will not be revealed until after 
the auction, a purpose which weighs in favor of protecting any 
applicant whether or not it is permitted to submit bids in the auction. 
In any event, we exercise our discretion to treat such information as 
confidential consistent with the principle that disclosure of this 
information would likely ``cause substantial harm to the competitive 
position of the person from whom the information was obtained.'' See 
Examination of Current Policy Concerning the Treatment of Confidential 
Information Submitted to the Commission, Report and Order, 13 FCC Rcd 
24816, 24819, para. 4 (1998).
    260. From the time a broadcast television licensee applies to 
participate in the reverse auction until the spectrum reassignments and 
reallocations become effective, we will deem the following information 
confidential and subject to protection by the Commission: the name of 
the applicant licensee; the licensee's

[[Page 48476]]

channel number, call sign, facility identification number, and network 
affiliation; and any other information that may reasonably be withheld 
to protect the identity of the licensee, as determined by the 
Commission. We note that other than a broadcast television licensee's 
actual identity, any particular information about an individual 
characteristic of a licensee may or may not facilitate identification 
of the licensee. We will protect non-identifying information to the 
extent that it may reasonably be withheld to protect the identity of 
the licensee, as determined by the Commission. When the spectrum 
reassignments and reallocations become effective, the Commission will 
disclose the identities of the winning bidders and their winning bid 
amounts. Until two years after the effective date, the Commission will 
continue to protect the above-referenced confidential information 
pertaining to any unsuccessful bid. In the event that there is no 
effective date, we will continue to protect confidential information 
pertaining to the reverse auction until two years after the completion 
of the reverse auction; however, the Commission may release data 
aggregating confidential information if needed to explain the outcome 
of the auction--e.g., the aggregate share of proceeds unsuccessfully 
sought by reverse auction bidders.
    261. These additional steps are necessary and are reasonable under 
the circumstances to protect the confidentiality of licensee data. 
Participants in the reverse auction will submit bids to exit an ongoing 
business, or to make significant changes to that business (e.g., by 
changing the channels on which they operate or agreeing to share a 
channel). Section 6403(a)(3) of the Spectrum Act recognizes the 
potential competitive sensitivities of the information that such 
existing licensee bidders provide to the Commission in this context.
    262. A few commenters, worried that disclosing broadcaster 
participation could negatively impact broadcasters, suggest that the 
Commission maintain the confidentiality of broadcaster identities 
beyond the effective date, or even in perpetuity. We conclude that 
delaying the release of confidential information regarding unsuccessful 
bids until two years after the effective date will permit sufficient 
time to pass to ameliorate the potential competitive harms identified 
by commenters, and should facilitate broadcaster participation. Two 
years after the incentive auction, after substantial market changes 
have occurred and as the post-auction relocation process nears 
completion, competitors, investors, and others will be less likely to 
make assumptions based solely on a particular broadcast television 
licensee's participation in the reverse auction or the bid amounts that 
it submitted at that time. Moreover, the record contains no evidence 
contradicting this conclusion.
    263. We will not keep confidential the identities of unsuccessful 
reverse auction participants in perpetuity since protecting the 
identities of unsuccessful bidders in perpetuity would not be a 
``reasonable step'' necessary to protect the confidentiality of 
participating broadcasters' data. In determining what steps to protect 
participants' information are ``reasonable'' to take, we also consider 
the other objectives of the Spectrum Act, including the goal of using 
market forces to repurpose spectrum for mobile broadband--an objective 
that requires public trust in the auction process, and therefore 
militates in favor of transparency into the process. Particularly given 
the novelty and complexity of this new system of competitive bidding, 
it is imperative that we eventually release as much information as 
possible about the bids and the bidding process, and the Commission 
routinely releases bidding information after auctions to allow for such 
analysis to take place. The bidding information that we release will 
allow winning bidders, unsuccessful bidders, and other interested third 
parties to review and test the auction results bid-by-bid. By 
committing to releasing this information in the future, we hope to 
facilitate participation in the auction by providing assurance that the 
process will be fair and in accordance with Commission rules. Although 
it is appropriate to delay the opportunity for such analysis given the 
unique circumstances here, it would not be reasonable to prevent this 
analysis entirely. Further, the full transparency of the auction 
process should not be delayed for a lengthier period of time given the 
public interest in transparency and public trust and confidence in the 
auction system. Delaying the availability of specific bidding 
information for two years is a reasonable step necessary to protect 
participants' confidentiality in light of the circumstances, including 
our interest in promoting broadcaster participation in the reverse 
auction and the public interest in transparency.
    264. We amend our FOIA disclosure rules to accommodate the 
confidentiality rules that we adopt in the Order. Specifically, the 
information that is protected by the confidentiality rules described 
above will be added to the list of materials accepted by the Commission 
on a confidential basis. See 47 CFR 0.457(d)(1). Thus, if reverse 
auction applicants are satisfied with the scope of the protection 
afforded by these confidentiality rules, it will be unnecessary for 
them to submit a request for non-disclosure. We also amend 47 CFR 
0.457(d) of our rules to include such records in the list of those not 
routinely available for public inspection. Because the Spectrum Act was 
enacted after the OPEN FOIA Act of 2009, FOIA exemption three is 
inapplicable to such records. As such, we will permit disclosure of 
such records under FOIA only pursuant to a ``persuasive showing'' under 
47 CFR 0.457(d). Given the legislative judgment reflected in the 
Spectrum Act, we would not expect such a showing to succeed unless it 
included a demonstration either that the relevant time period for 
protection of the confidential information has passed or that 
nondisclosure of the particular data sought is otherwise beyond the 
``reasonable steps necessary'' to protect the confidentiality of 
Commission-held data of a reverse auction participant. It is also 
appropriate to adopt a rule to implement FOIA's exemption for 
confidential trade secrets and commercial or financial information for 
the purposes of the reverse auction; however, we tailor the amendment 
to the Commission's FOIA disclosure rules to conform to the scope of 
the confidentiality rules that we adopt here.
    265. In this context, any response by a reverse auction participant 
within the relevant time period will be exempted from our ex parte 
rules to the extent necessary to protect the licensee's 
confidentiality. Ordinarily, FOIA request proceedings are subject to 
our permit-but-disclose procedures. However, we may modify the 
applicable ex parte rules by order, letter, or public notice. In this 
unique context, where the party's identity itself has been treated as 
confidential, such a modification is warranted. See Media Bureau Issues 
Limited Modification to Ex Parte Requirements for Broadcasters Filing 
Notices in the Expanding the Economic and Innovation Opportunities of 
Spectrum Through Incentive Auctions Proceeding, GN Docket No. 12-268, 
Public Notice, DA 14-268 (2014).
    266. We note that the confidentiality rules that we adopt impose 
restrictions on the Commission's disclosure of certain information 
during certain time periods. We decline to extend the confidentiality 
requirements that we adopt here beyond the Commission to applicants and 
parties to the auction. The Commission's confidentiality obligations, 
along with the rule

[[Page 48477]]

prohibiting certain communications and auction procedures regarding 
available information, will provide ample protection to the identities 
and other confidential information of reverse auction participants. We 
do not wish to burden auction participants with additional 
communications prohibitions or other confidentiality requirements after 
the spectrum reassignments and reallocations--if any--become effective, 
particularly given that any such restrictions would provide only a 
minimal benefit to the unsuccessful reverse auction participants--
namely, protection from the educated guesses of other auction 
participants.
    267. The confidentiality rules do not prohibit a broadcast 
television licensee from disclosing before the auction the mere fact 
that it intends to participate in the auction, or, after the auction, 
the results of its participation. However, other rules independently 
may prohibit certain communications relating to auction participation. 
In particular, pursuant to the rule prohibiting certain communications 
described below, beginning on the reverse auction application filing 
deadline and until a public notice announces the results of the 
incentive auction, all full power and Class A broadcast television 
licensees are prohibited from directly or indirectly disclosing 
incentive auction applicants' bids or bidding strategies to any forward 
auction applicant or to any other full power or Class A broadcast 
television licensee, subject to certain specific exceptions.
    268. Given the importance of the confidentiality protections to 
promote broadcaster participation in the reverse auction, we decline to 
adopt the proposal in the NPRM to render information publicly released 
by a licensee about its participation in the reverse auction no longer 
confidential and therefore no longer subject to protection by the 
Commission. However, we caution licensees that although the 
confidential information that they file with the Commission in their 
pre-auction applications will not be made available publicly while the 
confidentiality rule applies, documents that are filed through the 
Commission's Electronic Comment Filing System (``ECFS'') and other FCC 
databases are publicly available.
    269. The Commission noted in the NPRM that participants in the 
reverse auction may have legal obligations to disclose information that 
the Commission may be required to keep confidential. We decline to 
design the competitive bidding rules solely to avoid disclosure 
obligations imposed by other governmental entities. Neither we, nor the 
commenters, have the power to determine parties' precise obligations 
under rules enforced by other agencies.
(ii) Prohibition of Certain Communications
    270. In the Order we conclude that beginning at the deadline for 
submitting applications to participate in the reverse auction and until 
the results of the incentive auction have been announced by public 
notice, all full power and Class A broadcast television licensees 
(collectively ``covered television licensees'') are prohibited from 
communicating directly or indirectly any incentive auction applicant's 
bids or bidding strategies to any other covered television licensee or 
to any forward auction applicant, subject to certain exceptions 
described below. For the purposes of the rule that we adopt here, we 
will apply the same definition of forward auction ``applicant'' that 
applies to the rule for spectrum license auctions generally. See 47 CFR 
1.2105(c)(7)(i). Generally, ``covered television licensees'' include 
all broadcast television licensees that are or could become eligible to 
participate in the reverse auction, as well as all channel sharers. The 
rule that we adopt here is intended to reinforce existing antitrust 
laws, facilitate detection of collusive conduct, and assure incentive 
auction participants that the auction process will be fair and 
objective.
    271. The rule applies solely to communications that directly or 
indirectly disclose an incentive auction applicant's bids or bidding 
strategies to any covered television licensee or to any forward auction 
applicant. The prohibition applies during a limited period of time, and 
we anticipate that the rule will serve our purposes with minimal 
intrusion into broadcasters' routine business practices, since covered 
television licensees may structure their business practices as needed 
to avoid violations, such as by instituting internal controls with 
respect to any information about incentive auction applicants' bids and 
bidding strategies.
    272. This provision prohibits certain communications between 
covered television licensees, not just reverse auction applicants. 
Given the Commission's statutory obligation to protect the identities 
of reverse auction participants, it is not practicable to limit the 
prohibition to communications between reverse auction applicants, since 
doing so would require disclosing their identities. See Spectrum Act 
Sec.  6403(a)(3). Nor is the rule limited to communications between 
covered television licensees within the same geographic area. Reverse 
auction participants will compete on a national basis for the limited 
funds that forward auction participants will contribute for new 
flexible-use licenses, and, due in part to the consequences that the 
repacking of broadcast television licensees may have across multiple 
geographic areas, all reverse auction participants will compete with 
each other for the auction system to accept their offers to relinquish 
spectrum usage rights. Thus, it is appropriate to limit communications 
between covered television licensees on a national level.
    273. To promote a fair and competitive auction, the prohibition 
against communicating information regarding incentive auction 
applicants' bids and bidding strategies will apply across the reverse 
and forward auctions. Therefore, the rule prohibits specified 
communications between a covered television licensee and a forward 
auction applicant.
    274. This prohibition across the reverse and forward auctions 
applies regardless of the geographic license areas where forward 
auction applicants intend to bid. As noted above, the results of the 
reverse auction for one participant may have effects across multiple 
geographic areas. This restriction will inhibit the ability of covered 
television licensees and forward auction applicants to form side 
agreements that could have anticompetitive effects and could alter the 
outcome of the incentive auction.
    275. With respect to covered television licensees, the prohibition 
includes all controlling interests in the licensee, and all directors, 
officers, and governing board members of the licensee. This approach is 
analogous to the definition of ``applicant'' that applies to spectrum 
license auctions and that was proposed for purposes of the rule 
prohibiting certain communications in the reverse auction. That is, for 
purposes of this rule, such parties will be considered to be the 
covered television licensee based on their relationship with such a 
licensee. The prohibition includes the controlling interests, 
directors, officers, and governing board members of a covered 
television licensee as of the deadline for submitting applications to 
participate in the reverse auction, and any additional such parties at 
any subsequent point prior to the date when the prohibition ends. For 
example, if a covered television licensee appoints a new officer after 
the application deadline, that new officer would be subject to the 
prohibition.
    276. Controlling interests include individuals or entities with 
positive or

[[Page 48478]]

negative de jure or de facto control of the licensee. De jure control 
includes holding 50 percent or more of the voting stock of a 
corporation or holding a general partnership interest in a partnership. 
Ownership interests that are held indirectly by any party through one 
or more intervening corporations may be determined by successive 
multiplication of the ownership percentages for each link in the 
vertical ownership chain and application of the relevant attribution 
benchmark to the resulting product, except that if the ownership 
percentage for an interest in any link in the chain meets or exceeds 50 
percent or represents actual control, it may be treated as if it were a 
100 percent interest. De facto control is determined on a case-by-case 
basis. Examples of de facto control include constituting or appointing 
50 percent or more of the board of directors or management committee; 
having authority to appoint, promote, demote, and fire senior 
executives that control the day-to-day activities of the licensee; or 
playing an integral role in management decisions.
    277. Members of the licensee's governing board are included in 
recognition that NCE stations and certain other stations may be 
operated by non-profit entities. Members of a governing board may be 
apprised of incentive auction applicants' bids and bidding strategies, 
and they should not be permitted to communicate such information to 
other covered television licensees or to forward auction applicants 
unless an exception to the prohibition applies.
    278. We note that the list of parties deemed to be the covered 
television licensee is not an exclusive list of parties that might 
engage in prohibited communications on behalf of a licensee. While 
communications by a listed party will necessarily be attributed to the 
associated covered television licensee, whether any potentially 
prohibited communications by other associated parties (or employees) 
are attributed to a licensee would be a fact-based determination. 
Specifically, a covered television licensee may not use agents or other 
conduits to convey information to any other covered television licensee 
or to any forward auction applicant that would otherwise be prohibited 
if communicated by the covered television licensee.
    279. We adopt two exceptions to this rule prohibiting certain 
communications. First, covered television licensees that share a common 
controlling interest, director, officer, or governing board member as 
of the deadline for submitting applications to participate in the 
reverse auction may communicate with each other regarding incentive 
auction applicants' bids and bidding strategies without violating the 
prohibition. Similarly, if a controlling interest, director, officer, 
or governing board member of a covered television licensee is also a 
controlling interest, director, officer, or holder of any 10 percent or 
greater ownership interest in a forward auction applicant, 
communications between the covered television licensee and the forward 
auction applicant will qualify for this exception. An overly broad 
prohibition restricting communications between a broadcast television 
licensee and its controlling interests during the reverse auction could 
unduly restrict bidders' flexibility. This exception to the prohibition 
recognizes various interrelationships that may exist between covered 
television licensees and permits communications between such licensees 
that will facilitate strategic decisions regarding multiple licensees 
in real time as various contingencies unfold during the auction. Thus, 
the exception will allow such licensees to participate more fully, 
particularly in a multiple-round auction, such as a descending clock 
auction.
    280. We note that this first exception only applies to controlling 
interests, directors, officers, and governing board members of a 
covered television licensee as of the deadline for submitting 
applications to participate in the reverse auction, and to controlling 
interests, directors, officers, and holders of any 10 percent or 
greater ownership interest in a forward auction applicant as of the 
deadline for submitting short-form applications to participate in the 
forward auction. Consequently, if a covered television licensee 
appoints a new officer after the application deadline, that new officer 
would be subject to the rule and not included within the exception.
    281. Under the second exception, all parties to a channel sharing 
agreement disclosed on a reverse auction application may communicate 
with each other about reverse auction applicants' (but not any forward 
auction applicants') bids and bidding strategies. Allowing such 
communications will encourage channel sharing relationships, allowing 
potential channel sharers to fully engage as various options are 
presented during the auction process. The exception to the prohibition 
for parties to a channel sharing agreement will apply only if the 
agreement has been executed prior to the reverse auction application 
filing deadline and has been disclosed on the application. Allowing 
channel sharing negotiations to commence during the auction as one 
commenter suggests presents too high of a risk of agreements to reduce 
competition in response to auction conditions.
    282. We decline to adopt any exceptions based on the existence of 
other particular types of agreements or arrangements between covered 
television licensees, such as local marketing agreements (``LMAs''), 
joint sales agreements (``JSAs''), shared services agreements 
(``SSAs''), network affiliation agreements, or any other similar 
cooperative arrangements. As described above, covered television 
licensees with such agreements may continue to communicate during the 
relevant time period so long as their communications do not directly or 
indirectly disclose incentive auction applicants' bids or bidding 
strategies.
    283. We also decline to adopt an exception based on any pre-auction 
agreement, other than a channel sharing agreement, disclosed on an 
application to participate in the reverse auction. While our rules 
apply an exception for disclosed agreements in our typical spectrum 
license auctions, the reverse auction warrants a different approach. In 
the reverse auction, participants are relinquishing spectrum usage 
rights, not seeking licenses, and there is not the same need for 
agreements to reduce entry barriers for smaller firms and promote 
competition.
    284. We reject one commenter's argument that the NPRM failed to 
include sufficient information to allow that commenter to comment on 
how to apply the Commission's anti-collusion rules in the context of 
the reverse auction. The Commission both discussed the proposed 
prohibition at length and included the language of a proposed rule to 
47 CFR 1.2205. Furthermore, the proposed rule and the associated 
discussion were based on the Commission's existing rule for spectrum 
license auctions, with respect to which there is ample precedent. The 
purpose of the NPRM was precisely to solicit comment on whether the 
reverse auction context warrants any changes to the Commission's 
established rule.
    285. Any party that makes or receives a communication regarding an 
incentive auction applicant's bids or bidding strategies that may 
violate this rule must report such communication in writing to the 
Commission immediately, and in no case later than five business days 
after the communication occurs. The obligation to make a report 
continues until the report is made and a failure to make a timely 
report constitutes a continuing violation. Parties must

[[Page 48479]]

adhere to any applicable antitrust laws, including any additional 
communications restrictions. Where specific instances of collusion in 
the competitive bidding process are alleged, the Commission may conduct 
an investigation or refer such complaints to DOJ for investigation. 
Parties who are found to have violated the antitrust laws or the 
Commission's rules in connection with participation in the auction 
process may, among other things, be subject to forfeiture of their 
winning bid incentive payments and revocation of their licenses, where 
applicable, and may be prohibited from participating in any other 
auctions.
d. Two Competing Participants Requirement
    286. Under section 6402 of the Spectrum Act, the Commission cannot 
accept the relinquishment of spectrum usage rights unless at least two 
competing licensees participate in the reverse auction. In the NPRM, 
the Commission proposed to incorporate this requirement into the 
competitive bidding rules for the broadcast television spectrum reverse 
auction and sought comment on the parameters of the rule.
    287. In the Order we conclude that ``two competing licensees 
participate'' in the reverse auction portion of the broadcast 
television spectrum incentive auction if more than one broadcast 
television licensee's pre-auction application is found to be complete 
and in compliance with the application rules, and if at least two such 
licensees are not commonly controlled. Our conclusion is based on two 
supporting conclusions. First, we conclude that a broadcast television 
licensee will be a ``participant'' if it has submitted a pre-auction 
application to be able to bid in the reverse auction that is found to 
be complete and in compliance with the application rules. The fact that 
an applicant has the ability to submit a bid in the reverse auction as 
designed under our rules, regardless of whether it ultimately chooses 
to do so, is sufficient to satisfy the ``participation'' component of 
this statutory requirement. The knowledge that another party might bid 
will create competitive pressure for a second bidder to accept lower 
incentive payments than it would absent any competition.
    288. Second, we conclude that for purposes of the Broadcast 
Television Incentive Auction, any broadcast television licensees that 
participate in the reverse auction and that are not commonly controlled 
will ``compete'' with one another. Regardless of their pre-auction 
geographic or channel location, all participants in the reverse auction 
will compete to receive incentive payments from the same limited 
source--the aggregate proceeds of the forward auction. Moreover, where 
repacking one station may have widespread effects across geographic 
areas with possible nationwide band plan implications, participants 
will affect and compete with licensees far beyond their contour, DMA, 
or channel. This competition for the forward auction proceeds satisfies 
the Spectrum Act's requirement that at least two competing licensees 
participate in the reverse auction. The comments submitted in the 
record support our interpretation.
    289. We note that the two competing participants requirement 
applies to any reverse auction component of an incentive auction 
conducted under section 6402 of the Spectrum Act, including the 
broadcast television spectrum incentive auction. As the two competing 
participants requirement is a ``generic'' provision applicable to any 
incentive auction conducted under section 6402 of the Spectrum Act, the 
Commission may apply this requirement differently in other reverse 
auctions, depending upon the particular eligibility criteria, auction 
design, and other circumstances involved in such reverse auctions.
e. Information and Certifications Required in Application To 
Participate
    290. In the NPRM, we proposed to require submission of a pre-
auction application by entities interested in participating in the 
reverse auction. We sought comment on proposed rules regarding the 
contents of the pre-auction application, on what information applicants 
should be required to provide, what certifications they should be 
required to make regarding their qualifications to participate, and the 
appropriate party to consider as the applicant.
    291. In the Order we adopt the proposal to require potential 
bidders to submit a pre-auction application to establish their 
eligibility to participate in the reverse auction. This requirement 
balances the need to collect essential information with administrative 
efficiency. The pre-auction application due dates and filing 
information will be forthcoming in the Procedures PN.
    292. We will require that each auction applicant submit information 
to establish its identity, information concerning the relevant 
license(s) and associated spectrum usage rights, and information 
regarding the parties with ownership interest in the applicant. 
Additionally, an applicant that is proposing to share a channel with 
another station must confirm that the proposed arrangement will not 
violate the Commission's media ownership rules and must provide 
information concerning the channel sharing arrangement, including a 
copy of the executed channel sharing agreement.
    293. We seek to make participation in the reverse auction as easy 
as possible for broadcasters. However, the need for sufficient and up-
to-date information regarding broadcast television licensees that may 
make binding bids to relinquish spectrum usage rights leads us to 
decline various suggestions to further streamline or simplify the pre-
auction application process. Information required by the Commission in 
other contexts is not necessarily sufficient for the reverse auction. 
Any attempt to rely on other filings would necessitate requiring 
potential participants to confirm that all information on file with the 
Commission is current and, if necessary, update any information that is 
outdated. Even then, such updates may not obviate the need for an 
auction application.
    294. We decline to require applicants to provide a two year program 
history log in order to help the Commission consider the ramifications 
of accepting a particular relinquishment bid, as one commenter 
suggests. We also decline to adopt suggestions to require applicants to 
provide additional information about their ownership interests for the 
purpose of determining the potential impact of the incentive auction on 
broadcast ownership diversity. We recognize the importance of diversity 
in broadcast ownership and support efforts to maintain such diversity. 
The suggested requirement, however, would go beyond the scope of 
information necessary to determine whether an applicant is qualified to 
participate in the reverse auction or to implement the Commission's 
auction rules.
    295. We will require an applicant to make certain certifications on 
its pre-auction application as to its legal, technical, and other 
qualifications and eligibility to participate in the reverse auction, 
including a certification as to the applicant's compliance with the 
national security restriction in section 6004 of the Spectrum Act. 
Requiring a certification of an applicant's qualifications will help to 
ensure that applicants submit accurate information. Applicants making 
false certifications to the Commission expose themselves to liability. 
Applicants should take care to review their licenses and the 
information in their pre-auction applications before making the 
required certifications and be prepared to

[[Page 48480]]

document their review confirming that they meet the applicable 
requirements, if necessary.
    296. We note that for spectrum license auctions, the Commission 
typically releases an interactive auction tutorial. The tutorial 
typically demonstrates the Commission's web-based auction application. 
Consistent with prior practice, we anticipate offering a similar type 
of tutorial for the incentive auction so that potential participants 
have the opportunity to become familiar with the auction application 
system prior to the pre-auction application deadline.
(i) Applicant
    297. The Commission proposed in the NPRM that the applicant 
identified on the pre-auction application for the reverse auction must 
be the licensee. The Order adopts this approach, under which, a 
corporate parent would not be able to file one application for licenses 
held by different licensee subsidiaries; however, a licensee holding 
multiple licenses would only be required to file one application for 
all such licenses for which it wishes to submit bids in the reverse 
auction. Requiring the applicant to be the licensee will promote 
accountability and transparency since the licensee is the entity that 
holds the spectrum usage rights that may be relinquished in the reverse 
auction. This decision is consistent with the Spectrum Act's use of the 
term ``broadcast television licensee.''
    298. For broadcast television licensees that would relinquish 
spectrum usage rights in exchange for an incentive payment and 
subsequently share a channel with another broadcaster, the Commission 
will only require that the sharee(s)--the station(s) that would 
relinquish their frequencies in order to move to the sharers' 
frequencies--apply to participate in the reverse auction. We note that 
more than two stations may share a channel.
    299. It is unnecessary for the sharer to submit an application to 
participate in the reverse auction with respect to the shared station 
unless it intends to submit its own bid. We will, however, require 
prospective sharers to provide any necessary certifications with 
respect to the channel sharing agreement in addition to sharees. It is 
reasonable and not unduly burdensome to require sharers to make such 
certifications because, as Commission licensees, they are required to 
comply with all applicable Commission rules and regulations, including 
the rules we adopt in the Order concerning channel sharing 
arrangements. Further, as a sharer voluntarily enters into a channel 
sharing arrangement, it is reasonable to require a sharer to make 
certifications in exchange for the ability to share a channel with 
another broadcaster. Moreover, the benefit of requiring a sharer to 
make certifications that are designed to ensure compliance with the 
Commission's rules and regulations concerning channel sharing 
arrangements outweighs the unlikely risk of potentially deterring 
broadcaster participation in the reverse auction.
(ii) Spectrum Usage Rights To Be Offered
    300. In the NPRM, the Commission proposed to require information in 
the pre-auction application concerning the license(s) and associated 
spectrum usage rights that may be offered in the reverse auction. In 
the Order we adopt the proposal to require reverse auction applicants 
to specify which license(s) and associated spectrum usage rights they 
might offer in the reverse auction. We further require that a reverse 
auction applicant shall provide any information needed to assure that 
the offered relinquishment pursuant to the application is consistent 
with any applicable Commission rules or action to enforce its rules. 
Such information may include but is not limited to anything related to 
ownership of, or an enforcement action concerning, the license(s) 
identified in the application to participate. The Commission needs this 
information in order to evaluate bids and run the various repacking 
algorithms. In addition, the Commission can utilize the information to 
assist in identifying auction participants offering spectrum usage 
rights subject to a pending license renewal application or an 
enforcement action, which may subject participants to liabilities that 
will have to be addressed before such participants can relinquish their 
licenses in exchange for an incentive payment.
(iii) Ownership Information
    301. In the NPRM, the Commission proposed to require a potential 
bidder to include in its pre-auction application its ownership 
information as set forth in 47 CFR 1.2112(a) of the rules, and for NCE 
stations, information regarding the licensee's governing board and any 
educational institution or governmental entity with a controlling 
interest in the station, if applicable. For the purpose of the 
incentive auction, the Commission needs to be informed of an 
applicant's ownership structure for several reasons, including: (1) To 
confirm that the applicant is who it claims to be and actually has 
rights to the license(s) it may offer to relinquish; and (2) to 
implement the prohibition of certain communications. Thus, in the Order 
we adopt the proposed rule requiring a reverse auction applicant to 
include in its pre-auction application its ownership information as set 
forth in 47 CFR 1.2112(a) of the Commission's rules.
    302. In recognition that NCE stations and certain other stations 
may be operated by non-profit entities, we will require a non-profit 
licensee to submit information regarding its governing board and to 
identify any educational institution or governmental entity with a 
controlling interest in the applicant, if applicable. The ownership 
information we currently have on file under our existing broadcast 
television rules is inadequate for the purposes of evaluating an 
applicant's eligibility to participate in the broadcast television 
spectrum reverse auction and for implementing the competitive bidding 
rules. We cannot utilize information on file in an applicant's most 
recent Form 323 or 323-E without, at a minimum, requiring the applicant 
to review and update the information. Moreover, as those forms were not 
designed to collect information for competitive bidding purposes, the 
forms may be over- and/or under-inclusive for auction purposes, even if 
an applicant's form is up-to-date. While we appreciate that broadcast 
television licensees are familiar with these forms and the information 
required, more streamlined ownership information is warranted solely 
for the purpose of the reverse auction.
(iv) Channel Sharing Agreement
    303. In the NPRM, the Commission sought comment on what information 
regarding channel sharing agreements it should require in order to 
assess an applicant's eligibility to participate in the reverse 
auction. We will require a channel sharing applicant to provide 
sufficient information and certifications to enable the Commission to 
evaluate and accept a channel-sharing bid. This includes, for example, 
a channel sharing applicant submitting an executed copy of the channel 
sharing agreement, and certifying whether it can meet its community of 
license requirements from the proposed sharer's site, and if not, that 
the new community of license proposed meets the same, or a higher, 
allotment priority as its current community.
    304. Ordinarily, the Commission does not involve itself in private 
contractual agreements between stations. While channel sharing 
agreements should be developed through private negotiations, public 
interest considerations demand that the Commission impose certain basic 
requirements on the terms and

[[Page 48481]]

conditions of channel sharing agreements. Therefore, we will require a 
channel sharing applicant to certify that the channel sharing agreement 
is consistent with all relevant Commission rules and policies, and that 
the applicant accepts any risk that the implementation of the channel 
sharing agreement may not be feasible for any reason, including any 
conflict with requirements for operation on the shared channel.
    305. As channel sharing agreements will contain information that 
identifies broadcast television licensees participating in the reverse 
auction, the Commission will take all reasonable steps necessary to 
maintain the confidentiality of such agreements in accordance with 
section 6403(a)(3) of the Spectrum Act and the rules adopted in this 
proceeding. Thus, we do not anticipate that parties will be discouraged 
from participating in the reverse auction by these requirements. 
Further, it is reasonable to require a channel sharing applicant to 
submit an executed copy of its channel sharing agreement as an 
indication of its good faith and intent to follow through with the 
channel sharing arrangement in the event the Commission accepts its 
channel sharing bid.
(v) National Security Certification
    306. Section 6004 of the Spectrum Act specifies that ``a person who 
has been, for reasons of national security, barred by any agency of the 
Federal Government from bidding on a contract, participating in an 
auction, or receiving a grant'' may not participate in a system of 
competitive bidding that is required to be conducted by Title VI of the 
Spectrum Act. This national security restriction applies to the 
broadcast television spectrum reverse and forward auctions since Title 
VI requires the Commission to conduct both auctions. In the NPRM, the 
Commission proposed that a reverse auction applicant be required to 
certify, under penalty of perjury, that it and all of the related 
individuals and entities required to be disclosed on the pre-auction 
application are not persons who have ``been, for reasons of national 
security, barred by any agency of the Federal Government from bidding 
on a contract, participating in an auction, or receiving a grant.'' For 
purposes of this certification, the Commission proposed to define 
``person'' as an individual, partnership, association, joint-stock 
company, trust, or corporation. It also proposed to define ``reasons of 
national security'' to mean matters relating to the national defense 
and foreign relations of the United States.
    307. The Order adopts these proposals. The definitions of 
``person'' and ``reasons of national security'' the Commission adopts 
are consistent with how those terms are used in other federal programs 
and are a reasonable interpretation of those terms in section 6004. 
See, e.g., 47 U.S.C. Sec.  153(39); 18 U.S.C. App. 3 Sec.  1(b). All of 
the related individuals and entities required to be disclosed on a 
potential bidder's pre-auction application are ``persons'' subject to 
this statutory participation restriction. Where the applicant is a 
legal entity rather than an individual, it has been the Commission's 
practice to consider the legal entity's controlling interests, holders 
of partnership and ownership interests, certain shareholders, and 
officers and directors to be applicants by extension. Including these 
related individuals and entities within the definition of ``person'' is 
entirely consistent with the intent of the national security 
restriction. Indeed, if such related individuals and entities were not 
considered ``persons,'' parties that are statutorily prohibited from 
participating in the reverse auction could circumvent the national 
security restriction simply through the creation of a separate entity 
to act as the ``applicant.''
    308. As with other required certifications, a reverse auction 
applicant's failure to include the required national security 
certification by the applicable filing deadline would render its pre-
auction application unacceptable for filing, and its application to 
participate in the reverse auction would be dismissed with prejudice.
f. Procedures for Processing Pre-Auction Application
    309. In the NPRM, the Commission proposed to process applications 
to participate in the reverse auction in a manner similar to the 
processing of applications to participate in spectrum license auctions. 
More specifically, the Commission proposed that no application would be 
accepted if, by the initial deadline, the applicant had failed to make 
the required certifications. Applicants would be afforded an 
opportunity to cure defects identified by the Commission after an 
initial review of the application to participate. If an applicant fails 
to make necessary corrections before a resubmission deadline, its 
application would be dismissed.
    310. The Commission further proposed that the applicant must amend 
or modify the application as promptly as possible, and in any event 
within five business days, whenever the information furnished in a 
pending pre-auction application is no longer substantially accurate and 
complete in all significant respects. Certain minor changes would be 
permitted subject to a deadline specified by public notice, but major 
changes to the pre-auction application would not be permitted. Major 
amendments would include, but would not be limited to, changes in 
ownership of the applicant or the licensee that would constitute a 
substantial assignment or transfer of control. In addition, major 
amendments would include changes to any of the required certifications 
and the addition or removal of licenses or authorizations identified on 
the pre-auction application for which the applicant intends to submit 
bids. Minor amendments would include any changes that are not major, 
such as correcting typographical errors and supplying or correcting 
information requested by the Commission to support the certifications 
made in the application. Finally, to protect the confidentiality of the 
identities of all reverse auction participants, the Commission proposed 
to notify the applicants individually as to the status of their 
applications and whether they are qualified bidders, i.e., are 
qualified to participate in the reverse auction.
    311. The Order adopts these proposals. The process has proven 
effective in the Commission's experience with spectrum license 
auctions. Pre-auction application processing provides an opportunity to 
address concerns regarding information provided by applicants, and 
helps to assure their eligibility to participate, without unduly 
limiting participation by qualified parties. Based on our experience 
with spectrum license auctions, requiring the submission of an 
application to participate is important for a number of reasons, 
including ensuring that the information the Commission relies on is up-
to-date. Limiting permissible changes in the ownership of auction 
applicants likewise assures that the Commission's review of applicant 
qualifications remains valid over the course of the auction.
    312. One commenter suggests that any otherwise-eligible broadcast 
television licensee who initially opted not to participate in the 
reverse auction ought to be able to enter the ``ongoing'' reverse 
auction without first applying to participate. We decline to adopt that 
suggestion. Allowing broadcast television licensees who have not 
applied to participate in the reverse auction, and thus have not been 
vetted by Commission staff, to enter the

[[Page 48482]]

``ongoing'' auction presents an unwarranted risk that ineligible 
parties might bid in the auction and would add unnecessary complexity 
to the reverse auction design.
2. Bidding Process
    313. The format for reverse auction bidding in each stage will be a 
descending clock auction incorporating multiple bidding rounds. We 
address the basic structure of our chosen descending clock auction 
design in terms of three basic elements: (i) Bid collection procedures 
that determine how bids are gathered using a descending clock auction 
format; (ii) assignment procedures that evaluate bids sequentially, 
taking into account interference potential, to determine which bids for 
relinquishment are accepted; and (iii) pricing procedures that 
determine the payment that a broadcaster relinquishing spectrum usage 
rights will receive. Below, we address these three elements from the 
perspective of a single television station bidding in a single stage of 
the auction.
a. Bid Collection Procedures: Descending Clock Format
    314. In the NPRM, the Commission discussed two basic reverse 
auction bid collection procedures. The first was a single round 
mechanism and the second was a multiple round procedure--a descending 
clock auction. The NPRM also discussed an additional bid collection 
procedure--``intra-round bidding''--that would enable bidders to 
indicate a specific price, between the opening and closing prices in a 
round, below which a bid option would not be acceptable.
    315. The Order adopts a descending clock auction format for the 
reverse auction, and bidders will have the option of making intra-round 
bids. However, the rules do provide the necessary flexibility to vary 
aspects of the reverse auction bidding process if it becomes necessary 
to do so because of circumstances that develop during the pre-auction 
process. In each round, bidders will be faced with relatively simple 
choices of determining whether they are still willing to accept the 
current prices for bid options. Observing the sequence of prices over 
multiple rounds will give bidders an indication of relative values for 
the different bid options, which will help them refine and feel more 
confident in their bidding decisions. This process of price discovery 
will be particularly helpful in the context of this first-time-ever 
incentive auction, in which there will be no historical results to 
guide bidder expectations. In contrast, a single round sealed-bid 
format would require bidders to make price commitments in advance of 
any information revealed through the auction process. Moreover, under a 
multiple round approach the bidder may never have to reveal its lowest 
acceptable price, unlike in a single round auction in which a bidder 
would indicate, at one time, the lowest prices at which it would accept 
various bid options.
    316. Under the descending clock format, in each round a 
participating broadcaster will be presented a price for a bid option 
and will indicate whether it is willing to accept the option at that 
price. A bidder may see a price for more than one option, but whether a 
bidder can accept a price for more than one option at a time will be 
determined in the Procedures PN. Generally, each station will see a 
price that takes into account objective factors, such as location and 
potential for interference with other stations, that affect the 
availability of channels in the repacking process and, therefore, the 
value of a station's bid to voluntarily relinquish spectrum usage 
rights. Thus, a station with a high potential for interference will be 
offered a price that is higher than a station with less potential for 
interference to other stations. Setting prices in this manner will 
encourage stations with more interference potential to remain active in 
the reverse auction bidding longer, increasing the efficiency of the 
repacking process by reducing the likelihood that such stations will 
have to be assigned channels, thereby blocking other stations with less 
interference potential. This, in turn, will reduce the overall cost of 
clearing spectrum and increase the likelihood of a successful auction.
    317. We will determine the factors to be used in setting prices in 
the Procedures PN based on additional, more focused public input. We 
will also determine in the Procedures PN the mechanism for applying 
such factors, and will consider, among other things, whether to utilize 
optimization techniques. We emphasize that we do not intend to set 
prices to reflect the potential market or enterprise value of stations, 
as opposed to their impact on the repacking process. Possible factors 
include the number of stations that a station would interfere with and 
block from being assigned channels, the population the station covers, 
or a combination of such factors. We must make all reasonable efforts 
to preserve the population served of protected stations that will 
remain on the air, making population served one of the major 
constraints on the availability of channels in the repacking process.
    318. We are not persuaded that using such factors will deter 
broadcasters from participating in the reverse auction. No station will 
be compensated less than the total price that it indicates it is 
willing to accept. Thus, we also reject any suggestion that using such 
factors in setting price offers is contrary to the Spectrum Act.
    319. Generally, the prices for bid options will start high and 
descend for each station, as long as the station's acceptance of a 
chosen bid option is not needed to meet the current spectrum clearing 
target. Each round will last for a pre-set period of time. The 
Procedures PN will address the timing of rounds and how price 
decrements will be determined after an opportunity for comment.
    320. We will also provide participating broadcasters with the 
optional flexibility of ``intra-round bidding.'' With intra-round 
bidding, a bidder will be able to indicate the lowest price at which it 
is willing to accept an option. In addition to giving bidders more 
control over the bidding process, intra-round bidding will speed the 
pace of the reverse auction, consistent with our auction design goals, 
by allowing relatively large round-to-round reductions in prices, but 
also allowing bidders to identify the precise points at which they want 
to change bid options or drop out of the auction.
b. Bid Assignment Procedures: Determining Which Bids Are Accepted
    321. Bid assignment procedures determine which stations receive 
payments in exchange for relinquishing rights. In addition to 
considering price information, the bid assignment procedures in the 
reverse auction must ensure that the stations that drop out of the 
bidding can feasibly be assigned channels in the repacking process. The 
NPRM identified two general approaches to bid assignment. The first 
approach, referred to as integer programming, would consider all the 
relevant information at once and try to find the optimal solution. 
Rather than considering all aspects of the problem at one time, the 
second option would use an iterative or ``sequential'' approach. Under 
the latter approach, when a station decides the price offered for a 
given bid option is too low and it wishes to drop out of the bidding 
for that option, the auction system would evaluate the impact of that 
station's decision, and would determine how assigning that station a 
channel in a band it considers acceptable would affect the feasibility 
of assigning channels to the stations that remain

[[Page 48483]]

active in the bidding at the current prices. Based on that evaluation, 
determinations would be made as to which bids to accept provisionally 
at the current prices.
    322. The Order adopts bid assignment procedures that will evaluate 
the feasibility of assigning television channels to stations generally 
using a sequential approach. The sequential approach using a 
feasibility checker in each round can be run very quickly, which is 
important to the success of a descending clock auction format. The 
Procedures PN may incorporate some optimization methods into the 
sequential process after additional public comment, if doing so would 
improve performance of the feasibility checker and not unduly slow the 
reverse auction bidding process. Also, the repacking methodology will 
use an integer programming optimization process at various other points 
in the auction process.
    323. Under the sequential approach, at each point in the bidding 
process at which a station drops out and must be assigned a channel in 
its home band, the repacking methodology will determine whether doing 
so precludes assigning a channel to any of the stations that remain 
active in the bidding. If so, the station for which no channel is 
available will be provisionally selected to receive a payment in 
exchange for relinquishing rights. Only stations that can still 
feasibly be assigned a channel in their home bands will remain active 
in the bidding as prices decline. The bidding rounds will continue 
until every station has dropped out of the bidding and been 
provisionally assigned a channel in its home band or has been selected 
to receive a payment to relinquish its rights because no feasible 
channel could be found for it in the reorganized band. At that point, 
final channel assignments will be established through the use of 
optimization techniques. The statutory mandate to ``make all reasonable 
efforts to preserve . . . the coverage area and population served of 
each broadcast television licensee'' will be incorporated into this 
feasibility analysis. See Spectrum Act Sec.  6403(b)(2).
c. Procedures To Determine Payments
    324. The NPRM addressed ways of determining the payments that 
broadcasters would receive in exchange for relinquishing rights under 
various bid options, including a methodology referred to as 
``threshold'' pricing, which would determine the payment to a winning 
bidder based on the price at the point the repacking methodology 
determined that it could no longer find a feasible channel for the 
bidder's station in its home band because another station had dropped 
out of the bidding and had to be assigned a channel. The Order adopts 
threshold pricing to determine payments in the descending clock 
auction. Under this pricing approach, a bidder's payment for a 
relinquishment option generally will be based on the price for the 
option when another bidder--whose exit from the auction triggers 
acceptance of the winning bidder's bid, as described above--drops out 
of the bidding. This payment will be at least as high as the last price 
the winning bidder agreed to accept for the relinquishment option.
    325. A threshold pricing approach will simplify bidding strategy 
and facilitate broadcaster participation. Under this approach, payments 
are based on the actions of competing bidders, discouraging bidders 
from strategically distorting their own bids in an effort to increase 
their payments. Instead, it encourages a straightforward bidding 
strategy, in which a bidder indicates that it is willing to accept a 
price as long as the price is at least as great as the value the bidder 
ascribes to the bid option. If the bidder drops out before the price 
reaches its value, the bidder may pass up an opportunity to relinquish 
rights at a profitable price. If the bidder continues to bid after the 
price passes its value, it may be selected as a winning bidder, but 
receive a payment below its value. Since a bidder's drop-out price 
determines the point at which it exits the auction, but not its payment 
amount if it wins, the bidder cannot gain by strategically distorting 
its drop-out price in order to affect its winning payment, as it might 
with a pay-as-bid approach. The general principle of basing payments on 
the drop-out behavior of competing bidders is frequently used in 
auctions because of the strong incentives the approach gives bidders to 
bid straightforwardly.
d. Additional Bidding Procedures
    326. In addition to bid collection, bid assignment, and bid payment 
procedures, we adopt rules proposed in the NPRM for additional reverse 
auction bidding procedures. The Procedures PN will announce final 
decisions on the reverse auction bidding procedures, following further 
consideration of the record, including public input received in 
response to an additional opportunity for comment. Among the rules we 
adopt is a rule that provides for opening or reserve prices. Before any 
party applies to participate in the auction, the Comment PN will seek 
comment on the methodology for determining opening prices--the maximum 
amounts that will be offered to each potentially eligible broadcast 
licensee for each bidding option in the reverse auction--and the 
Procedures PN will announce this methodology.
    327. We also could adopt a dynamic version of reserve prices, a 
variation on reserve prices that would set dynamic maximum prices based 
on bidding in the auction. Under this rule, the amounts offered will be 
calculated for each licensee based on specific factors that affect the 
value of its voluntary relinquishment of spectrum usage rights. 
Thereafter, a licensee interested in potentially exercising any of the 
bid options will file a pre-auction application to participate in the 
reverse auction. Qualified applicants for the reverse auction will then 
indicate, in the initialization step, the relinquishment options they 
would be willing to accept at the opening prices. Parties addressing 
opening and reserve prices generally express concern that prices be 
high enough to attract broadcaster participation, and these rules will 
facilitate the Commission's ability to do so. In particular, using 
dynamic reserve prices could address the risk that setting the opening 
prices too high will prevent the auction from repurposing spectrum by 
establishing a mechanism that will allow price offers to be reduced in 
non-competitive areas based on bids in other areas.
    328. We also adopt a rule expressly providing that a bid in the 
reverse auction is an unconditional, irrevocable offer by the bidder to 
fulfill the terms of the bid. That is, a bidder that indicates it is 
willing to accept a price for a bid option is obligated to relinquish 
those rights at that price, if the bid is selected by the auction 
system as a winning bid. Such a provision is fundamental to the 
incentive auction process in order to ensure that broadcasters will bid 
truthfully in the reverse auction and to provide certainty to forward 
auction bidders. We decline to adopt opposing proposals that would 
allow reverse auction bidders to revoke bids after making them. 
Accordingly, a bidder will have a binding obligation to fulfill the 
terms of a winning bid.

C. Forward Auction

1. Pre-Auction Process
a. Competitive Bidding Authority
    329. The Spectrum Act mandates that the Commission shall conduct a 
forward auction to assign licenses to authorize the use of repurposed 
spectrum as part of an incentive auction of broadcast television 
spectrum. See Spectrum Act Sec.  6403(c)(1). The Spectrum Act did not 
revise section 309(j)(1) of the Communications Act, which requires

[[Page 48484]]

the Commission to use competitive bidding to assign licenses when 
``mutually exclusive applications are accepted for any initial 
license,'' subject to the Commission's obligation in the public 
interest to avoid mutual exclusivity in application and licensing 
proceedings and subject to specified exemptions not applicable here. 
See 47 U.S.C. Sec. Sec.  309(j)(1)-(2), (j)(6)(E).
    330. In the NPRM, the Commission sought comment on how to apply the 
section 309(j)(1) requirement of mutual exclusivity in the context of 
the broadcast television spectrum forward auction. Inherent in the 
forward auction are a number of features that distinguish it from past 
spectrum license auctions. First, the Spectrum Act expressly ties the 
success of the reverse auction to generation of specified ``minimum 
proceeds'' from the forward auction. See Spectrum Act Sec.  6403(c)(2). 
As a result, forward auction bids cannot be used to assign flexible-use 
wireless licenses unless the sum of all forward auction bids is 
sufficient to meet the costs and expenses identified by the Spectrum 
Act, as determined in part by the reverse auction. Second, at the 
outset of the reverse and forward auctions, there is a conflict between 
the current use of UHF band spectrum by reverse auction bidders 
(existing broadcast television licensees) and the future use of any 
portion of the spectrum by forward auction bidders (new flexible-use 
licensees), which only the conduct of both the reverse and the forward 
auctions can resolve. These interdependencies make it unclear at the 
outset of the forward auction exactly how many (if any) blocks of 
repurposed spectrum will ultimately be made available in any given 
market.
    331. We interpret our competitive bidding authority under section 
309(j)(1) in light of these features of the broadcast television 
spectrum incentive auction mandated by the Spectrum Act, and in a 
manner that is consistent with, and that will give full effect to, that 
mandate. Accordingly, we conclude that the Commission has authority in 
the section 6403 forward auction to conduct competitive bidding if it 
accepts any application(s) seeking to bid on initial 600 MHz flexible-
use licenses, and any application(s) seeking to bid in the reverse 
auction. Our determination does not preclude finding other bases for 
our competitive bidding authority under section 309(j)(1). The Spectrum 
Act requires that ``at least two competing licensees participate in the 
reverse auction.'' See Spectrum Act Sec.  6402. This additional 
requirement will be satisfied if more than one broadcast television 
licensee's pre-auction application is found to be complete and in 
compliance with the application rules, and if at least two such 
licensees are not commonly controlled. We reject the suggestion that 
more than one forward auction bidder must make a bid on specific 
available reallocated spectrum to satisfy section 309(j)(1) of the 
Communications Act. We conclude that our interpretation best accords 
with canons of statutory construction requiring that statutes be read 
in light of their purpose, and that normally the specific governs the 
general.
    332. In section 6403, Congress directed in plain language that the 
Commission ``shall conduct a forward auction'' for spectrum reallocated 
from broadcast use. See Spectrum Act Sec.  6403(c)(1). With respect to 
other frequency bands specifically subject to auction pursuant to the 
Spectrum Act, Congress referred more generally to the use of ``a system 
of competitive bidding under section 309(j).'' See Spectrum Act Sec.  
6103(a)(2). We need not address here how to apply section 309(j)(1) in 
other contexts, but the intention of Congress in section 6403 is clear. 
We also construe that mandate as reflecting a recognition of the 
special features of the incentive auction. These include the 
interdependence of the reverse and forward auctions and our resulting 
inability to make determinations at the outset about whether and in 
what markets requests for interchangeable channels exceed supply, due 
to the mutually exclusive uses of the spectrum presented by existing 
licensees and any parties licensed based on the forward auction; and 
the contingency of the success of the reverse auction on the proceeds 
to be derived from permitting the forward auction to proceed, making 
our acceptance of forward auction bids dependent on the sum of all 
forward auction bids. We thus also conclude that our interpretation of 
the statutory scheme is ``necessary to effectively implement'' the 
incentive auction mandate established by Congress. See Benkelman Tel. 
Co., 220 F.3d 601, 605-06 (D.C. Cir. 2000).
b. Bidding Credits
    333. The Commission proposed in the NPRM to adopt the same small 
business size standards for the forward auction component of the 
incentive auction as it adopted for the adjacent 700 MHz Band. The 
Commission also proposed to extend any rules and policies adopted in 
the spectrum over Tribal lands proceeding, including those related to 
Tribal land bidding credits, to any licenses that may be issued through 
competitive bidding in the forward auction.
    334. Certain commenters requested that we modify our existing rules 
regarding bidding credits specifically for the incentive auction. As 
our designated entity rules include generally applicable provisions 
regarding size-based eligibility and corresponding bidding preference, 
we decline to adopt modifications specific to the incentive auction. 
Instead, we will initiate a separate proceeding to examine our 
designated entity (``DE'') program generally. Our goal is to resolve 
that DE proceeding early enough to allow all parties to account for any 
changes to the DE rules while planning for the incentive auction.
    335. Pending the outcome of the DE proceeding, which will allow the 
Commission to develop a more complete record, we today adopt the same 
business size standards and associated bidding credits for small 
businesses as the Commission did for the 700 MHz Band. In the DE 
proceeding, we will revisit and consider changing these business size 
standards and bidding credits. Specifically, for the purpose of the 
forward auction, we will define a small business as an entity with 
average annual gross revenues for the preceding three years not 
exceeding $40 million, and a very small business as an entity with 
average annual gross revenues for the preceding three years not 
exceeding $15 million. For the 600 MHz Band, small businesses will be 
provided with a bidding credit of 15 percent and very small businesses 
with a bidding credit of 25 percent, consistent with the standardized 
schedule in Part 1 of our rules. We adopt these size standards and 
associated bidding credits in light of the similarities with wireless 
licenses already assigned in the 700 MHz Band, based on the record 
established to date and our existing designated entity rules. Due to 
their proximity, these bands have similar propagation characteristics. 
In addition, the technical rules we adopt for the 600 MHz Band are 
based on the rules for 700 MHz spectrum, with specific additions or 
modifications designed to protect certain incumbent licensees and 
unlicensed users. In light of these similarities, licensees utilizing 
the 600 MHz Band may face issues and costs similar to licensees 
utilizing the 700 MHz Band, including issues and costs related to 
developing markets, technologies, and services. Accordingly, at this 
time it is appropriate to adopt the same size standards and associated 
bidding credits for the 600 MHz Band as the Commission adopted for the 
700 MHz Band.
    336. We set the revenue threshold (i.e., bidding credit 
eligibility) at $40

[[Page 48485]]

million for small businesses and $15 million for very small businesses, 
and we decline to adopt at this time additional tiers or larger bidding 
credits than those proposed in the NPRM. Commenters in this proceeding 
have not presented specific and data supported grounds to warrant 
adopting for the 600 MHz Band additional tiers or larger bidding 
credits than those adopted for the 700 MHz Band. As with licenses 
offered recently in AWS and the 700 MHz Band, a significant number of 
licenses offered in the forward auction will be for small geographic 
areas and will provide small businesses with ample opportunities to win 
licenses with the two bidding credits (i.e., 15 percent and 25 percent) 
we adopt in the Order. Due to the similar physical characteristics and 
similar regulatory treatment of the 600 MHz and 700 MHz Bands, we 
expect the capital requirements for services in the 600 MHz Band to be 
very similar to those for 700 MHz services.
    337. We also decline to adopt at this time proposals to adopt a 
scale of bidding credits for the 600 MHz Band based on an entity's 
spectrum holdings in a particular geographic area in lieu of credits 
based on small business size. These proposals fundamentally involve 
issues of spectrum aggregation policy because the commenters advocate 
them to achieve the same purposes as the Commission traditionally has 
sought to achieve through spectrum aggregation policies. Spectrum 
aggregation issues are addressed in a separate proceeding.
    338. We also decline to adopt at this time new rural bidding 
credits for the 600 MHz Band in addition to the small bidding credits 
for the 600 MHz Band. The record in this proceeding does not provide a 
sufficient basis to revisit prior determinations on this subject 
matter. Further, the record does not support at this time adopting new 
bidding credits based on past service to rural areas.
    339. Further, we decline to issue a Further NPRM in this proceeding 
regarding an Overcoming Disadvantages Preference, as one commenter 
requests. As part of the DE proceeding, the Commission will likely 
consider whether any revisions made to the designated entity rules, 
including any preference for overcoming disadvantages, should apply to 
auctions, including the broadcast television spectrum incentive 
auction.
    340. We decline proposals by commenters to act in this proceeding 
to modify or eliminate the attributable material relationship (``AMR'') 
rule, in the Order. We expect to generally re-examine the AMR rule, as 
well as other potential changes to the designated entity program, as 
part of the DE proceeding. In light of that proceeding, and limited 
record support applicable solely to the 600 MHz Band, we therefore 
decline to modify the AMR rule at this time. In the DE proceeding we 
will seek comment on how any revisions to the designated entity rules 
should apply to the incentive auction.
    341. Finally, we adopt the NPRM proposal to extend any rules and 
policies adopted in the spectrum over Tribal lands proceeding, 
including those related to Tribal land bidding credits, to any licenses 
that may be issued through competitive bidding in the forward auction. 
Thus, we defer the application of any rules and policies for 
facilitating access to spectrum and the provision of service to Tribal 
lands to the Tribal lands proceeding. Because that proceeding is 
specifically focused on promoting greater use of spectrum over Tribal 
lands, it is better suited than the instant proceeding to reach 
conclusions on that issue.
c. Prohibition of Certain Communications
    342. In the NPRM, the Commission sought comment on how to determine 
which parties are ``competing'' in the forward auction for the purposes 
of enforcing the existing communications prohibition, whether to 
prohibit reverse auction applicants from communicating with forward 
auction applicants regarding the substance of their bids or bidding 
strategies, and whether the prohibition should apply to communications 
with all broadcast television licensees as opposed to only those 
licensees that submit applications to participate in the reverse 
auction.
    343. The Order applies to forward auction applicants the 
Commission's existing Part 1 rule prohibiting certain communications. 
Under this rule, after the short-form application filing deadline, all 
applicants for licenses in any of the same geographic license areas are 
prohibited from cooperating or collaborating with respect to, 
discussing with each other, or disclosing to each other in any manner 
the substance of their own, or each other's, or any other competing 
applicants' bids or bidding strategies until after the down payment 
deadline, unless such applicants are members of a bidding consortium or 
other joint bidding arrangement identified on the bidder's short-form 
application, subject to certain specified exceptions. Two forward 
auction applicants are ``competing'' for the purposes of this 
prohibition if they apply for licenses in any of the same geographic 
license areas, regardless of whether the licenses are for specific 
frequencies or generic blocks. Thus, this prohibition applies only to 
forward auction applicants that apply for licenses in the same 
geographic license area, and not to those that apply only in different 
geographic license areas.
    344. In addition, beginning on the short-form application filing 
deadline for the forward auction and until the results of the incentive 
auction have been announced by public notice, all forward auction 
applicants are prohibited from communicating directly or indirectly any 
incentive auction applicant's bids or bidding strategies to any covered 
television licensee, comprising generally all broadcast television 
licensees that are or could become eligible to participate in the 
reverse auction and all channel sharers. Applying the prohibition 
across the reverse and forward auctions will promote a fair and 
competitive auction. This restriction will inhibit the ability of 
forward auction applicants and covered television licensees to form 
side agreements, which could have anticompetitive effects and could 
alter the outcome of the incentive auction.
    345. Under this restriction, forward auction applicants are 
prohibited from communicating with all covered television licensees 
regarding incentive auction applicants' bids and bidding strategies, 
not just those broadcast television licensees that actually apply to 
participate in the reverse auction. Given the Commission's statutory 
obligation to protect the identities of reverse auction participants, 
it is not practicable to limit the prohibition to communications with 
reverse auction applicants because doing so would require disclosing 
the identities of those reverse auction applicants to the forward 
auction applicants. This prohibition restricting communications across 
the reverse and forward auctions is not limited by geographic area. 
Given that the results of the reverse auction for one participant may 
have effects across multiple geographic areas, it is appropriate to 
prohibit forward auction applicants from communicating prohibited 
information to any covered television licensee, regardless of the 
broadcast television licensee's geographic location.
    346. We adopt one exception to the rule prohibiting forward auction 
applicants from communicating with any covered television licensee 
regarding incentive auction applicants' bids or bidding strategies. In 
recognition of the practical realities of business ownership and 
management and to allow strategic coordination within a single 
enterprise during the incentive auction, if a controlling interest,

[[Page 48486]]

director, officer, or holder of any 10 percent or greater ownership 
interest in a forward auction applicant is also a controlling interest, 
director, officer, or governing board member of a covered television 
licensee, the forward auction applicant and the covered television 
licensee may communicate with each other regarding incentive auction 
applicants' bids and bidding strategies without violating the 
prohibition. Controlling interests include individuals or entities with 
positive or negative de jure or de facto control of the licensee. As 
with respect to the reverse auction, this exception for overlapping 
interests only applies to controlling interests, directors, officers, 
and governing board members of a covered television licensee as of the 
deadline for submitting applications to participate in the reverse 
auction, and it only applies to controlling interests, directors, 
officers, and holders of any 10 percent or greater ownership interest 
in a forward auction applicant as of the deadline for submitting short-
form applications to participate in the forward auction. We emphasize 
that this exception applies only to a forward auction applicant's 
discussions with a covered television licensee, and does not apply to a 
forward auction applicant's discussions with a competing forward 
auction applicant. Additionally, the prohibition across the reverse and 
forward auctions applies as of the deadline for submitting short-form 
applications to participate in the forward auction, and applies to any 
additional included parties at any subsequent point prior to when the 
prohibition ends. Thus, if, for example, a forward auction applicant 
appoints a new officer after the short-form application deadline, that 
new officer would be subject to the prohibition, but would not be 
included within this exception.
    347. We decline to adopt a general exception allowing forward 
auction applicants to communicate with covered television licensees 
regarding incentive auction applicants' bids and bidding strategies so 
long as agreements between the relevant parties are disclosed to the 
Commission.
    348. For the purposes of the new rule that we adopt here, we will 
apply the same definition of forward auction ``applicant'' that applies 
to the rule for spectrum license auctions generally, and that will 
apply to communications between forward auction applicants. See 47 CFR 
1.2105(c)(7)(i). That definition provides that the term ``applicant'' 
includes all controlling interests in the entity submitting the short-
form application, as well as all holders of partnership and other 
ownership interests and any stock interest amounting to 10 percent or 
more of the entity, or outstanding stock, or outstanding voting stock 
of the entity, and all officers and directors of the entity. We decline 
to amend the definition of ``applicant'' so that the prohibition would 
apply only to controlling equity interest holders, as opposed to 10 
percent interest holders. Ten percent interest holders may easily 
become conduits of information, and as a result, we will continue to 
apply the prophylactic prohibition of certain communications to such 
interest holders in order to prevent anticompetitive communications.
    349. Consistent with the approach we have taken in spectrum license 
auctions generally, forward auction applicants may continue to 
communicate with covered television licensees and competing forward 
auction applicants regarding matters wholly unrelated to the incentive 
auction. We rely on existing precedent regarding the types of 
communications that rise to the level of prohibited communications 
under the rules. We emphasize that the rules prohibiting certain 
communications are limited in scope and only prohibit disclosure of 
information that affects, or has the potential to affect, bids and 
bidding strategies. Forward auction applicants may structure their 
auction participation as needed to avoid violating the rules, such as 
by instituting internal controls with respect to information about bids 
and bidding strategies. For instance, although it would not outweigh 
specific evidence of prohibited communications, a forward auction 
applicant could reduce the possibility of a violation by preventing 
employees with information about bids and bidding strategies from 
communicating such information to other employees who are engaging in 
unrelated negotiations with competing forward auction applicants or 
with covered television licensees.
    350. The new rules prohibiting certain communications across the 
reverse and forward auctions apply until the results of the incentive 
auction have been announced by public notice. Allowing communications 
between forward auction applicants and covered television licensees 
after the announcement of auction results will facilitate the UHF band 
transition. The existing Part 1 rule prohibiting certain communications 
between competing forward auction applicants applies until after the 
down payment deadline. Applying the prohibition to communications 
between forward auction applicants for the limited additional time 
period from the effective date until after the down payment deadline 
will protect the outcome of the auction and will impose only a minimum 
additional burden on forward auction applicants.
    351. Any party that makes or receives a prohibited communication 
regarding bids or bidding strategies shall report such communication in 
writing to the Commission immediately, and in no case later than five 
business days after the communication occurs. See 47 CFR 1.2105(c)(6). 
A failure to make a timely report constitutes a continuing violation. 
Parties must adhere to any applicable antitrust laws, including any 
additional communications restrictions. Where specific instances of 
collusion in the competitive bidding process are alleged, the 
Commission may conduct an investigation or refer such complaints to DOJ 
for investigation. Parties who are found to have violated the antitrust 
laws or the Commission's rules in connection with participation in the 
auction process may be subject to forfeiture of their upfront payment, 
down payment, or full bid amount and revocation of their license(s), 
and may be prohibited from participating in future auctions.
d. National Security Certification
    352. In accordance with the NPRM, we revise the recently adopted 
national security certification to extend its applicability to auctions 
``in which any spectrum usage rights for which licenses are being 
assigned were made available under [47 U.S.C. Sec.  309(j)(8)(G)(i)].'' 
See Spectrum Act Sec.  6004(b)(2). As the Commission will conduct the 
forward auction under its general competitive bidding rules and the 
forward auction is subject to the national security restriction in 
section 6004 of the Spectrum Act, forward auction applicants must 
certify as to their compliance with the national security restriction 
in 47 CFR 1.2105(a), as amended. As with other required certifications, 
a forward auction applicant that fails to certify, under penalty of 
perjury, that it and all of the related individuals and entities 
required to be disclosed on the short-form application are not 
``person[s] who [have] been, for reasons of national security, barred 
by any agency of the Federal Government from bidding on a contract, 
participating in an auction, or receiving a grant'' by the applicable 
filing deadline would render its short-form application unacceptable 
for filing, and its application would be dismissed with prejudice. See 
Spectrum Act Sec.  6004.

[[Page 48487]]

2. Bidding Process
a. Bid Collection Procedures: Auction Format, Generic License 
Categories, Etc.
    353. The NPRM proposed to collect bids using one of two multiple 
round auction format options: A simultaneous multiple round (``SMR'') 
ascending auction, which typically has been used for spectrum license 
auctions, or an ascending clock auction. Under the clock auction 
format, the auction system would announce a price for the licenses in 
each category within a geographic area and a bidder would indicate the 
number of licenses it was interested in at that price in that category. 
In a clock auction, the Commission proposed to permit intra-round 
bidding, in which a bidder could indicate a specific price at which its 
demand for licenses in a category would change, instead of simply 
accepting or rejecting the clock price. The Commission also asked about 
providing for package bidding, which would allow bidders to bid on all-
or-nothing packages of licenses. The Commission noted that extended 
bidding could be implemented if proceeds were insufficient to meet the 
requirements to close the auction.
    354. Noting that auction design has evolved since the existing Part 
1 rules for competitive bidding with respect to spectrum licenses were 
adopted, the Commission also proposed to revise the rules, in part to 
provide explicitly for auction procedures directly addressing bid 
collection.
    355. For the forward auction, in the Order we adopt an ascending 
clock auction to collect bids for categories of generic licenses, to be 
followed by a separate assignment mechanism to assign frequency-
specific licenses. In referring to ``generic licenses'' we are not 
referring to the actual licenses that will be assigned to winning 
bidders, but to standardized blocks of spectrum that will be sued to 
represent quantities of licenses for a time during the bidding process. 
We also adopt the proposal for extended round bidding under certain 
circumstances. In addition, we adopt the proposed Part 1 rule revision 
with respect to bid collection procedures to update our rules and 
create a consistent framework for addressing these procedures in 
reverse and forward auctions. The bid collection procedures we adopt 
for the forward auction are not inconsistent with the Commission's 
existing competitive bidding rules. We find, however, that the revised 
rules provide greater clarity with respect to the options likely to be 
used. For example, as revised in this proceeding, 47 CFR 
1.2103(b)(1)(ii) expressly provides for procedures allowing for, among 
other things, bids for a number of generic items in one or more 
categories of items. We make a corresponding revision expressly 
providing that an application may identify categories of licenses on 
which the applicant wishes to bid.
    356. Because the components of the auction are interrelated, a more 
expeditious forward auction benefits reverse auction bidders as well as 
forward auction bidders, and lowers participation costs for all. 
Conducting bidding for generic licenses has the potential to 
significantly speed up the clock rounds of the forward auction bidding 
process, since bidders will not need to bid iteratively across rounds 
on several substitutable license blocks, as they would if they were 
bidding for frequency-specific licenses. The clock auction format we 
adopt easily incorporates bidding for categories of generic licenses, 
and because it has multiple rounds, will allow bidders to observe 
changes in relative prices for different types of licenses and across 
different geographic areas, and to adjust their bidding strategies 
accordingly.
    357. Although commenters generally support bidding for generic 
licenses, some caution that the blocks of spectrum within a license 
category must be truly fungible, or at least sufficiently similar. 
While we agree that it is important for licenses in a category to be 
similar, they need not be entirely interchangeable, as the assignment 
round will take into account specific bidder preferences for licenses 
within a category. We recognize that we may need to consider a number 
of factors, such as proximity to television stations or guard bands, in 
order to define whether particular licenses are ``similar enough'' to 
be included in a single bidding category. During the pre-auction 
process, in response to the Comment PN, potential bidders will be able 
to provide input on specific standards for categories of generic 
licenses.
    358. The ascending clock auction format will proceed in a series of 
rounds, with bidding being conducted simultaneously for all licenses 
available in the auction. Section 1.2103(b)(1)(i), as revised in this 
proceeding, provides for collecting bids in a single round or in 
multiple rounds. The initial price for generic licenses in a category 
and geographic area will be the minimum opening bid. Hence, in the 
initial round, a bidder will indicate how many generic licenses in a 
category in an area it demands at the minimum opening bid price. 
Bidding rounds will be open for predetermined periods of time, during 
which bidders will indicate their demands for licenses at the clock 
prices associated with the current round. Bidders will be subject to 
activity and eligibility rules that govern the pace at which they 
participate in the auction. Activity and eligibility rules, as with 
other detailed procedures and mechanisms, will be established in the 
Procedures PN.
    359. In each geographic area, the clock price for a license 
category will increase from round to round if bidders indicate total 
demand that exceeds the number of licenses available in the category. 
The clock rounds will continue until, for all categories of licenses in 
all geographic areas, the number of licenses demanded does not exceed 
the supply of available licenses. At that point, those bidders 
indicating demand for a license in a category at the final clock price 
will be deemed winning bidders, contingent upon the incentive auction 
process closing after the current stage of the forward auction. In the 
context of the forward auction, we use the term ``provisional winner'' 
to indicate that winning bid status depends upon the final stage rule 
of the incentive auction being satisfied. The clock auction will not 
assign explicit provisionally winning bid status, as in an SMR auction, 
to indicate a standing high bid.
    360. We will incorporate intra-round bidding into the ascending 
clock auction. Intra-round bidding will allow a bidder not willing to 
accept the next round's clock price to indicate a point between the 
previous round's price and the next clock price at which its demand for 
licenses in the category changes. Intra-round bidding will allow the 
auction to proceed more quickly, by making it possible to use 
relatively large clock price increments without running the risk that a 
large jump in price will overshoot bidders' demands for licenses in a 
category.
    361. We do not intend to incorporate package bidding procedures 
into the forward auction because of the additional complexity that 
package bidding would introduce into the auction. Package bidding 
procedures would permit bidding on all-or-nothing groups of licenses as 
well as on individual items within those groups. The forward auction 
will offer multiple blocks of licenses in multiple categories in many 
hundreds of geographic areas. To permit bidders to bid on combinations 
of those licenses would considerably complicate the bidding process and 
the procedures to determine clock prices and winning bids and it could 
bring unnecessary complexity into an already complex auction.
    362. An alternative to package bidding on which the Comment PN will

[[Page 48488]]

seek input may strike a compromise between the larger carriers' 
interests in ensuring a minimum scale of operations in urban areas and 
smaller bidders' interests in smaller markets. Under this alternative, 
the Commission would create an aggregation of the largest PEA licenses. 
A bidder could indicate interest in the aggregated PEAs or in 
individual PEAs not included in the aggregation. Unlike package bidding 
formats that would give a bidder the option of placing an all-or-
nothing package bid on a group of licenses or bidding separately on the 
licenses comprising the package, bids would not be accepted for the 
individual PEAs included in the aggregation of PEAs.
    363. Section 1.2103(b)(1)(v), as revised in this proceeding, 
provides for collecting bids in any needed additional stage or stages 
following an initial single or multiple round auction, such as an 
extended bidding round or an assignment stage for generic items. We may 
conduct an extended round of bidding after the clock bidding rounds to 
increase the likelihood that the auction will conclude at the end of 
the current stage, thereby avoiding the need to move to another stage 
in which less spectrum would be available for licensing in the forward 
auction. If, at the end of the clock bidding rounds, the proceeds 
raised are insufficient to satisfy the final stage rule, but are within 
some range of the required amount, an extended bidding round would 
allow the provisionally winning bidders to indicate willingness to 
accept higher prices to close the gap. The specific circumstances, 
including the range of proceeds, that will trigger an extended bidding 
round will be discussed in more detail and established in the pre-
auction process. Any such subsequent bidding will not by itself change 
the set of provisional license winners.
b. Bid Assignment Procedures: Determining Winning Bidders and Assigning 
Frequency-Specific Licenses
    364. The Commission proposed in the NPRM to revise its existing 
rules, in part, to provide explicitly for auction procedures directly 
addressing bid assignment procedures. In the Order we adopt a two-step 
assignment procedure for the forward auction: The clock rounds will 
first determine that a bidder will win one or more generic licenses in 
a category, and an assignment mechanism subsequently will determine 
specific frequency assignments. This two-step process will give bidders 
the benefits of price discovery in the clock rounds, permitting them to 
shift bidding strategies as the relative prices of different categories 
of licenses change, while still realizing the speed advantages of 
bidding for generic licenses. Knowing that the assignment mechanism 
will enable them to express preferences for frequency-specific 
licenses, bidders will be able to bid more confidently for generic 
licenses in the clock rounds. We also revise the Part 1 rule concerning 
bid assignment procedures to create a consistent framework for 
addressing these procedures in the reverse and forward auctions. The 
assignment procedures likely to be used in the forward auction are 
consistent with the Commission's existing competitive bidding rule. We 
find, however, that the revised rule provides greater clarity with 
respect to the options likely to be used. For example, as revised in 
this proceeding, 47 CFR 1.2103(b)(2) expressly authorizes an auction in 
which the assignment of winning bids is based on a variety of factors 
in addition to the submitted bid amount, including but not limited to 
bids submitted in a separate competitive bidding process, such as an 
auction to establish incentive payments for the relinquishment of 
spectrum usage rights--i.e., the reverse auction.
    365. During the first step of the assignment procedure, the clock 
rounds will end in a stage with bidders winning generic licenses in 
each category of licenses in each geographic area, contingent on the 
final stage rule being satisfied. If the final stage rule is satisfied, 
the second step of the assignment procedure will assign specific 
frequencies to the winning bidders through the special assignment 
mechanism. If the rule is not satisfied in a stage of the forward 
auction, then the special assignment mechanism will not be run in that 
stage.
    366. The assignment mechanism will consist of a single bidding 
round, or a series of separate bidding rounds, in which bidders will 
bid for priority in selecting bands or for a preferred frequency within 
a geographic area. The winning clock price could include a payment 
determined in an extended round of bidding. The frequency preferences 
of the bidders willing to pay the highest premiums will be honored, to 
the extent technically possible. The payment rule for the assignment 
round will be determined in the Procedures PN.
    367. The use of a competitive bidding round will give bidders an 
opportunity to indicate their preferences for specific frequencies, 
facilitating the assignment of specific frequencies to the highest-
valuing users. Although suggested by several commenters, an 
administrative, random, or quasi-random assignment process would not 
have this advantage of taking users' particular preferences into 
account and thus may undermine the efficiency of the ultimate license 
assignments. We therefore decline to adopt those proposals.
c. Procedures To Determine Payments
    368. In the NPRM, the Commission proposed to revise the existing 
Part 1 competitive bidding rules to provide explicitly for procedures 
to determine payments through the extended and assignment rounds.
    369. In the Order we determine that the final prices winning 
bidders in the forward auction will pay for spectrum licenses will be 
based on the final clock prices for generic licenses, modified by any 
additional payments determined in an extended round aimed at satisfying 
the final stage rule and in the assignment round to assign frequency-
specific licenses. The assignment round will serve important auction 
goals by allowing bidding on generic licenses during the clock rounds, 
thereby expediting the forward auction bidding process. Likewise, the 
extended bidding round may help to expedite the incentive auction by 
giving forward auction bidders the opportunity to satisfy the final 
stage rule and thereby avoid the need to run another stage of the 
auction.
    370. We also revise the Commission's Part 1 rules governing payment 
determination procedures. Although the procedures in the forward 
auction will be consistent with the existing competitive bidding rule, 
47 CFR 1.2103(b)(3), as revised in this proceeding, highlights the need 
for auction design to address payment rules and does so in terms that 
can be used consistently across Commission competitive bidding, 
including the forward auction component of incentive auctions and 
standard spectrum license auctions.
d. Additional Bidding Procedures
    371. As noted in the NPRM, the Commission's existing Part 1 
competitive bidding rules include, in addition to provisions regarding 
bid collection, bid assignment, and bid payment procedures, additional 
competitive bidding mechanisms for sequencing or grouping licenses 
offered; reserve prices, minimum opening bids and minimum or maximum 
bid increments; stopping or activity rules; and payments in the event 
of bid withdrawal, default, or disqualification. Noting that the rules 
did not exhaustively list all potential bidding mechanisms, the 
Commission proposed

[[Page 48489]]

to revise the list of options set forth in section 1.2103. It further 
proposed to revise its rules for stopping an auction to permit it to 
terminate multiple round auctions within a reasonable time and in 
accordance with the goals, statutory requirements, and rules for the 
incentive auction, including the reserve price or prices.
    372. In the Order we adopt the proposal to revise the Commission's 
competitive bidding rules with respect to auction design options and 
competitive bidding mechanisms. The Order makes clarifying edits to the 
text of the proposed rules set forth in the NPRM without changing their 
substance. We also change the rule regarding the contents of 
applications to participate in the forward auction regarding the 
identification of categories of licenses on which the applicant wishes 
to bid and with respect to certifications the application must include. 
Likewise, we modify the language of the rule regarding upfront payments 
so that it can be applied to circumstances in which an applicant 
identifies categories of licenses on which it wishes to bid rather than 
particular licenses, we move language regarding bid apportionment 
previously contained in 47 CFR 1.2103 to 1.2104, and we update cross-
references contained in other sections as needed. These revisions are 
essential to assuring consistency in the framework for the reverse and 
forward auctions.
    373. Many of the auction procedures and mechanisms addressed in the 
revised rules will be the subject of more fully informed discussion 
during the upcoming pre-auction process. The Commission's rules provide 
for the applicable procedures to be finalized in the pre-auction 
process, including procedures for bid withdrawal, procedures for 
modifying bids during the auction, and potential liabilities for bid 
withdrawal.
3. Deletion of Outdated 1.2102(c)
    374. In the NPRM, the Commission proposed deleting 47 CFR 
1.2102(c), a list specifically exempting from competitive bidding 
identified services, such as UHF Television. Footnote 423 of the NPRM 
should have read ``propose to delete,'' rather than ``delete'' given 
the procedural context. Further, given the statutory limitations on 
competitive bidding, the footnote should have noted that ``the 
services'' listed in 47 CFR 1.2102(c) ``are subject to competitive 
bidding'' and exceptions therefrom ``under current law.''
    375. In the Order, we delete 47 CFR 1.2102(c), which was adopted 
prior to the Balanced Budget Act of 1997, mandating the use of 
competitive bidding in circumstances where it was previously 
discretionary, while also adopting specified exemptions from that 
mandate. The Commission codified the statute's current categorical 
exemption in 47 CFR 1.2102(b). One commenter contends that the proposed 
deletion would subject Part 90 Private Land Mobile services to 
competitive bidding notwithstanding the exemption from competitive 
bidding provided by the Communications Act, specifically section 
309(j)(2). See 47 U.S.C. Sec.  309(j)(2). However, that argument 
overlooks the fact that 47 CFR 1.2102(b) separately codifies the 
protections afforded under section 309(j)(2) of the Communications Act. 
Thus, the proposed deletion would not change the extent to which the 
Part 90 licensees are subject to competitive bidding. Instead, it 
simply brings the Commission's rules into accord with the statute. 
Another commenter expresses concern about the effect on the exemption 
from competitive bidding of Personal Radio Services under Part 95 if 47 
CFR 1.2102(c)(8) is deleted. However, since 47 CFR 1.2102(c) has been 
superseded by revisions to sections 309(j)(1) and (2) of the 
Communications Act, the deletion of 47 CFR 1.2102(c) will not change 
the extent to which services, including Part 95 Personal Radio 
Services, are subject to competitive bidding under the current statute.

IV. The Post-Incentive Auction Transition

A. Auction Completion and Effective Date of the Repacking Process

    376. The Spectrum Act directs that no reassignments or 
reallocations may become effective until the completion of the reverse 
auction and the forward auction. See Spectrum Act Sec.  6403(f)(2). In 
addition, no reassignments or reallocations of broadcast television 
spectrum may become effective unless the proceeds of the forward 
auction exceed the sum specified in Spectrum Act Sec.  6403(c)(2). 
After the reverse and forward auctions are ``complet[e],'' the 
``effective'' date of any spectrum reassignments and reallocations 
signals the end of the statutory confidentiality requirement for 
reverse auction participants, as well as the beginning of the 
Commission's authority to borrow up to $1 billion from the U.S. 
Treasury to accelerate relocation payments to broadcasters and MVPDs 
for repacking expenses. See Spectrum Act Sec. Sec.  6403(f)(2), (a)(3), 
(d)(3). In addition, the FCC must make any relocation reimbursements 
from the TV Broadcaster Relocation Fund (``Reimbursement Fund'') within 
three years of the completion of the forward auction. See Spectrum Act 
Sec. Sec.  6403(b)(4)(D), (d)(4).
    377. In the Order we adopt the proposal from the NPRM that the 
reverse and forward auctions will each be ``complete'' within the 
meaning of the Spectrum Act when a public notice announces that each 
auction, respectively, has ended. In addition, the reassignments and 
reallocations will be ``effective'' for purposes of the statute when 
the Media and Wireless Bureaus release the Channel Reassignment PN 
specifying the new channel assignments and technical parameters of any 
stations that are assigned new channels in the repacking process or 
that become winning bidders in the reverse auction to change channels. 
This approach is consistent with the common meaning of the terms 
complete and effective, with the typical practice of issuing a public 
notice announcing the results of each auction as soon as the results 
have been finalized, and with the practical requirements of the UHF 
band transition. We anticipate that the public announcements regarding 
completion of the reverse auction, completion of the forward auction, 
and the effective date of the reassignments and reallocations will 
occur simultaneously and may be combined in one public notice, if 
practicable.
    378. We decline to adopt broadcasters' suggestion to delay the 
completion of the forward auction until after broadcast stations 
reassigned to new channels in the repacking process file applications 
for construction permits to change channels and forward auction 
licenses have been issued. Broadcasters assert that this approach would 
allow them more time to finish relocating before the end of the three-
year deadline for collecting relocation reimbursements from the 
Reimbursement Fund. Although we recognize that the three-year deadline 
for reimbursements will be challenging, the rules that we adopt today 
for administration of the Reimbursement Fund, which provide for 
payments to broadcasters and MVPDs based on their estimated costs, will 
help to ameliorate concerns about that deadline. Moreover, we conclude 
that the term ``completion,'' used in section 6403(b)(4)(D) in the 
context of conducting the forward auction, cannot reasonably be 
interpreted to refer to when repacked broadcasters file construction 
permit applications.
    379. The approach suggested by broadcasters also would have a 
number of negative consequences for the UHF band transition. The 
Spectrum Act

[[Page 48490]]

directs that no reassignments or reallocations may become effective 
until the completion of the reverse auction and the forward auction, so 
we would have to require broadcasters to file applications for 
construction permits to change channels before the reassignments and 
reallocations become effective, injecting uncertainty into the UHF band 
transition. In addition, delaying the effective date would delay the 
Commission's ability to borrow $1 billion from the U.S. Treasury to 
expedite the reimbursement process. We do not believe that Congress 
intended to delay the Commission's access to the $1 billion loan 
because the very purpose of the loan is to expedite the availability of 
relocation funds. Further, delaying the effective date would prolong 
the statutory requirement that the Commission protect the 
confidentiality of the identities of reverse auction participants, 
thereby delaying the Commission's ability to release publicly the 
identities of the winning reverse auction bidders--a necessary 
prerequisite to the release of the channel reassignment information 
that broadcasters will need in order to file their applications for 
construction permits.

B. Processing of Bid Payments

    380. In accordance with section 309(j)(8)(G)(i) of the 
Communications Act, the Commission will share with successful bidders 
that voluntarily relinquish licensed spectrum usage rights a portion of 
the forward auction proceeds ``based on the value of [their] 
relinquished rights as determined in [a] reverse auction.'' Section 
6403(c) of the Spectrum Act provides that the amount of the proceeds 
that the Commission will share with a broadcast television licensee 
will not be less than the amount of the licensee's winning bid in the 
reverse auction. The Commission proposed in the NPRM to incorporate 
these statutory requirements into the competitive bidding rules for the 
reverse auction and sought comment on timing and procedures for auction 
proceeds disbursements.
    381. The Commission must disburse winning bid payments by forward 
auction participants in compliance with statutory requirements. We will 
determine whether the final stage rule for the incentive auction is 
satisfied and reallocations and reassignments may proceed based on the 
winning bids in the forward auction. Payments that bidders then make to 
honor those bids must be distributed, specifically to fund: (1) 
Payments to broadcasters relinquishing spectrum usage rights; (2) 
specified FCC administrative costs; (3) relocation costs to be funded 
through the Reimbursement Fund; and (4) the Public Safety Trust Fund 
(``PSTF''). See Spectrum Act Sec. Sec.  6402, 6403(c)(2). The Spectrum 
Act does not specify a timetable for the distribution of auction 
proceeds, though it specifies some deadlines before which particular 
distributions must occur. See generally Spectrum Act Sec.  6402; see 
also id. Sec.  6403(d)(4).
    382. One of the conditions of the final stage rule is that 
sufficient proceeds are recovered to meet statutory minimum 
requirements plus any amount necessary to fund the PSTF for FirstNet. 
We note that auction proceeds are comprised only of the payments of 
winning bids for spectrum licenses by participants in the forward 
auction. Upfront or pre-auction deposits or payments are applied toward 
liabilities incurred in the auction, returned to unsuccessful bidders, 
or applied toward the amount of winning bids and, therefore, do not 
provide a separate component of auction proceeds. See 47 U.S.C. Sec.  
309(j)(8)(C); 47 CFR 1.2106(d), (e).
    383. We will share auction proceeds with broadcasters relinquishing 
spectrum usage rights as soon as practicable following the successful 
conclusion of the incentive auction, as suggested by several wireless 
carriers and trade groups. However, we will not adopt a rigid deadline 
for disbursing those proceeds. In all spectrum license auctions, the 
Commission disburses auction proceeds only after spectrum licenses 
associated with winning bids have been granted, absent express 
statutory direction to do otherwise. That is, only after the Commission 
grants a spectrum license to a winning bidder does the Commission 
disburse any payments made in connection with the license to the FCC's 
administrative account or to the Treasury. The Commission does not 
disburse the upfront or down payments from winning bidders who default 
on their post-auction obligations prior to the issuance of their 
licenses. Furthermore, the Commission has granted spectrum licenses 
post-auction on a rolling basis, as license applications filed by 
winning bidders are ready to be granted. Any single application may 
cover up to all of the licenses won by the applicant and the associated 
winning bids may be in any amount, i.e., there is no fixed correlation 
between the number of applications and the number of licenses granted 
or the amount of related payments. Thus, amounts become available for 
distribution on a rolling basis over time and at intervals tied to the 
licensing process. Given these facts, a specific deadline for sharing 
proceeds is not feasible.
    384. The Spectrum Act does not permit us to make reimbursement 
payments to relocated broadcasters before completion of the forward 
auction using funds collected as down payments from bidders in the 
forward auction, as suggested by one commenter. Section 6403(b)(4)(A) 
of the Spectrum Act directs the Commission to reimburse broadcasters 
``from amounts made available under [section 6403(d)(2)],'' which 
includes two categories of ``amounts'': (1) ``[a]ny amounts borrowed 
under [section 6403(d)(3)(A)],'' and (2) ``any amounts in the 
[Reimbursement Fund] that are not necessary for reimbursement of the 
general fund of the Treasury for such borrowed amounts.'' Neither 
source of funding will be available to the Commission until the forward 
auction is complete. With regard to the first category, under section 
6403(d)(3)(A), the Commission has no borrowing authority until ``the 
date when any reassignments or reallocations under [section 
6403(b)(1)(B)] become effective, as provided in [section 6403(f)(2)].'' 
Section 6403(f)(2) in turn provides that ``no reassignments or 
reallocations under [section 6403(b)(1)(B)] shall become effective 
until the completion of the reverse auction . . . and the forward 
auction.'' Thus, the statute prohibits reimbursements from the first 
category prior to the completion of the forward auction. With regard to 
the second category, there will be no auction proceeds to be deposited 
in the Reimbursement Fund prior to completion of the forward auction. 
The Spectrum Act provides that deposits and upfront payments from 
``successful bidders'' constitute auction proceeds, but such 
``successful bidders'' will not exist prior to the completion of the 
forward auction. See Spectrum Act Sec.  6402. Cf. 47 U.S.C. Sec.  
309(j)(8)(C)(ii). Therefore, we do not have authority under the 
Spectrum Act to issue reimbursement payments to relocated broadcasters 
prior to the completion of the forward auction.
    385. We are committed to disbursing auction proceeds as promptly as 
possible while meeting all of our statutory responsibilities. We do not 
interpret the Spectrum Act to require or prohibit prioritizing any 
particular initial distributions of auction proceeds over others. We 
note, however, that payments deposited in the Reimbursement Fund must 
repay any Treasury loan before funding additional relocation 
reimbursements. See Spectrum Act Sec.  6403(d)(2). We expect that 
payments to broadcasters

[[Page 48491]]

relinquishing spectrum usage rights will be among the first 
disbursements once amounts become available for distribution. This 
approach addresses one commenter's contention that broadcasters should 
not bear financial risks stemming from any forward auction licensing 
delays or forward auction bidder defaults.
    386. With respect to relevant procedural matters, we also adopt the 
Commission's proposed rule incorporating the statutory requirements in 
section 309(j)(8)(G)(i) of the Communications Act and section 6403(c) 
of the Spectrum Act concerning incentive payments into our competitive 
bidding rules. In addition, we adopt the Commission's proposal to 
require successful bidders in the reverse auction to submit additional 
information to facilitate incentive payments. We note that the 
Commission's existing Part 1 competitive bidding rules will govern the 
post-forward auction process, including the submission of bid payments 
and long-form applications. See 47 CFR 1.2107. Specific details 
concerning forward auction bid payments and long-form filing 
requirements, including related deadlines, will be set forth in a 
public notice.
    387. As mentioned in the NPRM, we envision that the information 
would be submitted on standardized incentive payment forms similar to 
the Automated Clearing House (``ACH'') forms unsuccessful bidders in 
typical spectrum license auctions use to request refunds of their 
deposits and upfront payments. This information collection is necessary 
to facilitate incentive payments and should not be burdensome to 
successful bidders. Specifically, without further instruction and bank 
account information from successful bidders, the Commission would not 
know where to send the incentive payments. The Commission intends to 
follow winning reverse auction bidders' payment instructions as set 
forth on their respective standardized incentive payment forms to the 
extent permitted by applicable law.
    388. We will disburse payments to the licensee that is the reverse 
auction applicant when sharing proceeds from the auction. This approach 
will ensure that the person who legally holds the license receives 
forward auction proceeds in return for relinquishing spectrum usage 
rights. This decision is consistent with the Spectrum Act, which 
repeatedly refers to sharing forward auction proceeds with licensees.
    389. The Commission did not receive comments directly addressing 
whether to modify its red light procedures in connection with the 
incentive auction. As a result, we are not modifying those procedures 
at this time.

C. Transition Procedures for Television Stations and Reimbursement 
Procedures for Television Stations and MVPDs

    390. Implementing the results of the incentive auction will be a 
complex and challenging undertaking for broadcasters. No broadcaster 
will be required to change the location of its transmission facility, 
but operation on a new channel will require modifications to existing 
facilities, ranging from relatively minor adjustments to more 
substantial changes depending on various factors. After the auction 
concludes and the results of the repacking process are announced, 
stations changing channels must be able to transition to their new 
channels in a manner that will minimize disruption to their viewers as 
well as other stations, wireless operators, and multichannel video 
programming distributors (MVPDs). In addition, the Spectrum Act 
specifies that reimbursements from the Fund must occur within three 
years of the completion of the forward auction, and this finite period 
necessitates a prompt and efficient reimbursement process.
1. License Modification Procedures
a. Construction Permit Application Filing Requirements
    391. The Commission will modify the licenses of stations assigned 
new channels in the reverse auction or repacking process pursuant to 
Section 316 of the Communications Act and Section 6403(h) of the 
Spectrum Act. It will not use a codified Table of Allotments or 
rulemaking procedures to implement post-auction channel changes, and 
will classify construction permit applications for post-auction 
channels as minor changes. Unlike major change applications, minor 
change applications are not subject to local public notice requirements 
or a 30-day petition to deny filing window. The Commission delegates 
authority to the Media and Wireless Telecommunications Bureaus to 
release the Channel Reassignment PN upon the conclusion of the auction 
specifying the new channel assignments and technical parameters of any 
stations that are assigned new channels in the repacking process or 
that submit winning bids to change channels in the reverse auction. 
Stations that are reassigned in the repacking process or that submit 
winning UHF-to-VHF or high-VHF-to-low-VHF bids will be required to file 
minor change applications for construction permits using FCC Form 301, 
301-CA, or 340. These initial minor change applications for 
construction permits, including applications that propose alternative 
transmission facilities, will be exempt from filing fees. See 47 CFR 
1.1116(a). However, an applicant requesting any additional modification 
will be subject to the appropriate fee. After the Commission completes 
the repacking and channel substitution process, the Media Bureau will 
resume using the current rulemaking process to make new channel 
allotments and will a proceeding to amend Section 73.622 of the rules 
to reflect all new full power channel assignments in a revised Table.
    392. Issues that would be considered through the use of rulemaking 
and major change application procedures, such as preservation of 
service to existing viewers and compliance with interference and other 
technical rules, will be addressed through the repacking methodology 
used to generate new channel assignments. Use of a rulemaking process 
also would be burdensome, cause delays, and would be inconsistent with 
the goal of expeditiously implementing the results of the auction and 
repacking process. The use of minor change applications will help 
facilitate an expeditious post-auction transition because they can be 
processed more quickly than major changes.
    393. Stations will be required to file minor change applications 
during a three-month filing window that will begin upon the release of 
the Channel Reassignment PN. This filing deadline will apply to all 
stations that are reassigned to a new channel in the repacking process 
or via a winning UHF-to-VHF or high-VHF-to-low-VHF bid, even if they 
wish to apply for an alternate channel or expanded facilities as 
discussed below. This period will provide stations with significantly 
more time to prepare their applications than the 45-day deadline that 
typically follows the conclusion of a channel change rulemaking 
proceeding. A longer filing period is appropriate because stations that 
are assigned new channels in the repacking process will have no prior 
input into the choice of channel. While stations may need more time to 
prepare their applications than is typically afforded for voluntary 
channel changes, a three-month filing period will be adequate because 
the technical facilities stations must apply for will be specified in 
the Channel Reassignment PN and, consequently, the amount of

[[Page 48492]]

engineering work stations will need to do before filing their 
applications will be limited. Stations unable to meet the three-month 
deadline for submission of their minor change application will have the 
option to seek a waiver no later than 30 days prior to the deadline. 
Any stations that are granted a waiver of the construction permit 
application deadline nonetheless will be required to complete their 
transition pursuant to the process and by the deadlines established 
below. The fact that a station intends to file for an alternate channel 
or expanded facility as set forth below would not constitute ``good 
cause'' for failing to meet the three-month filing deadline, except in 
those instances where it is impossible for the station to apply for the 
facility assigned in the repacking process. This could occur, for 
example, if a station is unable to construct the facility specified in 
the Channel Reassignment PN on the tower on which it is operating at 
the time the Public Notice is released. Because of the finite 
reimbursement period established in the Spectrum Act and the deadlines 
under which stations will be required to complete their transitions, 
stations are strongly encouraged to submit their applications by the 
three-month deadline, if possible.
    394. Stations reassigned to different channels within their 
existing band will have the flexibility to propose transmission 
facilities in their initial construction permit applications that would 
slightly extend their coverage contour, as defined by the technical 
parameters specified in the Channel Reassignment PN. The Commission's 
repacking methodology will preserve stations' existing antenna azimuth 
patterns and locations (i.e., their geographic coordinates and antenna 
height). However, some stations may need to request a slightly 
different antenna pattern or slightly different location than specified 
in the Channel Reassignment PN that necessarily may result in a 
slightly larger coverage contour in some directions. Such deviations 
may be necessary, for example, because the original antenna model is 
not available on the reassigned channel or because the dimensions of 
the new antenna necessitate a slightly different mounting location on a 
tower. Also, some stations reassigned to a different channel within 
their band may experience some loss in coverage area due to propagation 
differences between channels.
    395. Accordingly, stations may propose transmission facilities in 
their initial construction permit applications that will increase their 
coverage contour if such facilities: (1) Are necessary to achieve the 
coverage contour specified in the Channel Reassignment PN or to address 
loss of coverage area resulting from their new channel assignment; (2) 
will not extend a full power station's noise limited contour or a Class 
A station's protected contour by more than one percent in any 
direction; and (3) will not cause new interference, other than a 
rounding tolerance of 0.5 percent, to any other station. In proposing 
facilities under this option, stations will be required to use a 
manufactured antenna that has a pattern that closely conforms to the 
coverage area based on the technical parameters in the Channel 
Reassignment PN. A one percent coverage contour increase is de minimis 
and providing this flexibility will assist broadcasters in engineering 
their facilities and quickly transitioning to their new channels. 
Stations reassigned to a channel within the same band that wish to 
extend their contour area by more than one percent may do so as 
discussed below.
    396. Due to antenna pattern variations between UHF and VHF antennas 
and between high VHF and low VHF antennas, some stations moving from 
the UHF to the VHF band or from the high VHF to the low VHF band may 
not be able to obtain an antenna that replicates the coverage contour 
reflected in the Channel Reassignment PN. Accordingly, stations moving 
to or between the VHF bands may specify an antenna that would result in 
a larger coverage contour than that resulting from the technical 
parameters specified in the Channel Reassignment PN, as long as the 
proposed facility will not cause new interference, other than a 
rounding tolerance of 0.5 percent, to any other station.
    397. The Commission also will provide expedited processing for 
certain applications if a station's application meets all three of the 
following requirements: (1) It does not seek to expand the coverage 
area, as defined by the technical parameters specified in the Channel 
Reassignment PN, in any direction; (2) it seeks authorization for 
facilities that are no more than five percent smaller than those 
specified in the Channel Reassignment PN with respect to predicted 
population served; and (3) it is filed within the three-month deadline 
for submission of minor change applications. The Commission adopted the 
same expedited processing procedure with the same criteria during the 
DTV transition, which enabled the Media Bureau to quickly process a 
large percentage of the post-transition digital construction permit 
applications it received after adopting the post-transition Table of 
Allotments. Stations that propose transmission facilities in their 
initial construction permit applications that extend the coverage 
contour specified in the Channel Reassignment PN will not qualify for 
expedited processing.
b. Alternate Channel and Expanded Facilities Opportunities
    398. Stations assigned to new channels in the repacking process as 
well as winning UHF-to-VHF and high-VHF-to-low-VHF bidders will have an 
opportunity to seek an alternate channel. Stations moving from a UHF to 
a VHF channel will not be permitted to request an alternate UHF 
channel. Allowing such requests would be directly contrary to the 
premise of UHF-to-VHF bids. For the same reason, stations submitting 
winning UHF-to-VHF bids that specify the high-VHF band or the low-VHF 
band, and stations submitting winning high-VHF-to-low-VHF bids, will 
not be permitted to request a channel outside of their assigned band. 
In some cases, a broadcaster may determine that a different channel 
will be more desirable or will make the transition process simpler and 
less costly. Stations assigned to new channels and winning UHF-to-VHF 
and high-VHF-to-low-VHF bidders may also apply for construction permits 
for ``expanded facilities'' on their new channels. ``Expanded 
facilities'' are those that propose a change in height above average 
terrain, effective radiated power, or transmitter location that (i) 
would be considered a minor change under the Commission's rules; and 
(ii) in the case of a station reassigned to another channel within its 
existing band, would result in a change in such station's contour 
beyond one percent in any direction from the coverage area defined by 
the technical parameters specified in the Channel Reassignment PN. As a 
practical matter, stations' ability to identify an available alternate 
channel or to expand their facilities may be limited as a result of the 
repacking process. In general, if an application for an alternate 
channel or expanded facilities is granted, the deadline in the 
construction permit for the alternate channel or expanded facilities 
will be the same as the deadline in the station's initial construction 
permit. The Commission will consider granting longer construction 
periods for alternate channels or expanded facilities in situations 
where extenuating circumstances justify such an extension.
    399. In view of the anticipated scarcity of available broadcast 
spectrum to accommodate proposals for alternate channels and expanded 
facilities

[[Page 48493]]

following the repacking process, the Commission will give a filing 
priority to certain stations, including any station that demonstrates 
that it is unable to construct facilities that meet the technical 
parameters specified in the Channel Reassignment PN, or the permissible 
contour coverage variance discussed above, for reasons beyond its 
control. These stations will be required to demonstrate in a request 
for a waiver of the three-month filing deadline for initial 
construction permit applications that it was not possible to file an 
application that was in compliance with the technical parameters in the 
Channel Reassignment PN or with the flexibility to propose alternative 
transmission facilities discussed above, which require that a station 
apply for its new channel at its current transmission site. The 
Commission delegates authority to the Media Bureau to define other 
categories of stations that may be eligible for a filing priority due 
to extraordinary circumstances beyond a station's control. Stations 
qualifying for a priority may request either an alternate channel or 
expanded facilities on their newly assigned channel. As is the case 
with all major and minor modification applications, stations filing for 
alternate channels or expanded facilities will be required to 
demonstrate that their proposals meet all existing technical and 
interference requirements and would serve the public interest. 
Moreover, modification applications filed by Class A stations will not 
be accepted if they fail to comply with the interference protection 
rules for Class A stations. A second filing opportunity will be offered 
to all other stations that are assigned new channels in the repacking 
process or that are winning UHF-to-VHF or high-VHF-to-low-VHF bidders 
to file for alternate channels or expanded facilities. Consistent with 
the Media Bureau's past practice in lifting filing freezes, 
applications filed during the first filing opportunity would be treated 
as cut-off as of the end of that filing period, and would be entitled 
to interference protection from subsequently filed applications.
    400. A station seeking an alternate channel must submit a 
construction permit application on FCC Form 301, 301-CA, or 340. Some 
priority stations will not have an opportunity to submit an application 
for a construction permit during the initial three-month filing window. 
The initial construction permit applications of these stations for 
alternate channels or expanded facilities will not be subject to filing 
fees. An applicant requesting any additional modification, however, 
will be subject to the appropriate fee. Non-priority stations seeking 
alternate channels or expanded facilities will be subject to applicable 
filing fees. Unlike new channel assignments generated by the Commission 
in the repacking process, these alternate channel requests will be 
initiated by licensees without the benefit of the Commission's 
repacking methodology. Thus, applications for alternate channels will 
be considered major change applications and thus will be subject to 
local public notice requirements and a 30-day petition to deny filing 
window. Applications for expanded facilities on the channel assigned to 
a station in the Channel Reassignment PN are limited to minor changes.
    401. The Commission delegates authority to the Media Bureau to 
issue public notices announcing filing opportunities for alternate 
channels and expanded facilities applications and specifying 
appropriate processing guidelines, including the standards to qualify 
for priority filing, ``cut-off'' protections, and means to avoid or 
resolve mutual exclusivity between applications. As discussed above, 
LPTV stations that were eligible for a Class A license but did not file 
an application for a Class A license until after February 22, 2012 will 
not be protected in repacking. If such a station obtains a Class A 
license and is displaced in the repacking process, it may file a 
displacement application during one of the filing opportunities for 
alternate channels. Except as indicated here, existing displacement 
rules will apply to such applications. See 47 CFR 73.3572(a)(4) and 
74.787(a)(4). The Commission delegates authority to the Media Bureau to 
determine whether such stations should be permitted to file for new 
channels along with priority stations or in the second filing 
opportunity. The Commission anticipates that the first filing 
opportunity to be established by the Media Bureau will open after the 
staff substantially completes its processing of initial minor change 
construction permit applications following the release of the Channel 
Reassignment PN. After all stations that are reassigned new channels in 
the repacking process and successful UHF-to-VHF and high-VHF-to-low-VHF 
bidders have been given an opportunity to apply for alternate channels 
or expanded facilities, the Commission anticipates that the Media 
Bureau will lift other filing freezes now in place.
c. Channel Sharing Stations
    402. The term ``sharee'' refers to a station that relinquishes its 
frequency to move to the frequency of a ``sharer'' station. More than 
two stations may share a channel. Thus, although there would be only 
one sharer in each channel sharing relationship, there could be 
multiple sharees. The licensees of channel sharing stations (i.e., both 
the sharer station and the sharee station(s)) will be required to 
submit license applications within three months after the sharee 
stations receive their auction proceeds. The Commission delegates 
authority to the Media Bureau to amend FCC Forms 302 and 302-CA prior 
to the commencement of the auction to add a category for the licensing 
of shared channels. As discussed below, sharee stations will be 
required to terminate operations on their pre-auction channels by this 
deadline. This same deadline will apply regardless of whether the 
sharer station is assigned a new channel in the repacking process. 
While channel sharing stations that are reassigned to a new channel 
will be afforded a construction period before they must transition to 
their reassigned channel, there is no basis to delay the commencement 
of shared operations or the clearing of the sharee's channel. In the 
event the sharer station is assigned a new channel in the repacking 
process, all sharing stations will be required to jointly file a Form 
301 minor change construction permit application consistent with 
requirements in the Construction Permit Application Filing Requirements 
Section. The Commission delegates authority to the Media Bureau to 
amend FCC Forms 301, 301-CA, and 340 prior to the commencement of the 
auction to add a category for the licensing of shared channels. Upon 
grant of such license applications, Commission staff will issue each 
station in a sharing arrangement a new license indicating ``shared'' 
status through the use of an ``S,'' designating the shared channel as 
the operating frequency for each station, specifying each station's 
class of service (i.e., commercial full power, NCE, or Class A), and 
indicating a sharee station's new community of license where 
appropriate.
2. Construction Schedule and Deadlines
    403. The Commission concluded that the record in the proceeding 
shows the need for a post-incentive auction transition timetable that 
is flexible for broadcasters and that minimizes disruption to viewers. 
At the same time, the transition schedule must provide certainty to 
wireless providers and be completed as expeditiously as possible. With 
these goals in mind, the Commission adopted a 39-month transition 
period (the Broadcast Transition Period) for broadcasters that

[[Page 48494]]

are assigned new channels in the repacking process and winning UHF-to-
VHF and high-VHF-to-low-VHF bidders. The Broadcast Transition Period 
will include (1) the three-month period beginning upon the release of 
the Channel Reassignment PN, during which broadcasters will complete 
and file their construction permit applications (stations eligible for 
reimbursement from the Reimbursement Fund also will be required to file 
their estimated cost forms by this deadline) followed by (2) a 36-month 
period consisting of varied construction deadlines (the Broadcast 
Construction Period).
    404. Post-auction, the Media Bureau, on delegated authority, will 
establish a set of construction deadlines during the Broadcast 
Construction Period. While some stations will be given 36 months to 
complete construction, other stations will be given shorter deadlines. 
At the end of the 39-month Broadcast Transition Period, all stations 
must cease operating on their pre-auction channels regardless of 
whether they have completed construction of the facilities for their 
post-auction channel.
    405. The Commission adopted a three-month deadline from the receipt 
of auction proceeds by winning license relinquishment bidders and 
channel sharing ``sharee'' bidders to terminate operations on their 
pre-auction channels (a ``sharee'' station is a full power or Class A 
television station that agrees to relinquish its channel and share with 
another station (the sharer) pursuant to a channel sharing bid in the 
reverse auction). The Commission offered stations the flexibility to 
seek a single extension of their construction deadlines and to operate 
temporary facilities during construction. Although it will consider 
extensions of stations' individual construction deadlines for new post-
auction channels, the Commission stated that no station with a new 
channel assignment will be permitted to operate on its pre-auction 
channel after the end of the Broadcast Construction Period. This 
approach will provide sufficient flexibility to both broadcasters and 
the Commission to ensure a successful, expeditious transition, while 
minimizing disruption to consumers and providing appropriate certainty 
to the wireless industry.
a. Construction Period for Stations With New Channel Assignments
    406. The Commission adopted a 36-month Broadcast Construction 
Period that will begin upon the filing deadline for construction permit 
applications for new channel assignments (i.e., three months after the 
release of the Channel Reassignment PN). The Commission concluded that 
a phased construction schedule, with the assignment of varying 
construction deadlines within this 36-month period, is most likely to 
ensure a successful transition for all broadcasters. Accordingly, the 
Commission delegated authority to the Media Bureau to establish a set 
of deadlines within the Broadcast Construction Period to all stations 
that are reassigned to a new channel in the repacking process and all 
winning UHF-to-VHF and high-VHF-to-low-VHF bidders. The deadlines may 
vary by region, by the complexity of construction tasks, or by other 
factors the Media Bureau finds appropriate. Regardless of a station's 
individual construction schedule, no station will be permitted to 
continue to operate on its pre-auction channel beyond the end of the 
Broadcast Construction Period. Any station that has not completed 
construction by the end of the Broadcast Construction Period must go 
dark on its pre-auction channel and cease operations until it finishes 
construction of its new facilities. In addition, as soon as a station 
begins operating on its post-auction channel, it must terminate 
operations on its pre-auction channel.
    407. The Commission directed the Media Bureau, as soon as possible 
after the filing of construction permit applications, to announce both 
the phased construction schedule and stations' construction deadlines 
in a public notice (any permit issued before the Media Bureau 
establishes the pertinent construction deadlines will be conditioned on 
the Media Bureau's subsequent adoption of such deadlines; as soon as a 
station's deadline is determined, the Media Bureau will reissue the 
station's authorization with the construction deadline). The Commission 
stated that it expects that the Media Bureau will work with the 
Wireless Telecommunications Bureau to coordinate the construction 
deadlines of stations transitioning to new channels, taking into 
account the needs of forward auction winners and their construction 
plans.
    408. The Commission was persuaded by the record that establishing a 
single deadline by which all stations must complete construction is 
infeasible. The Commission concluded that the flexibility to evaluate 
and address all of the relevant variables through a phased construction 
schedule based on the actual outcome of the auction will be critical to 
the success of the transition. This approach will enable the Media 
Bureau to take each of the above factors, as well as any others that 
may be relevant, into account.
    409. The Commission also concluded that the proposal in the NPRM to 
complete the entire post-auction transition within 18 months would not 
provide sufficient time for all stations to complete the transition 
process. The Commission agreed with commenters that a universal 18-
month transition deadline would not adequately take into account the 
many factors that will have to be considered when determining station 
construction deadlines. The Commission found that a longer construction 
period is necessary to ensure a smooth channel transition for all 
stations.
    410. The Commission found that a 36-month Broadcast Construction 
Period will provide sufficient time to complete a phased transition of 
all stations assigned to new channels. The Commission concluded that 36 
months is the appropriate maximum time period for stations to complete 
construction after they request permits for their post-auction 
facilities. Moreover, adopting a construction period that closely 
coincides with the three-year period established in the Spectrum Act to 
reimburse broadcasters for their repacking expenses will best ensure 
that stations are successfully reimbursed for their reasonably incurred 
expenses.
    411. The Commission concluded that it is not necessary to afford 
all reassigned broadcasters 36 months or longer to construct post-
auction facilities. The Commission recognized that some stations will 
face significant challenges in completing the post-auction transition 
to their new facilities but stated that the Media Bureau will take such 
challenges into account when assigning individual construction 
deadlines. The Commission found that adopting a lengthier post-auction 
transition period could depress forward-auction participation or the 
value of investments made by forward auction winners. The Commission 
stressed that the end of the Broadcast Construction Period will mark 
the latest date on which broadcasters will be permitted to cease 
operations on their pre-auction channels. Moreover, as discussed below, 
license relinquishment bidders and sharee stations that are parties to 
winning channel sharing bids will be required to cease operations 
within three months of receiving their auction proceeds. Thus, it is 
likely that many full power and Class A stations will vacate spectrum 
repurposed for flexible wireless use well before the end of the 
Broadcast Construction Period.

[[Page 48495]]

b. Winning Bidders for License Relinquishment and Channel Sharing
    412. The Commission will require that all winning license 
relinquishment bidders terminate operations on their pre-auction 
channels within three months of receipt of their reverse auction 
proceeds. The Commission will allow these stations to seek special 
temporary authority or waiver of the operating rules, including its 
rules on minimum operating hours, in order to facilitate the final 
termination of their operations. In addition, the Commission adopted a 
three-month deadline from receipt of reverse auction proceeds for 
sharee stations that are party to a winning channel sharing bid to 
terminate operations on their pre-auction channel and transition to 
their shared channel (sharee stations must comply with the consumer and 
MVPD notification requirements set forth in the Report and Order and 
will be required to notify the Commission of the termination of 
operations on their pre-auction channel pursuant to the established 
procedures). The Commission expects that the termination of operations 
of the sharee's pre-auction channel and transition to a shared channel 
will occur on the same day and thus not result in any gap in service. 
Because these stations will not have to construct new facilities in 
order to effectuate their channel change, three months is sufficient 
for them to cease operations on their pre-auction channels. This 
deadline will apply regardless of whether or not the sharer station to 
which the sharee station is transitioning is reassigned to a new 
channel in the repacking process. If a sharer station is reassigned to 
a new channel, all broadcasters with shared status will be required to 
cease operations on the sharer's pre-auction channel and transition to 
the new channel in accordance with the phased post-auction transition 
procedures adopted in the Report and Order and the construction permit 
issued for the new channel (winning channel sharing bidders whose 
shared channel is reassigned in the repacking process will be required 
to share on the sharer's pre-auction channel prior to construction of 
their newly assigned channel).
    413. The Commission will permit stations terminating operations to 
submit a waiver request pursuant to 47 CFR 1.3 of the rules (such 
waiver requests must be filed electronically in CDBS as a request for a 
legal Special Temporary Authority, provide the requisite waiver showing 
and include a proposed termination date, not to exceed three additional 
months; stations should file such requests as soon as it becomes 
apparent that they will not be able to meet the three-month termination 
deadline). In addition, no winning license relinquishment or channel 
sharing bidder will be granted a waiver beyond the end of the Broadcast 
Construction Period. The staff will view requests for up to three 
additional months to terminate operations most favorably, and the 
Commission anticipates that requests for any additional time will be 
unlikely to meet the waiver standard.
c. Additional Flexibility for Stations With New Channel Assignments
    414. The Commission will permit stations assigned new channels in 
the repacking process and winning UHF-to-VHF and high-VHF-to-low-VHF 
bidders to seek a single extension of up to six months of their 
original construction deadlines. Although a construction deadline may 
be extended beyond the end of the Broadcast Construction Period, 
stations may not operate their pre-auction channels after that date 
(stations that are still constructing after the end of the Broadcast 
Construction Period will have to go dark on their pre-auction channels 
while they complete construction of their new channel facilities).
    415. The Commission will evaluate requests for extensions using 
procedures similar to those used during the DTV transition, based on 
criteria tailored to the types of construction stations will need to 
undertake during the post-auction transition. Stations anticipating the 
need for an extension will be required to submit an extension 
application no less than 90 days before the expiration of their 
construction permit and demonstrate that, despite all reasonable 
efforts, they are unable to complete construction of their new 
facilities on time due to circumstances that were either unforeseeable 
or beyond their control (extension requests must be filed 
electronically in CDBS using FCC Form 337). The following circumstances 
may justify an extension of a station's construction deadline: (1) 
Weather-related delays, including a tower location in a weather-
sensitive area; (2) delays in construction due to the unavailability of 
equipment or a tower crew; (3) tower lease disputes; (4) ``unusual 
technical challenges,'' such as a top-mounted or side-mounted antenna 
or the need to coordinate channel changes with another station; or (5) 
delays faced by broadcast stations that must obtain government 
approvals, such as land use or zoning approvals, or that are subject to 
competitive bidding requirements prior to purchasing equipment or 
services. The Commission will permit licensees to rely on other 
circumstances to support an extension only if the licensee is able to 
show that the circumstance was unforeseeable or beyond its control and 
that it took all reasonable efforts to resolve the issue.
    416. The Commission will permit stations to rely on ``financial 
hardship'' as a criterion for seeking an extension of time only in 
limited circumstances. In the past, the Commission has allowed stations 
to support an extension request based on a showing that ``the cost of 
meeting the minimum build-out requirements exceeds the station's 
financial resources.'' In this case, because stations will be eligible 
for an initial allocation of estimated construction costs, stations 
should not have to rely significantly on self-financing or outside 
financing for their construction. In addition, a station transitioning 
to a new channel as a result of a winning UHF-to-VHF or high-VHF-to-
low-VHF bid will have access to auction proceeds to fund new 
construction. Accordingly, the Commission will allow stations that are 
subject to an active bankruptcy or receivership proceeding to seek an 
extension based on financial hardship, provided that the station makes 
an adequate showing that it has filed requests to proceed with 
construction in the relevant court proceedings. The existence of such 
proceedings, and the restrictions that may be imposed on the use of 
funds, justify allowing such stations to seek additional time to 
complete construction, if necessary. Any other station that seeks an 
extension of time based on financial hardship must demonstrate that, 
although it is not subject to an active bankruptcy or receivership 
proceeding, rare and exceptional financial circumstances nevertheless 
warrant granting additional time to complete construction of their 
facilities. Stations will be allowed, if granted, only a single 
extension of up to six months beyond their original construction 
deadline before being subject to the Commission's stricter tolling 
provisions. The Commission rejected calls to use its stricter 
``tolling'' criteria to any extension requests finding that use of 
extension criteria for the first extension request is appropriate.
    417. The Commission will also allow stations to operate with 
temporary facilities while they complete construction (stations seeking 
an STA must satisfy the notice and filing requirements of rules and 
file an electronic request through CDBS). Absent an STA, no station 
will be permitted to operate on its pre-auction

[[Page 48496]]

channel past the station's individual construction deadline, and the 
Commission will not grant STAs to operate on pre-auction channels past 
the end of the Broadcast Construction Period. The Commission will allow 
stations, on a case-by-case basis, to seek STAs for technical solutions 
that are similar to those permitted during the DTV transition, will 
examine all such requests to determine whether they would serve the 
public interest, and will require that all STAs not cause impermissible 
interference to other broadcast or wireless licensees. All STAs granted 
in connection with the post-auction transition will be for a maximum of 
180 days, the amount of time provided under the Communications Act and 
the Commission's rules for STA requests. In addition, the Media Bureau 
will reserve the right to modify or cancel an STA at any time without 
prior notice at its sole discretion.
    418. The Commission also notes that the license of any station that 
is dark for any consecutive 12-month period expires at the end of that 
period, except that the Commission can extend or reinstate such license 
``to promote equity and fairness.'' Stations with new channel 
assignments that remain dark for any consecutive 12-month period may 
seek an extension or reinstatement of their license and a waiver of the 
pertinent Commission rules. In considering such requests, the 
Commission will take into account the extent to which a station has 
been involuntarily forced to remain dark as a result of the repacking 
process and whether, in light of the facts presented, equity and 
fairness dictate a license extension or reinstatement and a waiver.
3. Consumer Education
    419. The Commission will require that all ``transitioning 
stations'' air viewer notifications for a minimum of 30 days prior to 
the date that the station will terminate operations on its pre-auction 
channel (``transitioning stations'' are defined as full power and Class 
A television stations that are: (1) Reassigned to new channels by the 
Commission, (2) successful UHF-to-VHF and high-VHF-to-low-VHF bidders, 
(3) successful license relinquishment bidders, or (4) parties to a 
successful channel sharing bid; channel sharer stations will be 
required to participate in consumer education only if they are 
reassigned to a new channel in the repacking process). The Commission 
will provide stations with flexibility to target their messages to 
their specific situations in order to minimize public confusion and the 
effect of any service disruptions.
    420. Transitioning stations that operate on a commercial basis will 
be required to air a mix of Public Service Announcements (PSAs) and 
crawls. Such stations must air at least one transition PSA and run at 
least one transition crawl in every quarter of every day for 30 days 
prior to the date that the station terminates operations on its pre-
auction channel. Further, one of the required PSAs and one of the 
required crawls must be run during primetime hours each day. Crawls 
must run during programming for no less than 60 consecutive seconds 
across the bottom or top of the viewing area and be provided in the 
same language as a majority of the program carried by the station. 
Crawls must include the date that the station will terminate operations 
on its pre-auction channel, inform viewers of the need to rescan if the 
station has received a new channel assignment, and explain how viewers 
may obtain more information by telephone or online. PSAs must have a 
duration of at least 15 seconds, and each PSA must provide, at a 
minimum, the same information as required for crawls. For stations 
relocating to new channels, PSAs also must provide instructions to both 
over-the-air and multichannel video programming viewers regarding how 
to continue watching the station. In addition, the Commission requires 
that transition PSAs be closed-captioned. Stations are encouraged to 
include any other details about their transition that they believe to 
be important in their notifications, and stations are free to air 
additional notifications regarding the transition that they deem 
beneficial to their viewers.
    421. Noncommercial educational (NCE) full power stations may choose 
to comply with notification requirements either through the framework 
for commercial stations or by airing 60 seconds per day of on-air 
consumer education PSAs for 30 days prior to termination of operations 
on their pre-auction channel. NCE stations choosing the alternate plan 
will have the discretion to choose the timeslots for these PSAs. The 
NCE transition PSAs must include the same information as noted above 
and must be closed-captioned. NCE stations electing this alternative 
are expected to air these PSAs in addition to, and not in lieu of, PSAs 
on other issues of importance to their local communities.
    422. The Commission will not impose periodic reporting requirements 
on transitioning stations finding that such requirements will not be 
necessary during the forthcoming transition given the less extensive 
nature of the consumer education requirements being adopted. Instead, 
the Commission will require that stations transitioning to a new 
channel place a certification of compliance with consumer notification 
requirements in their online public files within 30 days after 
beginning operations on their post-auction channels. In the case of 
winning license relinquishment bidders, stations must include the 
certification in their notifications of discontinuation of service.
    423. The Commission directs the Consumer and Governmental Affairs 
Bureau (CGB), working in coordination with the Media Bureau and the 
Wireless Telecommunications Bureau, to develop a comprehensive consumer 
outreach plan to enhance consumer awareness regarding the transition. 
These efforts should be coordinated with stakeholder groups' outreach 
efforts. For example, CGB should consider updating the Commission's 
existing call center capabilities to offer consumer assistance on such 
matters as rescanning and other means to resolve potential reception 
issues. The Commission also directs CGB to encourage the development of 
third-party call centers, such as one that might be established by a 
group of Transitioning Stations working together. In addition, CGB 
should examine the possibility of providing additional information and 
guidance to consumers on how to prepare for the transition through the 
Commission's Web site (www.fcc.gov). For example, the staff could post 
maps online to inform consumers regarding the station signals that will 
be affected by the transition, as it did during the DTV transition. CGB 
also should endeavor, where staff and resources are available, to 
conduct in-person outreach at the most relevant consumer events.
4. Notice to MVPDs
    424. The Commission will require all transitioning stations to 
provide notice to relevant multichannel video program distributors 
(MVPDs) that: (1) No longer will be required to carry the station 
because it will cease operations or because of the relocation of a 
channel sharing sharee station; (2) currently carry and will continue 
to be obligated to carry a station that will change channels; or (3) 
will become obligated to carry a station due to a channel sharing 
relocation. The required notice must be provided in the form of a 
letter notification and include the following information: (1) Date and 
time of any channel changes; (2) pre-auction and post-transition 
channel assignments; (3) modification, if any, to antenna

[[Page 48497]]

position, location, or power levels; (4) stream identification 
information for channel sharing stations; and (5) engineering staff 
contact information. Should any of this information change during the 
station's transition, an amended notification must be sent. For cable 
systems, the letter must be addressed to the system's official address 
of record provided in the cable system's most recent filing in the 
Cable Operations and Licensing System (COALS) Form 322. For all other 
MVPDs, the letter must be addressed to the official corporate address 
registered with their State of incorporation.
    425. Further, stations are required to provide notice within the 
following time frames: (1) For successful license relinquishment 
bidders, not less than 30 days prior to terminating operations; (2) for 
channel sharing sharee stations, not less than 30 days prior to 
terminating operations of the sharee's pre-auction channel; (3) for all 
channel sharing stations (i.e., both the sharer station and sharee 
station(s)), not less than 30 days prior to initiation of operations on 
the sharer channel; and (4) for all other stations transitioning to a 
new channel, including stations that are assigned to new channels in 
the repacking process and successful UHF-to-VHF and high-VHF-to-low-VHF 
bidders, not less than 90 days prior to the date on which they will 
begin operations on their reassigned channel. In addition, should a 
station's anticipated transition date change due to an unforeseen delay 
or change in transition plan, the station must send a further notice to 
affected MVPDs informing them of the new anticipated transition date. 
The Commission rejects longer notice periods finding that it is not 
likely that stations will know that far in advance when construction 
will be completed and operation on a new channel will begin. In 
addition, the adopted timeframes, as well as the requirement to notify 
MVPDs of any change to anticipated transition dates, will provide ample 
time for MVPDs to make the necessary changes to their systems.
    426. The Commission waived the 30-day advance notice requirement in 
47 CFR 76.1603(c) with respect to deletions from a cable system's 
channel line up resulting from a successful license relinquishment bid. 
Instead, the Commission requires MVPDs to provide such notice as soon 
as practical.
5. Reimbursement of Relocation Costs
    427. The Spectrum Act requires the Commission to reimburse 
broadcast television licensees for costs ``reasonably incurred'' in 
relocating to new channels assigned in the repacking process and MVPDs 
for costs reasonably incurred in order to continue to carry the signals 
of stations relocating to new channels as a result of the repacking 
process or a winning reverse auction bid. As explained in the NPRM, 
Congress specified that these reimbursements be made from the TV 
Broadcaster Relocation Fund (the Reimbursement Fund), and that the 
amount available for reimbursement of relocation costs is $1.75 
billion. In addition, under the Spectrum Act, the Commission must make 
all reimbursements within three years after completion of the forward 
auction (the Reimbursement Period). The Commission delegates rulemaking 
authority to the Media Bureau to address additional aspects of the 
reimbursement process at the appropriate time.
a. Television Station Licensees and MVPDs Eligible for Reimbursement
    428. With respect to broadcasters, the Commission adopts the 
tentative conclusion that the reimbursement mandate applies only to 
full power and Class A television licensees that are involuntarily 
reassigned to new channels in the repacking process pursuant to Section 
6403(b)(1)(B)(i). The Commission will not reimburse winning reverse 
auction bidders (i.e., winning UHF-to-VHF, high-VHF-to-low-VHF, or 
channel sharing bidders) for voluntary frequency changes. This 
interpretation is both consistent with the language of Section 
6403(b)(4) and reasonable, in that successful reverse auction bidders 
can be expected to cover any relocation costs stemming from their 
successful bids out of auction proceeds. As proposed in the NPRM, 
sharer stations that participate in a channel sharing arrangement will 
be eligible for reimbursement only if they are reassigned to a new 
channel in the repacking process. Moreover, consistent with the 
proposal in the NPRM, and as required by Section 6403(b)(4)(A)(i), the 
Commission will reimburse any station formerly on channel 51 that must 
relocate again because its new channel is reassigned in the repacking 
process, even if it previously relocated from channel 51 pursuant to a 
private agreement.
    429. Stations that are not reassigned to a new channel will not be 
eligible for reimbursement. Section 6403(b)(4)(A)(i) expressly mandates 
reimbursement only for television licensees ``that [are] reassigned 
under [Section 6403(b)(1)(B)(i)]'' in the repacking process, and does 
not require reimbursement for stations that are not reassigned to new 
channels. Some commenters argue that the Commission has discretionary 
authority to reimburse such broadcasters. Even assuming that the 
Commission has such authority, it declines to exercise it. In light of 
the limited amount of money Congress made available to reimburse 
broadcasters and MVPDs for relocation costs, the Commission will limit 
reimbursements to those provided for by the Spectrum Act. The 
Commission notes that, in some cases, stations that are not reassigned 
to new channels but that sustain expenses due to the repacking process 
may be reimbursed indirectly. The Commission notes, however, that in 
such a situation only the reassigned station would be eligible to seek 
reimbursement from the Reimbursement Fund for any such costs. For 
example, where multiple stations share a tower, a reassigned station 
that makes changes may be required to cover certain expenses incurred 
by other tower occupants. In such circumstances, the Commission will 
consider a claim from the reassigned station for reimbursement of such 
costs, so long as the reassigned broadcaster has a contractual 
obligation to pay these expenses through a contract entered into on or 
before the release date of this Order. Parties may receive such 
reimbursement with respect to contracts entered into after that date if 
they can show good cause for such reimbursement. The Commission also 
notes that there may be instances in which a non-reassigned station may 
benefit indirectly from a reimbursement to a reassigned station.
    430. MVPDs will be eligible for reimbursement when they reasonably 
incur costs in order to continue to carry broadcast stations that are 
reassigned as a result of the auction. The Commission anticipates that 
the vast majority of MVPD carriage expenses will be due to channel 
changes made by broadcast stations that an MVPD already carried prior 
to the auction. Moreover, the Commission anticipates that most MVPD 
carriage costs will result from broadcasters being reassigned to new 
channels, and not from a successful channel sharing bid. In the case of 
an involuntary channel reassignment or a winning UHF-to-VHF or high-
VHF-to-low-VHF bid, an MVPD that already carried the station in 
question will need to accommodate its new channel assignment. In the 
case of most channel sharing arrangements where the MVPD likely already 
carries the sharer station, the Commission expects that the MVPD's 
transition costs will be relatively inexpensive because it will not be 
required to accommodate a new

[[Page 48498]]

channel assignment. However, there may be a limited number of 
situations in which an MVPD incurs a new carriage obligation due to the 
relocation of a sharee station. The Commission concludes that MVPDs 
that must fulfill any such new carriage obligations will be eligible 
for reimbursement of their reasonably incurred costs, just as they will 
be eligible for reasonably incurred costs to continue carrying other 
reassigned stations and winning bidders. The Spectrum Act does not 
expressly mandate reimbursement for costs to continue to carry stations 
that submit winning high-VHF-to-low-VHF bids. However, the Commission 
concluded above that the Spectrum Act does not preclude the Commission 
from adopting this additional bid option, and similarly concludes that 
the Spectrum Act does not preclude it from reimbursing MVPDs for the 
reasonably incurred costs to continue carrying winning high-VHF-to-low-
VHF bidders.
    431. The Commission interprets Section 6403(b)(4)(A)(ii)(III), 
which mandates reimbursement of MVPDs' costs ``in order to continue to 
carry'' a broadcaster that relinquishes its spectrum to share with 
another licensee, to cover costs an MVPD reasonably incurs so that a 
broadcaster continues to be carried on an MVPD service after the 
auction, regardless of whether that particular MVPD or a different one 
previously carried the station. Although the statute does not directly 
address this issue, Section 6403(a)(4) guarantees that a channel sharee 
that had carriage rights before the auction will have the carriage 
rights that apply at its new shared location rather than its original 
location. Since Congress expressly preserved channel sharing 
broadcasters' carriage rights at their new locations regardless of 
whether an individual MVPD's carriage obligations are changed, it is 
reasonable to infer that Congress intended for MVPDs to be eligible for 
reimbursement when they incur costs in accommodating those rights. As 
NCTA explains, reading the statute as ``precluding reimbursement of a 
cable operator acting to fulfill the broadcaster's right to carriage 
would create an asymmetry'' that would penalize MVPDs. The Commission 
agrees with NCTA that such an outcome would be contrary to Congress' 
intent.
b. Reimbursement Process
    432. The Commission's goals in developing a reimbursement process 
are threefold. First, the process must be as simple and straightforward 
as possible to minimize the costs associated with reimbursement as well 
as the burdens on both affected parties and the Commission. Second, the 
process must be prompt and efficient in light of the three-year 
statutory deadline for issuing reimbursements. Third, the process must 
be fair: It must cover broadcasters' and MVPDs' eligible costs 
reasonably incurred and maximize the funds available for reimbursement 
by avoiding waste, fraud, and abuse.
    433. The Commission adopts a reimbursement process that provides 
initial allocations of funds to broadcasters and MVPDs based on their 
estimated costs. The funds will be available for draw down as the 
broadcasters and MVPDs incur expenses, followed by a subsequent 
allocation to the extent necessary. As discussed more fully below, all 
entities seeking reimbursement will be required to provide an estimate 
of their eligible costs following the release of the Channel 
Reassignment PN. The Media Bureau will review the estimates based on 
the Catalog of Eligible Expenses being developed by the Bureau. 
Eligible entities will be issued an initial allocation from the 
Reimbursement Fund equal to a set percentage of their estimated 
eligible costs. Prior to the end of the three-year Reimbursement 
Period, entities will provide information regarding their actual and 
remaining estimated costs and will be issued a final allocation, if 
appropriate, to cover the remainder of their eligible costs. If an 
overpayment is discovered after the end of the Reimbursement Period, 
entities will be required to return the excess to the Commission.
    434. Reimbursement Period. As discussed above, the Spectrum Act 
requires the Commission to make all required reimbursements no later 
than three years after completion of the forward auction. The 
Commission concludes above that the forward auction will be 
``complete'' when a public notice announces that the auction has ended. 
Accordingly, all required reimbursements must be made within three 
years of the date of that announcement. The Commission will not issue 
any reimbursements before completion of the forward auction.
    435. Estimated Versus Actual Cost Approach. The Commission will 
issue all eligible broadcasters and MVPDs an initial allocation of 
funds based on estimated costs, which will be available for draw down 
(from individual accounts in the U.S. Treasury) as the entities incur 
expenses, followed by a subsequent allocation to the extent necessary. 
Although the process established is similar to an approach based on 
advance payments, the Commission has concluded that such advances would 
not be permissible under Title 31 of the United States Code and 
applicable U.S. Treasury regulations and guidance thereunder. 
Specifically, in order to comply with U.S. Treasury requirements, the 
Commission must allocate funds to designated individual accounts within 
the U.S. Treasury that will be available for draw down as broadcasters 
and MVPDs incur eligible expenses. Under this approach, consistent with 
an advance payment approach, entities will be able to use federal funds 
initially to pay their expenses as they are incurred. The process the 
Commission adopts allows it to comply with its statutory obligations 
both to reimburse costs reasonably incurred under Section 6403(b)(4)(A) 
and to provide entities with the funds to implement their relocation 
changes within the statutory three-year reimbursement period under 
Section 6403(b)(4)(D). In addition, it preserves the integrity of the 
Fund by reducing the likelihood of waste, fraud, and abuse.
    436. Submission of Estimated Costs. No later than three months 
following release of the Channel Reassignment PN, all broadcasters and 
MVPDs that are eligible for reimbursement will be required to file a 
form providing an estimate of their channel relocation costs. These 
forms will be due at the same time that broadcasters assigned new 
channels must file their construction permit applications to implement 
the channel reassignments. Entities must update the form if 
circumstances change substantially. For example, such an updated form 
would be required if entities later become aware of substantial 
expenses that were not identified on the initial form or if they make a 
subsequent determination that money from the Reimbursement Fund should 
be expended for equipment or other expenses different from those 
outlined in the initial estimated cost form. The estimated cost forms, 
along with the submissions discussed below, will be filed with the 
Commission electronically and will be publicly available. Entities 
requesting confidential treatment of information included in either 
form should submit a request under Section 0.459 of the Commission's 
rules. Even if some forms or documents are confidential, the Media 
Bureau will make public the amounts distributed from the Reimbursement 
Fund to each broadcaster and MVPD. MVPDs must review the Channel 
Reassignment PN to determine whether stations they currently carry are 
changing channels. If an entity that did not file an estimated cost 
form becomes aware of an expense

[[Page 48499]]

eligible for reimbursement after the three-month deadline, it may file 
a late estimated cost form together with an explanation of why the form 
could not be timely filed. The Commission will consider any late-filed 
forms on a case-by-case basis.
    437. On the estimated cost form, eligible broadcasters will provide 
an estimate of the costs they expect to reasonably incur to change 
channels, and MVPDs will estimate the costs they expect to reasonably 
incur to accommodate new channel assignments. The estimated cost form 
for television stations will reference the final Catalog of Eligible 
Expenses, which will contain a list of many, but not necessarily all, 
of the modifications a station may have to make in order to change its 
channel, as well as the predetermined estimate of the cost, or range of 
costs, for equipment and other expenses associated with those 
modifications. Similarly, the estimated cost form for MVPDs will 
contain a list of many, but not necessarily all, of the cable or 
satellite system changes an MVPD may be required to make to accommodate 
new station channel assignments, as well as the predetermined estimate 
of the cost or cost range for most of those changes. For equipment or 
other changes for which there is a predetermined cost estimate, 
stations and MVPDs may select either the predetermined cost estimate or 
provide their own individualized estimate if they believe the 
predetermined estimate does not fully account for their specific 
circumstances. Entities that reject the predetermined estimate as too 
low will be required to justify the higher cost. For any expenses for 
which there is not a predetermined cost estimate, the station or MVPD 
will be required to provide an individualized cost estimate. The 
Commission will require entities that provide such individualized cost 
estimates to submit supporting evidence and to certify that the 
estimate is made in good faith.
    438. Regardless of whether they are claiming predetermined cost 
estimates or their own individualized estimated costs, each broadcaster 
and MVPD will be required to certify, inter alia, that: (1) It believes 
in good faith that it will reasonably incur all of the estimated costs 
that it claims as eligible for reimbursement on the estimated cost 
form, (2) it will use all money received from the Reimbursement Fund 
only for expenses it believes are eligible for reimbursement, (3) it 
will comply with all policies and procedures relating to allocations, 
draw downs, payments, obligations, and expenditures of money from the 
Reimbursement Fund, (4) it will maintain detailed records, including 
receipts, of all costs eligible for reimbursement actually incurred, 
and (5) it will file all required documentation of its relocation 
expenses as instructed by the Media Bureau.
    439. After the estimated cost forms have been submitted, the Media 
Bureau will review them. For entities that choose to provide their own 
cost estimate (i.e., either a cost estimate higher than the 
predetermined cost estimate or an individualized cost estimate for an 
expense for which the Commission does not provide a predetermined cost 
estimate), the Bureau will review the required justification for the 
estimate and may accept it or substitute a different amount for 
purposes of calculating the initial allocation. Regardless of the basis 
for the estimate, the Bureau may determine, based on its reasonableness 
review of an estimated cost form and any submitted documentation, that 
a station or MVPD should receive a different allocation from that 
claimed on the form.
    440. Initial Allocation Stage. Once the Media Bureau completes its 
review, it will issue an initial allocation from the Reimbursement Fund 
to the broadcaster or MVPD, which will be available to the entity to 
draw down as expenses are incurred. The issuance of an initial 
allocation from the Reimbursement Fund based on these estimates does 
not create an obligation on the part of the Commission to pay the 
entity's total estimated or actual relocation costs. Subject to timing 
constraints on allocations from the Fund that are discussed below, the 
Commission intends to issue NCE broadcasters initial allocations 
equivalent to up to 90 percent of their estimated costs eligible for 
reimbursement, and all other broadcasters and MVPDs initial allocations 
equivalent to up to 80 percent of their estimated costs eligible for 
reimbursement. The Commission will issue initial allocations to NCEs 
equivalent to a higher percentage of their estimated costs due to their 
unique funding constraints. For other broadcasters and MVPDs, a 
slightly smaller initial allocation will be sufficient to permit them 
to fund construction or other reimbursable costs until a subsequent 
allocation phase, when all stations and MVPDs can request an additional 
allocation from the Reimbursement Fund if necessary to cover the 
remainder of their costs eligible for reimbursement. It is appropriate 
to withhold at least 10 percent (for NCEs) or at least 20 percent (for 
other stations and for MVPDs) of estimated costs until a subsequent 
allocation phase. The Commission concludes that this approach should 
ensure that broadcasters and MVPDs do not face an undue financial 
burden while also reducing the possibility that the Commission allocate 
more funds than necessary to cover actual relocation expenses.
    441. The amount available to be issued as initial allocations will 
depend, in part, on the total amount of repacking expenses reported on 
the estimated cost forms. In addition, the timing of initial 
allocations will depend on when money in the Reimbursement Fund becomes 
legally available for obligation to eligible entities. The Spectrum Act 
authorizes the Commission to borrow up to $1 billion from the U.S. 
Treasury, upon the effectiveness of any reassignments or reallocations 
under Section 6403(b)(1)(B), to use toward reimbursement of relocation 
expenses, but the Commission must reimburse the Treasury for any 
amounts borrowed as funds are deposited into the Reimbursement Fund 
from forward auction proceeds. Thus, the amount available for initial 
allocations from the Reimbursement Fund may be limited initially to $1 
billion. The remainder of the $1.75 billion will not be legally 
available for allocation until at least some wireless licenses have 
been granted to forward auction winners and sufficient forward auction 
proceeds are deposited into the Reimbursement Fund. If necessary, the 
initial allocations of funds to broadcasters and MVPDs will be made in 
tranches as funds become legally available.
    442. Final Allocation Stage. Upon completing construction or other 
changes that are eligible for reimbursement, or by a specific deadline 
prior to the end of the of the Reimbursement Period to be announced by 
the Media Bureau, whichever is earlier, all stations and MVPDs that 
received an initial allocation from the Reimbursement Fund must provide 
the Commission with information and documentation regarding their 
actual expenses incurred, plus any remaining estimated expenses for 
entities that have not yet completed their transition. After reviewing 
this information, the Media Bureau will determine whether the 
broadcaster or MVPD incurred or will incur eligible relocation costs 
that are not covered by the initial allocations from the Reimbursement 
Fund and issue a final allocation, if appropriate, to the broadcaster 
or MVPD. If any allocated funds remain in an entity's Treasury account 
in excess of the entity's actual costs determined to be eligible for 
reimbursement, those funds will revert back to the Reimbursement

[[Page 48500]]

Fund. The Media Bureau will provide additional details on the filing 
and process requirements, including filing deadlines, for this final 
allocation stage in a subsequent public notice.
    443. Final Accounting Stage. Any entities that have not completed 
their transition by the deadline announced by the Media Bureau during 
the final allocation stage must submit their final expense 
documentation to the Commission shortly after completing their 
transition and regardless of whether this occurs after the 
Reimbursement Period. This documentation will contain actual costs for 
all eligible expenses and will serve as a final accounting of all 
actual expenses incurred to complete the transition. The Media Bureau 
will provide additional details on the filing and process requirements, 
including filing deadlines, for this final accounting stage in a 
subsequent public notice.
    444. Reimbursement Contractor and Delegation of Authority. The 
Commission directs the Media Bureau to engage a contractor to assist in 
the reimbursement process and administration of the Reimbursement Fund. 
The Commission notes that commenters who address the issue of whether 
it should hire a third-party to assist with administering 
reimbursements generally are supportive, so long as administrative 
costs are carefully controlled. The Commission concludes that the costs 
associated with administering the Reimbursement Fund are appropriately 
included in the Commission's overall costs to ``mak[e] any 
reassignments or reallocations'' under Section 6403(b)(1)(B). 
Accordingly, administrative costs will not be deducted from the 
Reimbursement Fund. The Commission delegates authority to the Media 
Bureau to engage a third-party contractor to assist in the 
reimbursement process, which will be overseen by the Bureau.
    445. The Commission also delegates authority to the Media Bureau to 
create one or more forms to be used by entities to claim reimbursement 
from the Reimbursement Fund, as well as to report on entities' use of 
money disbursed from the Fund and the status of their construction 
efforts, and for any other Reimbursement Fund-related purposes. The 
Commission also delegates authority to the Media Bureau to establish 
the timing and calculate the amount of the allocations to eligible 
entities from the Reimbursement Fund, develop a final Catalog of 
Eligible Expenses, and make other determinations regarding eligible 
costs and the reimbursement process. Finally, the Commission delegates 
authority to the Media Bureau to adopt the necessary policies and 
procedures relating to allocations, draw downs, payments, obligations, 
and expenditures of money from the Reimbursement Fund in order to 
protect against waste, fraud, and abuse and in the event of bankruptcy. 
Given the importance of maintaining the integrity of the Fund, the 
Media Bureau will consult with the Office of General Counsel and the 
Office of the Managing Director in acting pursuant to this delegation.
c. Expenses Eligible for Reimbursement
    446. The Commission cannot, at this juncture, forecast all types of 
reasonable expenses. The appropriate scope of ``costs reasonably 
incurred'' necessarily will have to be decided on a case-by-case basis. 
Moreover, as discussed above, the Commission delegates authority to the 
Media Bureau to make reimbursement determinations and to finalize the 
Catalog of Eligible Expenses. All claimed expenses are subject to 
review by the Media Bureau to ensure that each expense is reasonable.
    447. Costs Reasonably Incurred. The Commission interprets the 
Spectrum Act's mandate to reimburse ``costs reasonably incurred'' to 
require that the Commission reimburse costs that are reasonable to 
provide facilities comparable to those that a broadcaster or MVPD had 
prior to the auction that are reasonably replaced or modified following 
the auction, as a result of the repacking process, in order to allow 
the broadcaster to operate on a new channel or to allow the MVPD to 
carry the signal of a broadcaster on a new channel. The Commission will 
permit broadcasters and MVPDs to be compensated for both ``hard'' 
expenses, such as new equipment and tower rigging, and ``soft'' 
expenses, including legal and engineering services. The Commission will 
allow reimbursement for modification or replacement of facilities on 
the post-auction channel consistent with the technical parameters 
identified in the Channel Reassignment PN. Specifically, the Commission 
will permit broadcasters to be reimbursed for eligible costs reasonably 
incurred in constructing transmission facilities for channels assigned 
in the repacking process if such facilities do not extend the coverage 
area by more than one percent in any direction based on the technical 
parameters for the channel assignment specified in the Channel 
Reassignment PN. The Commission reserves the right to require 
broadcasters to take reasonable steps to mitigate costs and share 
resources where possible, as such efforts may save overall 
Reimbursement Fund resources or contribute to more efficient use of the 
broadcast spectrum. The standard the Commission adopts, which ties 
reimbursement to facilities comparable to those in use prior to the 
auction, will ensure that entities can continue to operate facilities 
post-auction that are similar to those in operation pre-auction. For 
example, a full power or Class A station presently using distributed 
transmission system (DTS) technology will be eligible for reimbursement 
for a DTS. A DTV DTS employs multiple synchronized transmitters spread 
around a station's service area, rather than a single transmitter.
    448. Equipment Upgrades. As a general matter, the Commission 
expects stations and MVPDs to obtain the lowest-cost equipment that 
most closely replaces their existing equipment. The Commission does not 
anticipate providing reimbursement for optional features beyond those 
already present. However, the Commission also expects that some 
stations and MVPDs will not be able to replace older, legacy equipment 
with equipment that is comparable in terms of functionality and cost 
because of advances in technology and because manufacturers often cease 
supporting old equipment when newer products become available. If the 
cost to replace certain equipment is reasonably incurred as a result of 
the repacking process, the Commission intends to reimburse for the cost 
of that equipment and recognize that this equipment necessarily may 
include improved functionality. The Commission does not, however, 
anticipate providing reimbursement for new, optional features in 
equipment unless the station or MVPD documents that the feature is 
already present in the equipment that is being replaced. For example, a 
station whose current antenna or other facilities contain components 
enabling the transmission of ATSC Mobile/Handheld signals and that 
reasonably incurs the cost to replace this equipment may claim 
reimbursement for replacement equipment with mobile capability. A 
station that does not have mobile capability, however, may not claim 
reimbursement for the cost of adding that capability in its replacement 
equipment. Eligible stations and MVPDs may elect to purchase optional 
equipment capability or make other upgrades at their own cost, but only 
the cost of the equipment without optional upgrades is a reimbursable 
expense.
    449. Alternate Channels and Expanded Facilities. The Commission

[[Page 48501]]

will reimburse costs associated with requests for an alternate channel 
assignment or expanded facilities for eligible stations that receive 
priority processing, as described below. Such stations will be able to 
apply for, and receive reimbursement for eligible costs associated with 
constructing alternate channels or expanded facilities modifications. 
In the case of priority stations, such costs are ``reasonably incurred 
. . . in order for the licensee to relocate its television service'' to 
another channel because, absent construction of the alternate channel 
or expanded facility, such stations will be unable to relocate their 
service. Stations that apply for priority processing will not be 
required to file an estimated cost form within three months after the 
release of the Channel Reassignment PN, as other stations eligible for 
reimbursement must do. Instead, they must file an estimated cost form 
within 30 days of receiving a construction permit for an alternate 
channel or expanded facilities, as set forth in the Alternate Channels 
and Expanded Facilities Opportunities Section.
    450. The Commission will not provide additional reimbursement to 
other, non-priority stations that apply for an alternate channel or 
expanded facilities; the Commission will reimburse these stations only 
for the eligible costs of relocating to the channel and facilities 
specified in the Channel Reassignment PN. In the case of non-priority 
stations, costs related to alternate channels or expanded facilities 
are not ``reasonably incurred . . . in order for the licensee to 
relocate its television service'' to another channel. Such stations 
will be able to continue to serve their coverage area and population 
served on the channel and pursuant to the technical parameters assigned 
in the repacking process without having to rely on an alternate channel 
or expanded facilities. For example, non-priority stations that wish to 
move to an alternate channel or to construct expanded facilities may 
incur certain costs twice during the post-auction transition process, 
such as the cost of completing an engineering study or preparation of a 
Form 301; however, the Commission will reimburse such duplicative costs 
only once. Even if they intend to apply for alternate channels or 
expanded facilities, these stations will be required to file an 
estimated cost form based on the facility specified in the Channel 
Reassignment PN three months after the release of the PN. Stations will 
receive up to 80 or 90 percent (depending on the type of station) of 
their estimated expenses. Ultimately, these stations will be required 
to make a showing that any costs for which they are seeking 
reimbursement are not greater than those they would have incurred if 
they had constructed the facility originally assigned. If a station can 
show that it would have incurred a particular cost regardless of the 
facility being constructed, and the Media Bureau determines that the 
cost is ``reasonably incurred,'' the cost will be eligible for 
reimbursement.
    451. Interim Facilities. Stations that are assigned a new channel 
in the repacking process may need to use interim facilities to avoid 
prolonged periods off the air during the transition. The use of interim 
facilities may be appropriate in the following situations, among 
others: (1) A station may need an additional transmitter or antenna for 
interim use on either its pre- or post- auction channel; (2) a station 
with a top mounted antenna may need to run a side mounted antenna; (3) 
a station with an antenna at ``X'' feet on a tower may need to operate 
at ``Y'' feet temporarily; (4) a station may need to operate with an 
antenna mounted on a different tower while it finishes mounting final 
facilities on its current tower or a new tower; (5) a station may need 
to operate on a different channel with different facilities than its 
final channel or facilities; or (6) a station may need to use its 
auxiliary or back-up facility as its main facility while it finishes 
final facilities. Some stations currently have licensed auxiliary 
facilities or own backup equipment that may be used for interim 
operations post-auction, while others may need to purchase or rent 
equipment or facilities. The Commission will treat interim facilities 
as a relocation expense eligible for reimbursement and will reimburse 
costs for such facilities that are reasonably incurred in order for a 
station to meet its construction deadline or to avoid prolonged periods 
off the air while repacking changes are made. This includes 
reimbursement for costs reasonably incurred by stations that receive 
permission to operate, on an interim basis, on a channel relinquished 
by a winning reverse auction bidder. The Commission will also reimburse 
for the costs to replace or modify existing interim facilities where 
such costs are reasonably incurred to accommodate a new channel 
assignment.
    452. Non-Recurring Signal Delivery Costs. The Commission also 
provides guidance on reimbursement for the cost of establishing 
delivery of a good quality signal to an MVPD in cases where signal 
delivery is affected by post-auction channel changes. Under its rules, 
whether an MVPD or broadcast station is responsible for the initial and 
ongoing cost of delivering a good quality broadcast signal to a cable 
headend or a satellite receive facility depends on whether the station 
is carried pursuant to must-carry requirements or a retransmission 
consent agreement. As a general matter, winning bidders are not 
eligible for reimbursement of their transition expenses, including any 
costs they incur to deliver their signal to an MVPD. However, as stated 
above, MVPDs will be eligible for reimbursement of their reasonably 
incurred costs in order to continue to carry broadcast stations that 
are reassigned as a result of the auction. Reimbursable MVPD expenses 
include the reasonable costs to set up delivery of a signal that the 
MVPD is required to carry under its must-carry rules or by 
retransmission consent contracts, regardless of whether the station is 
a winning bidder or is involuntarily reassigned to a new channel in the 
repacking process.
    453. Specifically, if a station is carried pursuant to must-carry 
requirements, it is required to bear delivery costs and, if it is 
involuntarily reassigned to a new channel, will be eligible for 
reimbursement of any non-recurring costs to set up delivery to the 
cable headend or satellite receive facility that is comparable to the 
delivery method used prior to the transition. If an MVPD carries a 
station pursuant to its must-carry rules, the MVPD will be eligible for 
reimbursement for any non-recurring costs associated with setting up 
delivery of the station's signal from the headend or receive facility 
to its subscribers, because MVPDs may reasonably incur such costs in 
order to continue to carry stations relocating as a result of a winning 
reverse auction bid. If a station is carried pursuant to a 
retransmission consent agreement, the issue of which party is 
responsible for delivery costs likely will be governed by the relevant 
contract. If, under the contract, the MVPD is responsible, it will be 
eligible for reimbursement of the non-recurring costs to set up 
delivery. If, under the contract, the broadcast station is responsible 
for delivery costs, it will be eligible for reimbursement of the non-
recurring cost to set up delivery to the headend or receive facility if 
it was reassigned involuntarily. Further, the MVPD will be eligible for 
reimbursement of any non-recurring costs associated with setting up 
delivery of the signal from the headend or receive facility to its 
subscribers.
    454. Lost Revenues. As discussed above, the Spectrum Act prohibits 
reimbursement for ``lost revenues.'' The

[[Page 48502]]

Commission defines ``lost revenues'' for purposes of reimbursement to 
include revenues that a station or MVPD loses as a direct or ancillary 
result of the reverse auction or the repacking process. For example, 
the Commission will not reimburse a station's loss of advertising 
revenues while it is off the air implementing a channel change 
resulting from the repacking process. In addition, the Commission will 
not reimburse any refunds a station is required to make for payments 
for airtime as a result of being off the air in order to implement a 
channel change. The Commission notes that stations can plan in advance 
for or mitigate the effects of temporary interruptions in service by, 
for example, alerting advertisers beforehand, declining to accept 
advance payments for airtime during relevant post-auction periods, and 
offering make-ups after the station returns to the air in lieu of 
refunds of advance payments. Similarly, with respect to MVPDs, the 
Commission will not provide reimbursement for lost advertising revenues 
or subscriber fees for any period of time a television station carried 
by the MVPD is off the air because of channel changes resulting from 
the reverse auction or repacking process.
d. Measures To Prevent Waste, Fraud, and Abuse
    455. The Commission takes several additional actions to prevent 
waste, fraud, and abuse with respect to the Reimbursement Fund. The 
Commission adopts requirements for entities seeking reimbursement to 
provide a justification when their estimated costs exceed predetermined 
cost estimates. The Commission also requires entities to document their 
actual expenses and will conduct audits of, data validations for, and 
site visits to entities that receive disbursements from the 
Reimbursement Fund. In addition, to ensure transparency with respect to 
the Reimbursement Fund, the Commission will make available to the 
public estimated and actual cost information, as well as information 
regarding Reimbursement Fund disbursements. These measures accommodate 
the need to reimburse eligible broadcasters and MVPDs promptly, to 
impose rigorous accountability requirements, and to ensure transparency 
regarding the amount of money disbursed to eligible entities.
    456. Documentation Requirements. The Commission establishes several 
requirements to ensure that disbursements based on estimated costs do 
not exceed actual costs. As discussed above, eligible broadcasters and 
MVPDs will be required to submit an estimated cost form and all actual 
cost information in order to receive any allocations from the 
Reimbursement Fund. These forms will include certifications that must 
be made by an owner or officer of the company under penalty of perjury 
under 18 U.S.C. 1001 in order to ensure that money from the 
Reimbursement Fund will be used only for eligible costs.
    457. The Commission also requires eligible entities to submit 
detailed records documenting their actual costs, including all relevant 
invoices and receipts. In addition, the Commission requires 
broadcasters and MVPDs to submit progress reports, on a regular basis, 
to show how the disbursed money has been spent and what portion of 
their construction is complete. Further, the Commission adopts a 
document retention requirement for any entity seeking reimbursement. 
Although records of expenditures will have been submitted as a 
condition of receiving reimbursement, each entity must retain all 
relevant documents (e.g., records documenting the type of equipment a 
reassigned broadcaster replaced with new equipment) for a period ending 
10 years after the date it receives its final payment from the 
Reimbursement Fund.
    458. Audits, Data Validations, and Site Visits. The Commission 
concludes that audits, data validations, and site visits are essential 
tools in preventing waste, fraud, and abuse, and that use of these 
measures will maximize the amount of money available for reimbursement. 
Accordingly, the Commission, or a third-party audit firm on behalf of 
the Commission, may conduct audits of entities receiving disbursements 
from the Reimbursement Fund, and these audits may occur both during and 
following the three-year Reimbursement Period. Entities receiving money 
from the Reimbursement Fund must make available all relevant 
documentation upon request from the Commission or its contractor.
    459. In addition to audits, the Commission prescribes data 
validations, which can be a more efficient way of verifying the 
accuracy of a disbursement. Data validations will allow the Media 
Bureau to ensure quickly the validity of specific claims on an entity's 
cost form so as to adequately protect the Reimbursement Fund while not 
inhibiting an entity's construction process. The Bureau can select 
specific claims for validation, and then a broadcaster or MVPD will be 
required to provide additional documentation or explanation to verify 
its claim for a particular type of equipment or service before it can 
be reimbursed for it. The Bureau or an authorized contractor also may 
conduct site visits to confirm that equipment paid for from the 
Reimbursement Fund has been deployed. Although the statutory 
reimbursement period is limited to three years, the Commission expects 
that the Media Bureau or a third-party auditor will continue to 
validate expenses after that period ends and, where appropriate, 
recover any money that should be returned, consistent with the 
Commission's obligation to recover improper payments. If any of these 
investigatory measures reveals evidence of intentional fraud, the 
Commission will refer the matter to its Inspector General's office or 
to law enforcement for criminal investigation, as appropriate.
e. Service Rule Waiver in Lieu of Reimbursement
    460. The Commission concludes that broadcasters seeking to take 
advantage Section 6403(b)(4)(B) may submit a request for a waiver of 
any of its service rules, including a request to use a transmission 
technology other than the ATSC standard. This interpretation is 
supported by the language of Section 6403(b)(4)(B), which does not make 
reference to any specific service rules eligible for a waiver, instead 
referencing them generally.
    461. The Commission delegates authority to the Media Bureau to 
evaluate and act on these service rule waiver requests on a case-by-
case basis. The Commission directs the Bureau to apply its general 
waiver standard when considering such requests. The Media Bureau should 
consider the applicant's agreement to forego relocation costs as one 
factor weighing in favor of a waiver grant. The Commission also directs 
the Bureau to ensure that the applicant will protect against 
interference and provide at least one broadcast television program 
stream at no charge to the public, as required by Section 
6403(b)(4)(B). The Commission notes that it has previously provided 
guidance on what constitutes ``broadcasting,'' although it does not 
foreclose alternative showings demonstrating compliance with the 
Section 6403(b)(4)(B) requirement that the waiver recipient will 
``provide[ ] at least 1 broadcast television program stream on such 
spectrum at no charge to the public.'' See 47 U.S.C. 153(6); In re 
Subscription Video, 2 FCC Rcd 1001, 1006, para. 41 (1987). Delegating 
discretion to the Media Bureau to evaluate and act on waiver requests 
in accordance with these parameters is in line with the discretion 
afforded under

[[Page 48503]]

Section 6403(b)(4)(B) to grant waivers ``as [the Commission] considers 
appropriate.''
    462. The Commission declines to grant waivers solely upon request 
without further analysis, as is advocated by some commenters. In 
evaluating a waiver request, the Media Bureau will need to determine 
whether the request meets the Commission's general waiver standard and 
complies with the statutory requirements pertaining to interference 
protection and the provision of one broadcast television program stream 
at no charge to the public. This will require a case-specific analysis 
of each waiver request and makes commenters' suggested approach 
unworkable.
    463. The Commission also declines to permit stations that are not 
eligible for reimbursement to operate pursuant to a service rule waiver 
under Section 6403(b)(4)(B). Section 6403(b)(4)(B) expressly limits the 
availability of waivers to stations that request them in lieu of 
reimbursement of relocation costs. As discussed in this Order and under 
the plain reading of the Spectrum Act, only full power and Class A 
television stations assigned new channels in the repacking process, 
pursuant to Section 6403(b)(1)(B)(i), are eligible for reimbursement 
under Section 6403(b)(4)(A). Therefore, permitting a licensee to 
receive a service rule even if the station is not reassigned to a new 
channel in the repacking process, as advocated by some commenters, is 
both inconsistent with and outside the scope of the Spectrum Act. The 
Commission's decision, however, does not foreclose broadcasters from 
seeking waiver of its rules for stations that are not assigned new 
channels in the repacking process under its general waiver authority. 
For example, the Media Bureau has granted requests by several broadcast 
television licensees for authority to operate experimental digital 
facilities in order to evaluate the performance of non-ATSC 
transmission standards. Nothing in this Order is intended to modify the 
scope of these experimental authorizations or exclude these licensees, 
if otherwise eligible, from seeking a waiver under Section 
6403(b)(4)(B)). Accordingly, only full power and Class A stations that 
are assigned new channels in the repacking process, and consequently 
are eligible for reimbursement, will be permitted to operate pursuant 
to a waiver granted under Section 6403(b)(4)(B). A full power or Class 
A station in a channel sharing arrangement may apply for a waiver under 
Section 6403(b)(4)(B) in cases where the sharer station has been 
assigned a new channel in the repacking process and is therefore 
eligible for reimbursement. The Commission adopts its proposal in the 
NPRM to require each licensee that is subject to a channel sharing 
arrangement and operates pursuant to a service rule waiver under 
Section 6403(b)(4)(B) to provide one broadcast television program 
stream at no charge to the public.
    464. The Media Bureau will accept waiver requests filed pursuant to 
Section 6403(b)(4)(B) during a 30 day window commencing upon the date 
that the Channel Reassignment PN is released. Licensees may request 
that a waiver be granted on either a temporary or a permanent basis. A 
licensee will have 10 days following the grant of a waiver by the Media 
Bureau to notify the Media Bureau whether it accepts the terms of the 
waiver.
    465. A licensee that is granted and accepts the terms of a waiver 
under Section 6403(b)(4)(B) will not qualify for reimbursement, 
regardless of the duration of the waiver. Once a licensee accepts the 
terms of its waiver under Section 6403(b)(4)(B), a licensee will not 
later become eligible for reimbursement if its waiver no longer is 
effective because, for example, it expires, it is canceled for failure 
to comply with any terms or conditions of waiver, or the licensee 
voluntarily chooses to broadcast in accordance with current Commission 
rules. However, licensees are required to meet all requirements for 
obtaining reimbursement established by the Commission, such as filing a 
timely estimated cost form, until they are granted and accept the terms 
of their waiver. Compliance with such reimbursement-related 
requirements is necessary to ensure timely reimbursement in the event a 
station's waiver request is denied or the station declines to accept 
the terms of a waiver grant. If a waiver request is granted and the 
station accepts the terms of the grant, the station will no longer be 
subject to reimbursement-related requirements. Furthermore, unless 
otherwise instructed by the Media Bureau, licensees that are granted 
and accept the terms of a waiver under Section 6403(b)(4)(B) or 
licensees with a pending waiver application must comply with all filing 
and notification requirements, construction schedules, and other post-
auction deadlines, established in this Order.
f. Other Reimbursement Issues
    466. Reimbursement Limit. The Commission disagrees with commenters 
who argue that the $1.75 billion Reimbursement Fund serves as a limit 
on the Commission's repacking authority. While the Commission's goal in 
administering the Reimbursement Fund will be to reimburse all eligible 
costs reasonably incurred, the statute on its face does not condition 
the Commission's repacking authority on its ability to do so. Rather, 
Section 6403(b)(4)(A) requires only that the Commission ``reimburse 
costs reasonably incurred'' by eligible broadcasters and MVPDs ``from 
amounts available'' in the Fund. By contrast, Congress authorized 
reimbursement of the relocation costs of channel 37 incumbent users 
``provided that all such users can be relocated and that the total 
relocation costs of such users do not exceed $300,000,000.'' Congress's 
determination not to similarly tie reimbursement of broadcaster 
relocation costs to the total amount of those costs supports its 
reading of Section 6403(b)(4)(A). Congress explicitly placed other 
financial conditions on the Commission in the Spectrum Act as well, 
such as establishing a minimum proceeds requirement for the forward 
auction. Congress did not, however, require that that the forward 
auction proceeds be sufficient to cover the total relocation costs that 
might be eligible for reimbursement. On the contrary, it required that 
such proceeds be sufficient to cover, inter alia, ``the estimated costs 
for which the Commission is required to make reimbursements under 
subsection (b)(4)(A).'' (Spectrum Act Section 6403(c)(2)(B)(iii). See, 
e.g., Wolverine Power Co. v. FERC, 963 F.2d 446, 451 (D.C. Cir. 2010) 
(``Congress knew how to draft an enforcement provision applicable to a 
`licensee' but not a `person.' Accordingly, we believe that, in 
enacting section 31(c), Congress meant what it said.'')). As noted 
below, however, the Commission has no reason to believe that $1.75 
billion will be insufficient to cover broadcasters' total relocation 
costs. The Commission will seek to minimize repacking costs, and stay 
within the $1.75 billion Congress provided, by optimizing channel 
assignments at the conclusion of the auction.
    467. The Commission also rejects assertions that the reverse 
auction will not be ``voluntary'' within the meaning of the statute if 
broadcasters might incur out-of-pocket relocation costs. As directed by 
the Spectrum Act, incentive auction participation for broadcasters will 
be ``voluntary.'' Spectrum Act Section 6403(a). However, the Spectrum 
Act also grants the Commission broad authority to reorganize the 
broadcast television spectrum in order to carry out the incentive 
auction, subject to the ``all

[[Page 48504]]

reasonable efforts'' mandate. Spectrum Act Section 6403. Participation 
in repacking is not voluntary; to the contrary, the Spectrum Act 
expressly precludes broadcasters from exercising rights that would 
otherwise be available to them under Section 316 to ``protest'' license 
modifications made pursuant to Section 6403(b). Spectrum Act Section 
6403(h). As discussed above, the Commission does not interpret the 
Spectrum Act to insulate broadcasters from any and all uncertainty in 
the repacking process in derogation of the statute's other objectives. 
Likewise, the Commission does not interpret the statute to require it 
to insulate broadcasters from the mere possibility of out-of-pocket 
expenses in order to ensure that their choice of whether or not to 
participate in the reverse auction is voluntary. Nor is there any 
evidence in the record to suggest that such a possibility would have a 
coercive effect.
    468. The Commission also concludes that conditioning the closing of 
the auction on the sufficiency of the Reimbursement Fund to cover all 
reimbursable relocation costs or delaying the closing of the auction 
until the Fund is determined to be sufficient to cover all such costs 
would jeopardize other objectives in the Spectrum Act. As set forth 
above, the repacking approach the Commission adopts provides speed and 
certainty by finalizing the channel assignment for each station that 
will remain on the air only after the final stage rule is satisfied and 
bidding stops (but before the incentive auction concludes). By imposing 
another constraint on repacking that is not authorized by the statute, 
NAB's proposed ``hold-harmless'' policy would impinge on the speed and 
certainty required for successful implementation of the incentive 
auction and would prevent an efficient final channel assignment scheme. 
In addition, contrary to some commenters' arguments, the Commission 
cannot provide additional funding in order to guarantee that all 
broadcasters are fully reimbursed. Section 6402 of the Spectrum Act 
expressly provides for a deposit of no more than $1.75 billion into the 
Reimbursement Fund. Providing additional funding would be contrary to 
the express language of the Spectrum Act.
    469. In addition, it will not be possible for the Commission to 
estimate the precise amount of relocation costs until all eligible 
broadcasters and MVPDs submit their individual estimates three months 
after the Channel Reassignment PN is issued. Before that, the 
Commission will not know which reassigned stations will have to replace 
equipment rather than reusing it, or to what extent MVPDs will incur 
expenses associated with fulfilling the carriage rights of reassigned 
broadcasters. Nor will there be any basis to estimate the number of 
stations that will forego cost reimbursement by taking advantage of the 
flexible use waiver option under Section 6403(b)(4)(B) of the Spectrum 
Act.
    470. The Commission emphasizes that it has no reason, at this time, 
to believe that the Fund will be insufficient to cover all eligible 
relocation costs. Moreover, the Commission plans to take appropriate 
measures to disburse funds from the Reimbursement Fund as fairly and 
efficiently as possible. As indicated above, after the final stage rule 
is satisfied and the bidding stops, the Commission intends to optimize 
the final broadcast channel assignments to minimize relocation costs. 
The Commission also notes that reassigned broadcasters will have the 
opportunity, post-optimization, to seek an alternate channel in the 
interest of minimizing relocation costs. The Commission has discussed 
at length above the various measures it adopts to ensure that the 
Reimbursement Fund is used as efficiently as possible, and addresses 
below cost mitigation measures that also may help to reduce demands on 
the Reimbursement Fund. If future developments suggest that $1.75 
billion will be insufficient to cover all eligible costs, the 
Commission delegates authority to the Media Bureau to develop a 
prioritization scheme for reimbursement claims.
    471. Equipment Repurposing. All entities seeking reimbursement from 
the Reimbursement Fund should reuse their own equipment, to the extent 
possible, rather than obtaining new equipment paid for by the 
Reimbursement Fund. To the extent eligible broadcasters and MVPDs seek 
reimbursement for new equipment, they must provide a justification when 
submitting their estimated cost form as to why it is reasonable under 
the circumstances to purchase new equipment rather than modify their 
corresponding current equipment in order to change channels or to 
continue to carry the signal of a broadcaster that changes channels. 
The Commission also encourages winning reverse auction bidders to 
repurpose their equipment to the extent possible. In addition, the 
Commission encourages reassigned broadcasters to seek out previously 
used equipment no longer needed by other stations, and to make any 
equipment that is no longer needed available for use by another entity.
    472. Unlike the DTV transition, in which there was little demand 
for used analog equipment, following the incentive auction broadcasters 
could obtain used digital equipment, either on the secondary market or 
through an equipment swap, that is significantly less expensive than 
new equipment. In addition to cost savings, repurposing equipment could 
help address any potential equipment shortages. A reassigned 
broadcaster that cannot retune its transmitter to accommodate its new 
channel position may be able, for example, to sell the transmitter 
directly to another broadcaster or to an entity that purchases used 
equipment for resale. A broadcaster also may be able to purchase a 
previously used transmitter that works on its newly assigned channel. 
In addition, broadcasters in the same geographic region may consider 
swapping equipment that is no longer needed or usable on their newly 
assigned channels. The Commission recognizes that there may be 
significant costs associated with transporting used equipment and that 
cost savings may be achievable only if appropriate used equipment is 
available locally. The Commission encourages broadcasters and MVPDs 
that cannot sell or swap unneeded equipment to consider donating it to 
an educational institution or other charitable organization. As 
described above, the Commission will use site visits to validate that 
entities that received reimbursement for purchasing new equipment 
actually have deployed that new equipment.
    473. Equipment Sharing. The Commission encourages broadcasters to 
consider ways in which they may save expenses by sharing equipment. For 
example, it may be possible for broadcasters to share an antenna or 
other facilities in a manner that reduces the participating stations' 
overall relocation costs or contributes to more efficient use of the 
broadcast spectrum. In particular, the Commission encourages 
broadcasters to consider whether joint use of a broadband antenna would 
be possible and would represent an overall cost savings as compared to 
the purchase of separate antennas for each of the participating 
stations.
    474. Bulk Purchasing. At this time, the Commission declines to 
arrange for the bulk purchase of equipment or services or to oversee 
any such effort. The record does not provide clear information 
regarding whether bulk purchasing would provide substantial benefits, 
in part because certain equipment, such as antennas, must be 
specialized for particular channels, locations, and coverage areas and 
because many broadcasters have

[[Page 48505]]

existing relationships with equipment vendors. It may be useful for 
broadcasters and MVPDs to consider whether these kinds of arrangements 
could generate cost savings and result in more efficient use of the 
$1.75 billion Reimbursement Fund.

D. Transition Procedures for Other Services and Unlicensed Operations

1. LPTV and TV Translator Stations
    475. The Commission modified its displacement rules with respect to 
operating LPTV and TV translator stations that are displaced as a 
result of the incentive auction or the repacking process. After the 
release of the Channel Reassignment PN and after eligible full power 
and Class A television stations have an opportunity to file 
construction permit applications for their new facilities, including an 
alternate channel or an expanded facility, the Media Bureau will 
announce a limited window for operating LPTV and TV translator stations 
to submit displacement applications. This filing window will be open 
only to operating stations that (1) are displaced by a full power or 
Class A television station as a result of the incentive auction or the 
repacking process, (2) will cause interference to or receive 
interference from frequencies repurposed for new, flexible use by a 600 
MHz Band wireless licensee, or (3) are licensed on frequencies that 
will serve as part of the 600 MHz Band guard bands. The Commission 
delegated authority to the Media Bureau to announce the terms of the 
limited displacement window consistent with the approach outlined 
above.
    476. The Commission rejected calls to allow displacement relief 
applications to be filed at any time without requiring stations to wait 
for a window finding that accepting displacement applications during a 
limited window will ensure that all affected stations are given an 
equal opportunity to obtain a new channel and will avoid the ``race to 
the courthouse'' that occurs with first-come, first-served filing 
opportunities.
    477. The Commission found that the public interest would be served 
by allowing LPTV and TV translator stations with mutually exclusive 
displacement applications to explore engineering solutions or agree on 
a settlement to resolve the mutual exclusivity. The Commission 
delegates authority to the Media Bureau to announce the terms of the 
engineering solution or settlement opportunity that will be provided to 
mutually exclusive displacement applications filed by LPTV or TV 
translator stations as a result of the auction or repacking process, 
consistent with the Commission's existing rules, including the monetary 
limits on settlement payments and reporting requirements. This approach 
will expedite the displacement process and prevent processing delays 
that could result in stations having to go silent. Should no resolution 
of mutually exclusive applications occur through an engineering 
solution or settlement, the Commission grants a selection priority to 
the licensees of any displaced DRTs. This means that the DRT 
displacement application will be processed first and, if granted, will 
result in the dismissal of all pending displacement applications that 
are mutually exclusive with it. The Commission concludes that DRT 
displacement applications should be given priority over mutually 
exclusive displacement applications filed for LPTV and other TV 
translator stations in order to help preserve the existing services of 
full power stations. Should two or more stations remain mutually 
exclusive after the application of the selection priority, the 
Commission will use an auction as a last resort to resolve remaining 
displacement groups.
    478. The Commission rejected a proposal to grant a selection 
priority to the displacement applications filed by TV translator 
stations that are operating on an NCE basis and are eligible to receive 
a community service grant from the Corporation for Public Broadcasting 
finding that many LPTV stations and other TV translator stations also 
have important public service missions, and there was not evidence that 
Congress intended for CPB-Qualified TV translators to receive 
preferential treatment over other low power stations. Further, stations 
are permitted to change their designation from ``low power television'' 
to ``translator'' without prior Commission approval; thus, stations 
could change their designation to gain the selection priority if the 
Commission granted the proposal.
    479. In addition, the Commission declined to adopt the proposal in 
the NPRM to provide a selection priority to displacement applications 
filed by stations that offer the only local, over-the-air television 
service in their market and the proposal made by some commenters to 
prioritize stations that provide network service to their community. 
The Commission's longstanding policy has been to avoid involvement in 
the format and other content choices of licensees based on First 
Amendment concerns, and the Commission concluded that adoption of these 
proposals would be inconsistent with that policy.
    480. The Commission announced that it intended to initiate the a 
rulemaking proceeding (the LPTV/TV Translator Proceeding) shortly after 
the release of the Report and Order to consider additional measures 
that may help alleviate the consequences of LPTV and TV translator 
station displacements resulting from the incentive auction and the 
repacking process, and that it intended to issue a Report and Order 
prior to the commencement of the incentive auction. First, the LPTV/TV 
Translator Proceeding will consider whether to modify the current 
September 1, 2015 deadline for LPTV stations to convert to digital 
service. Second, the LPTV/TV Translator Proceeding will consider 
whether to permit LPTV and TV translator stations to participate in 
channel sharing arrangements after the conclusion of the reverse 
auction. Third, the Commission will consider in the LPTV/TV Translator 
Proceeding whether to create a new digital replacement translator 
service for stations that experience losses in their pre-auction 
service areas. Fourth, the Commission will explore ways of maximizing 
the number of channels available to LPTV and TV translator stations in 
the remaining television bands. Finally, the Commission will invite 
input on any other measures it should consider to further mitigate the 
impact of the auction and repacking process on low power stations.
    481. The Commission declined to adopt several other proposals 
finding that these proposals either are not feasible at this time or 
would conflict with the other goals of the incentive auction. The 
Commission rejected the proposal to set aside channels 2-4 for the 
exclusive use of LPTV or TV translator stations finding that such a 
set-aside would eliminate available channels that otherwise could be 
assigned to full power and Class A stations and would require 
relocating a number of full power and Class A stations to different 
channels and would also be inconsistent with the goal to allow market 
forces to determine the highest and best use of spectrum. The 
Commission also rejected a proposal to provide displaced LPTV stations 
with cable carriage rights at their new location or channel pointing 
out that no commenter maintains that such action would be within the 
Commission's statutory authority and, regardless, the Commission 
declined to grant carriage rights beyond those required under the 
Communications Act.
    482. The Commission concluded that new 600 MHz wireless licensees 
must provide LPTV and TV translator stations advance notification if 
they intend to

[[Page 48506]]

commence operations in areas of their geographic licenses where there 
is a likelihood of receiving harmful interference from an LPTV or TV 
translator station. After receiving such notification, the LPTV or TV 
translator station must cease operations or reduce power in order to 
eliminate the potential for harmful interference to the operations of 
the 600 MHz licensee.
    483. The 600 MHz Band licensee must provide notice to the LPTV or 
TV translator licensee in the form of a letter, by certified mail, 
return receipt requested. The notice must indicate the date that the 
600 MHz Band licensee intends to commence operations, and must be 
delivered to the LPTV or TV translator licensee not less than 120 days 
in advance of that date. The LPTV or TV translator licensee must cease 
operating or reduce power before the commencement date set forth in the 
notice. This obligation will apply even if the LPTV or TV translator 
station has submitted a displacement application that has not been 
granted. LPTV and TV translator stations may continue operating on 
channels in the 600 MHz Band until a licensee wireless licensee 
commences operations pursuant to the notification process the 
Commission is adopting. The Commission concluded that it is appropriate 
to adopt more definitive channel clearing obligations for LPTV and TV 
translator than were implemented in the 700 MHz transition in order to 
ensure that new 600 MHz Band licensees will have prompt and efficient 
access to their spectrum. This approach will provide certainty to new 
licensees, helping to ensure the success of the auction and a smooth 
transition.
    484. The Commission will require that LPTV and TV translator 
stations operating on channels that include frequencies repurposed for 
600 MHz Band guard band use (including the duplex gap) cease operations 
on those frequencies. The Commission rejected a proposal that LPTV 
stations be allowed to continue operating on any channels allocated as 
guard bands finding that the 600 MHz Band Plan designates spectrum to 
serve as guard bands, and consistent with its proposal in the NPRM, 
only low power device operations will be permitted in those bands and 
make this spectrum available for innovative unlicensed use nationwide. 
In order to fully transition this spectrum for unlicensed use on a 
nationwide basis, on a nationwide basis, all LPTV and TV translator 
licensees operating in spectrum repurposed for 600 MHz Band guard band 
use will be required to cease operating on that spectrum no later than 
the end of the post-auction transition period (i.e., 39 months after 
the issuance of the Channel Reassignment PN). In addition, as set forth 
above, an LPTV or TV translator licensee operating in spectrum reserved 
for the guard bands will be required to cease operating prior to that 
date if any 600 MHz Band licensee has notified them that their 
operations would be likely to cause harmful interference in areas where 
the wireless licensee intends to commence operations. LPTV stations 
that currently operate on channels that include frequencies that are 
repurposed as 600 MHz Band guard bands will be eligible to file an 
application for a new channel in the displacement window.
2. Television Fixed Broadcast Auxiliary Stations
    485. The Commission will continue to license fixed BAS on a 
secondary basis in the television bands following the incentive 
auction. As a result of the incentive auction and repacking process, 
BAS operators will be required to vacate the 600 MHz Band no later than 
the end of the post-auction transition period. Following the issuance 
of the Channel Reassignment PN, BAS operations will have significant 
advance notice of the channels they may need to vacate, which will 
assist them in advance planning for that process.
    486. Notification Procedures for Operations in the 600 MHz Band and 
the Post-Auction Television Bands. The Commission will continue to 
license fixed BAS on a secondary basis in the UHF spectrum that remains 
allocated and assigned to full power television services nationwide, it 
will require all fixed BAS stations to cease operating and relocate 
from the 600 MHz Band no later than the end of the post-auction 
transition period (i.e., 39 months after issuance of the Channel 
Reassignment PN). Additionally, before the end of this transition 
period, if a new 600 MHz licensee intends to commence operations, the 
600 MHz licensee must provide 30 days' advance notice to the BAS 
operator that it intends to commence operations and that the BAS 
station is likely to cause harmful interference to those operations. 
The BAS operator must cease operating on that channel within 30 days of 
receiving notice. The notice from the 600 MHz licensee to the BAS 
licensee must take the form of a letter, by certified mail, return 
receipt requested. A 30-day notice period will serve the public 
interest by both protecting BAS operations and speeding the deployment 
of new broadband wireless services.
    487. In addition, as a secondary service, BAS may not cause 
interference to repacked television stations. Should a repacked 
broadcast television licensee in the 600 MHz Band or the repacked UHF 
Band experience harmful interference from a BAS licensee, the BAS 
licensee must, pursuant to the Commission's rules, immediately cease 
operations and may not resume operations until the interference problem 
is resolved.
    488. Operations in the Guard Bands. The Commission also will 
require that BAS operations on channels that include frequencies that 
will be reserved for guard bands pursuant to this Order cease 
operations on those channels. The 600 MHz Band includes guard bands 
(including the duplex gap), and consistent with the Commission's 
proposal in the NPRM, we will permit only low power operations in those 
bands. All BAS operations in spectrum reserved for guard bands will be 
required to cease operating on that spectrum no later than the end of 
the post-auction transition period (i.e., 39 months after the issuance 
of the Channel Reassignment PN).
3. Television White Space (TVWS) and Unlicensed Device Operations
    489. Operations in the Post-Auction Television Bands. The 
Commission will continue to allow television white space (TVWS) devices 
to operate under the current part 15 rules in the spectrum that remains 
allocated and assigned for TV broadcast services following the 
incentive auction. The Commission notes that, as the television bands 
are repacked, there are likely to be fewer available channels for TVWS 
devices in this spectrum and it intends to designate one unused TV 
channel in each area for shared use by TVWS devices and wireless 
microphones.
    490. Operations in the 600 MHz Band Guard Bands. The Commission 
will initiate a separate 600 MHz and TVWS Part 15 Proceeding in the 
near term to develop the technical parameters for unlicensed operations 
in the spectrum that, the incentive auction, will serve as 600 MHz Band 
guard bands--specifically, the bands between broadcast television and 
wireless services, the duplex gap, and bands adjacent to channel 37.
    491. Operations on Unused Television Channels Currently Designated 
for Wireless Microphones. The Commission will no longer require that up 
to two unused channels in any area be designated exclusively for 
wireless microphone operations. It will, however, continue to prohibit 
TVWS devices from operating on these

[[Page 48507]]

channels until our rules to improve our TV bands databases to provide 
for more immediate protection of registered wireless microphone 
operations become effective, after which time TVWS devices potentially 
could operate on any of these channels. The Commission also intends to 
designate one television channel for shared use by wireless microphones 
and TVWS devices.
    492. Operations in the 600 MHz Band. The Commission will permit the 
continued operation of TVWS devices on repurposed spectrum except in 
those areas in which a 600 MHz Band licensee commences operations. 
After obtaining their licenses the Commission expects that 600 MHz Band 
licensees will be commencing operations at different places at 
different times depending on their business plans and other factors. 
The Commission is persuaded by those that unequivocally oppose 
unlicensed use of this repurposed spectrum following the incentive 
auction. Since TVWS devices can operate only on channels identified in 
the TV bands databases, these databases can serve to ensure that 
unlicensed operations will no longer occur on a channel on which a 
licensee has commenced service. When a 600 MHz Band licensee plans to 
commence operations on frequencies that include channels available for 
unlicensed operations under the rules for TVWS devices, that licensee 
can notify any of the TV bands database Administrators when and where 
it plans to commence operations. Through these actions, the TV bands 
databases would be updated and would preclude unlicensed operations in 
those areas.
4. Low Power Auxiliary Station and Unlicensed Wireless Microphones
    493. The Commission is adopting several rule changes that address 
operations of licensed Low Power Auxiliary Station (LPAS) and 
unlicensed wireless microphones in the post-auction television bands, 
as well as the operation of these devices in the 600 MHz Band guard 
bands once the technical rules are established in a separate 
rulemaking. Wireless microphone operators today rely on UHF band 
spectrum to provide important broadcasting and production services, as 
well as other services, and will need some time to transition many of 
their operations to other spectrum bands. Accordingly, the Commission 
will allow wireless microphone operations in the post-auction 
television bands, 600 MHz Band guard bands, and the 600 MHz Band 
spectrum repurposed for wireless services during the post-auction 
transition. The transition period will be helpful in addressing the 
important needs of wireless microphone users in the near term as future 
technologies are developed for accommodating their needs through a 
combination of more efficient use of post-auction television band 
spectrum as well as use of spectrum outside of the current UHF 
television band.
    494. Operations in the Post-Auction Television Bands. Licensed LPAS 
and unlicensed wireless microphone operations may continue to operate 
on available unused television channels under the revised rules for co-
channel operations. The Commission notes that, with the post-auction 
transition and the repacking of television stations (including 
relocated full power stations, LPTV, and BAS), the particular channels 
available for wireless microphone users may change, and these users 
will need to adjust their operations accordingly. In addition, the 
Commission intends to designate one television channel following the 
auction for shared use by wireless microphones and TVWS devices, and 
note that on any of the television channels available for TVWS devices, 
wireless microphone users can obtain protection from interference from 
TVWS devices by registering in the TV bands databases.
    495. Operations in the 600 MHz Band Guard Bands. The Commission 
also will allow wireless microphone users to operate on the spectrum 
established for 600 MHz Band guard bands (including the duplex gap) to 
the extent that those channels are available for use under the revised 
separation distance rules for co-channel operation with TV broadcast 
stations. Wireless microphone users generally will be permitted to 
operate on an unlicensed basis in the guard bands, while broadcasters 
and cable programming networks operating wireless microphones on a 
licensed basis will be permitted to obtain interference protection from 
unlicensed devices in a portion of the duplex gap at specified times 
and locations, on an as-needed basis. Wireless microphone use in the 
guard bands will be subject to any rule revisions that the Commission 
later adopts in the planned 600 MHz and TVWS Part 15 Proceeding, which 
will develop rules for unlicensed and other low power operations in the 
guard bands that protect licensed operations outside of the guard 
bands.
    496. Operations on Unused Television Channels Currently Designated 
for Wireless Microphones. The Commission will no longer continue to 
designate up to two unused television channels in any area exclusively 
for wireless microphone operations, although it does intend to 
designate one unused television channel for shared use by wireless 
microphone and TVWS devices. To help ensure that licensed wireless 
microphone operators can obtain access to available television channels 
they need free of interference from TVWS devices, in our planned 600 
MHz and TVWS Part 15 Proceeding, the Commission will be seeking comment 
on ways we can update the rules for TV bands databases to provide for 
more immediate reservation of unused and available channels in the 
television bands. However, for some period of time following the 
incentive auction, the two channels currently available exclusively for 
wireless microphones may, depending on the particular location, 
continue to be unused by either broadcasters or 600 MHz Band licensees. 
To the extent that one or both of these channels remain available for 
wireless microphones in particular locations, we will continue to 
prohibit TVWS devices from operating on these channels until the 
Commission's rules improve our TV bands database registration process 
(providing for more immediate protection from interference by TVWS 
devices) become effective. After that time, any available channels 
could be used by either wireless microphones or TVWS devices.
    497. Operations in the 600 MHz Band. Winning forward auction 
bidders will not have been granted their 600 MHz Band licenses 
immediately following the incentive auction, and may not commence 
operations for some period of time. In addition, as wireless microphone 
users and manufacturers point out, many wireless microphone users have 
recently incurred substantial costs associated with buying new UHF band 
wireless microphone equipment following their relocation outside of the 
700 MHz Band. The Commission finds that during the post-auction 
transition period the public interest will be served by allowing 
wireless microphone operations in the repurposed spectrum.
    498. The Commission will permit wireless microphone users to 
continue to operate in the 600 MHz Band during the post-auction 
transition period subject to certain conditions designed to protect the 
600 MHz licensees' primary rights to make full use of their licensed 
spectrum. Specifically, for this transition period, to the extent that 
either licensed LPAS or unlicensed wireless microphone users operate in 
the 600 MHz Band, consistent with their secondary or unlicensed status 
they will not be entitled to any interference protection from 
operations of the primary 600 MHz licensees. The Commission also 
requires that wireless microphone users cease any operations in the 600 
MHz Band if their operations

[[Page 48508]]

cause harmful interference to any 600 MHz licensee's operations. 
Finally, the Commission established a hard date by which all wireless 
microphone operations must be transitioned out of the 600 MHz Band, 
requiring that all such operations cease no later than the end of the 
post-auction transition period (i.e., 39 months after the issuance of 
the Channel Reassignment PN). The Commission finds that establishing a 
hard date by which all licensed and unlicensed microphone operations 
must cease operations provides needed certainty and clarity that 
wireless microphone operators cannot continue operations in spectrum 
assigned to wireless licensees and helps ensure that wireless providers 
can operate without interference.
    499. In taking these actions, the Commission seeks to accommodate 
the needs of wireless microphone users in the near term, providing some 
necessary time for transitioning operations out of the repurposed 600 
MHz Band, while the Commission protect the primary rights of 600 MHz 
licensees. Considering the various types of wireless microphone users, 
and the various types of wireless microphone devices in use today 
(including devices that can only operate on particular frequencies in 
the UHF band), some time is needed in order to obtain new equipment and 
transition wireless microphone users off of the frequencies that are 
being repurposed for 600 MHz Band service, whether to other available 
frequencies in the UHF band (i.e., the post-auction television bands or 
the 600 MHz Band guard bands) or to spectrum outside of the UHF band.

V. Post-Transition Regulatory Issues

A. Broadcast Issues

1. Media Ownership Rules and Diversity
a. Media Ownership Rules
    500. The Commission will grandfather existing station combinations 
previously approved by the Commission that otherwise would no longer 
comply with the media ownership rules as a result of the reverse 
auction. See Review of the Commission's Regulations Governing 
Television Broadcasting, MM Docket No. 91-221, Report and Order, 14 FCC 
Rcd 12903, 12932-33, para. 64 (1999) (holding that, if an entity 
acquires a duopoly under the Commission's current local television 
ownership rule, ``it will not later be required to divest if the number 
of operating television voices within the market falls below eight or 
if the two merged stations subsequently are both ranked among the top 
four stations in the market; however, a duopoly may not automatically 
be transferred to a new owner if the market does not satisfy the eight 
voice/top four-ranked standard''). Absent a waiver of the rules, 
however, the Commission will not accept channel sharing bids in the 
reverse auction that would cause a media ownership rule violation by a 
party to the channel sharing arrangement based on the rules and facts 
as they exist at the time the application to participate in the auction 
is filed. Specifically, the Commission will not accept channel sharing 
bids that would trigger a violation of the local television multiple 
ownership rule, the newspaper/broadcast cross-ownership rule, or the 
radio/television cross-ownership rule by a channel sharing partner. The 
Commission will accept reverse auction bids that would trigger a 
violation of the national television multiple ownership rule, which 
limits a broadcaster's national audience reach to 39 percent, subject 
to a ``UHF Discount'' attributing only 50 percent of the TV households 
in a DMA to UHF stations. Such a violation potentially could be caused 
by the relocation of a sharee station if the contour of the station 
newly overlaps or encompasses any other media outlets in which the 
licensee of the station has an attributable ownership interest. Because 
the licensee in this situation would exercise control over the 
triggering of a potential violation of the Commission's rules and 
because the licensee would have the ability to determine prior to the 
auction that such a violation would occur, grandfathering would be 
inappropriate and contrary to the public interest. The Commission does 
not believe this limitation on grandfathering will unduly discourage 
reverse auction participation. In addition, the Commission agrees with 
commenters that it is appropriate to keep its grandfathering policy 
simple to avoid unnecessary disruption to the broadcast industry.
    501. The Commission rejects arguments that grandfathering should 
not be permitted because it would ``irreparably harm'' ownership 
diversity. While the Commission acknowledges concerns about the 
potential impact of the auction on broadcast ownership diversity, it 
concludes that grandfathering existing combinations that have been 
approved is justified in these unique circumstances. The Commission 
structures transitional procedures as appropriate in light of the 
specific rule changes at issue, whether the changes could have been 
anticipated when the combinations were acquired, reliance on existing 
rules, and the nature and degree of disruption that would be caused by 
requiring immediate divestitures. Broadcasters have made substantial 
long-term investments in their station combinations in reliance on 
Commission approval of their station acquisitions and its multiple 
ownership rules. It would be inequitable if owners of existing 
combinations were negatively affected if circumstances that they could 
not have anticipated and could not control subsequently change such 
that the combination no longer complies with the rules. For similar 
reasons, the Commission rejects NHMC's proposal that it review every 
combination ``on a case-by-case basis, upon completion of the auction 
process'' to assess whether the combination serves the Commission's 
public interest goals, including promoting ownership diversity, in the 
post-auction environment. NHMC's proposal would undermine the certainty 
regarding the auction and the repacking processes that is critical to 
the overall success of the incentive auction.
    502. Upon the sale of a grandfathered station combination, the 
Commission will require the new owner to comply with the media 
ownership rules in place at the time of the transaction or obtain a 
waiver. The Commission rejects Tribune's proposal to allow 
grandfathered combinations to be sold intact because it is inconsistent 
with prior FCC practice, and is are not persuaded that it should depart 
from current policy here.
b. Diversity of Media Ownership
    503. As an initial matter, the Commission emphasizes that all 
qualified broadcasters will have an opportunity to enter the reverse 
auction. Consistent with the Spectrum Act, auction participation will 
be voluntary: No broadcasters will be compelled to participate. The 
Commission concurs with commenters about the importance of outreach 
regarding the incentive auction to broadcasters, including those owned 
by minorities or females. As noted above, the Commission has conducted 
numerous workshops and other direct outreach efforts to help 
broadcasters, including those that are minority- or female-owned, make 
informed business decisions about whether and how to participate in the 
reverse auction. As broadcast representatives have emphasized 
repeatedly, access to capital is an ongoing challenge for minority and 
female broadcasters. Voluntary participation in the reverse auction, 
via a channel sharing, UHF-to-VHF, or high-VHF-to-low-VHF bid, offers a 
significant

[[Page 48509]]

and unprecedented opportunity for these owners to raise capital that 
may enable them to stay in the broadcasting business and strengthen 
their operations. The Commission considers fostering minority and 
female ownership of broadcast stations an important goal, and its 
efforts to promote such ownership will continue after the auction and 
the repacking process.
    504. The Commission rejects suggestions to assess the impact of the 
auction on minority and female ownership levels by collecting from all 
auction participants the same ownership information it already collects 
through its biennial ownership report forms. Although measuring the 
impact of the auction on broadcast ownership diversity is important, 
the additional data collection efforts proposed would replicate 
existing efforts and thus impose an unnecessary burden. Its required 
biennial ownership reports provide extensive information about the 
ownership structure of each commercial broadcast licensee, including 
information about minority and female ownership status. The collection 
of data biennially and the use of a uniform ``as of'' date give the 
Commission successive ``snapshots'' of the status of minority and 
female ownership in the industry on a fixed, periodic schedule. This 
information provides a basis for analyzing ownership trends within the 
broadcast industry.
2. Channel Sharing Operating Rules
    505. The Commission will require all channel sharing agreements 
(CSAs) to include certain key provisions. Specifically, in addition to 
the existing requirement regarding access to shared channel capacity, 
CSAs must contain provisions outlining each licensee's rights and 
responsibilities in the following areas: (1) Access to facilities, 
including whether each licensee will have unrestrained access to the 
shared transmission facilities; (2) allocation of bandwidth within the 
shared channel; (3) operation, maintenance, repair, and modification of 
facilities, including a list of all relevant equipment, a description 
of each party's financial obligations, and any relevant notice 
provisions; and (4) termination or transfer/assignment of rights to the 
shared licenses, including the ability of a new licensee to assume the 
existing CSA. While channel sharing partners will be required to 
address these matters in their CSAs, they may craft provisions as they 
choose, based on marketplace negotiations, subject to pertinent 
statutory requirements and the Commission's rules and regulations. CSAs 
also must include a provision affirming compliance with the channel 
sharing requirements in the Report and Order, the Channel Sharing 
Report and Order, and the Commission's rules. The Commission reserved 
the right to review CSA provisions and require modification of any that 
do not comply with these requirements or the Commission's rules.
    506. The Commission announced that, should a channel sharing 
station's license be terminated due to voluntary relinquishment, 
revocation, failure to renew, or any other circumstance, the remaining 
channel sharing station or stations will continue to have rights to 
their portion(s) of the shared channel. The rights to the terminated 
portion of the shared channel will revert to the Commission for 
reassignment. The Commission will condition the final award of the 
rights to the terminated portion of the shared channel on the new 
channel sharing licensee agreeing to the terms of the existing CSA. If 
the new channel sharing licensee and the remaining channel sharing 
station(s) agree to renegotiate the terms of the existing CSA, the 
agreement may be amended, subject to Commission approval. If the 
negotiations to amend the agreement are unsuccessful, the remaining 
station or stations may continue to operate while the channel remains a 
``shared'' allocation and subject to reassignment. The Commission will 
allow rights under a CSA to be assigned or transferred, subject to the 
requirements of Section 310 of the Communications Act, the rules, and 
the requirement that the assignee or transferee comply with the 
applicable CSA.
    507. The Commission declined to adopt a rule that would make 
channel sharing licensees jointly responsible for compliance with 
specific rules. The Commission received no comment in response to the 
inquiry in the NPRM regarding whether requiring joint responsibility 
with respect to certain technical requirements is necessary or 
appropriate, and the record in this proceeding does not support a 
change to the existing policy.
    508. The Commission adopted rules to govern NCE stations operating 
on reserved channels that choose to channel share. Specifically, an NCE 
licensee operating on a reserved channel, whether it relinquishes its 
channel in order to share a non-reserved channel or agrees to share its 
reserved channel with a commercial station, will retain its NCE status 
and must continue to comply with the rules applicable to NCE licensees. 
In either case, the NCE station's portion of the shared channel (which, 
at a minimum, must enable the broadcast of one SD programming stream) 
will continue to be reserved for NCE-only use. Further, a reserved-
channel NCE sharing station may assign its license only to a qualified 
NCE entity. Similarly, if a reserved-channel NCE sharing station's 
license is relinquished or terminated, only another entity meeting the 
NCE eligibility criteria will be considered for reassignment of the 
license.
    509. The Commission adopted rules governing the power levels at 
which stations may operate and the applicable MVPD carriage rights when 
both a full power and a Class A station participate in a channel 
sharing agreement by allowing a Class A station to operate under the 
Part 73 rules governing power levels and interference if it shares a 
full power television station's channel. Similarly, a full power 
station sharing a Class A station's channel must operate under the Part 
74 power level and interference rules.
    510. The Commission interpreted the Spectrum Act to entitle a Class 
A station that channel shares with a full power sharer only to those 
carriage rights to which a Class A station would be entitled at the 
shared location were it not sharing. The Commission also clarified that 
a full power sharee, whether a commercial or NCE station, that channel 
shares with a Class A licensee will have the same carriage rights at 
the channel sharing location that a non-channel sharing full power 
station would have at that location. In addition, low power stations, 
including Class A stations, lack statutory mandatory carriage rights on 
DBS systems, and that lack of such rights will continue when a Class A 
station channel shares with a full power station.
    511. The Commission noted that, as a result of channel sharing with 
a Class A station and operating with the Class A station's reduced 
power level, a full power station may find it needs to use alternative 
means, such as fiber or microwave, to deliver a good quality signal to 
a cable system headend it previously could reach with its over-the-air 
signal. This change, however, will not affect its right to demand 
carriage throughout its market. Similarly, NCE stations that share with 
a Class A station will retain the ability to cure their signal and 
secure must-carry rights, but only with respect to headends located 
within 50 miles of their communities of license, or located within 
their noise limited service contours--the same rights they possess 
today.

[[Page 48510]]

B. 600 MHz Band Technical and Service Rules

1. Technical Rules
a. Out-of-Band Emission Limits
    512. Four interference scenarios exist that relate to OOBE limits: 
(1) Interference to adjacent 600 MHz Block operations; (2) interference 
to adjacent Lower 700 MHz Band operations; (3) interference to 
television operations; and (4) interference to channel 37 operations.
    513. Interference to Adjacent 600 MHz Block Operations. We adopt 47 
CFR 27.53(g) of the Commission's rules, which includes OOBE attenuation 
of 43+10*log10(P) dB and the associated measurement 
procedure, to address interference between adjacent blocks within the 
600 MHz Band, and between 600 MHz Band spectrum and adjacent bands. 
This OOBE limit is commonly employed in other commercial wireless 
services bands and it has generally been found to be adequate in 
preventing harmful interference to adjacent spectrum blocks operations. 
Additionally, it is beneficial to maintain comparable emissions limits 
among commercial bands with similar services so as not to disadvantage 
one band over another.
    514. Interference to Adjacent Lower 700 MHz Band Operations. The 
upper end of the 600 MHz Band uplink band is adjacent to the lower 
portion of the Lower 700 MHz Band, which is also being used for mobile 
uplink operations. As discussed above, the interference environment 
between these two bands will be similar to interference within either 
band and the OOBE limits we are adopting will protect adjacent Lower 
700 MHz Band because their operations are harmonized.
    515. Interference to Television Operations. Under the 600 MHz Band 
Plan, the lower end of the 600 MHz Band downlink band will likely be 
adjacent to broadcast television operations, with a guard band between 
the two services. Most parties commenting on this issue support the 
Commission's proposal to adopt the Lower 700 MHz Band OOBE 
requirements. However, IEEE 802 and the Wi-Fi Alliance express concern 
that emissions from 600 MHz Band uplinks may cause interference to 
nearby television receivers and that the Commission should regulate the 
OOBE limits of all newly licensed devices (e.g., mobile broadband 
handsets) to ensure that we protect all authorized devices. Under the 
600 MHz Band Plan, mobile uplink operations are not adjacent to 
television broadcast spectrum and will therefore not interfere with 
television receivers.
    516. Based on our technical analysis, this OOBE requirement, in 
conjunction with the guard bands we establish, will prevent harmful 
interference to television and channel 37 operations. Accordingly, the 
proposed OOBE limits for the 600 MHz Band, with a required guard band, 
will address interference to all television operations. We note that in 
the event that a specific incidence of harmful interference occurs, we 
may impose stricter emissions limits as a remedy. By applying the same 
OOBE limits as currently exist between the Lower 700 MHz Band and 
television stations, 600 MHz Band licensees will provide similar 
protection as exists today.
    517. Interference to Channel 37 Operations. Depending on the total 
amount of spectrum made available for flexible use, we may permit 
either television stations, and/or 600 MHz Band base stations to 
operate adjacent to channel 37 operations. Television stations 
currently operate adjacent to channel 37 without any guard bands at 
very high power, with no reported problems, which indicates that the 
television stations' OOBE and power limits are sufficient to protect 
channel 37 operations. Both of these current limits are higher than 
those adopted for the 600 MHz Band. The 600 MHz Band OOBE and power 
limits coupled with three megahertz guard bands will provide as much or 
more protection to channel 37 operations than they currently receive 
from television operations. Therefore, these limits are sufficient to 
protect against harmful interference to existing channel 37 operations.
    518. Some commenters argue that we should adopt more stringent 
emission limits to protect WMTS operations in channel 37. Specifically, 
they express concern that the reallocation of the 600 MHz Band for 
fixed and mobile services will result in a large number of mobile 
devices and/or base stations operating in close proximity of WMTS 
operations on adjacent channels, which will result in significant 
interference to WMTS operations. To address possible interference from 
mobile devices to WMTS operations, these commenters propose that we 
apply the spectral mask for TV white space devices to transmitters 
operating on channels adjacent to WMTS. In the alternative, WMTS 
Coalition suggests we restrict all mobile uplink transmissions to bands 
well removed from channel 37. In our Band Plan scenarios, the mobile 
uplink band will not be adjacent to WMTS operations; as a result, 
mobile devices should not cause harmful interference to WMTS 
operations.
    519. To address possible harmful interference from base stations, 
commenters suggest we either prohibit base stations from operating 
within a specific range of WMTS systems, coordinate base station 
operations with adjacent WMTS systems and limit the maximum allowable 
field strength of base station emissions, or consider creating a guard 
band between channel 37 WMTS operations and wireless broadband 
operations. To protect Radio Astronomy facilities from wireless 
downlinks into Radio Astronomy observations, NAS-CORF proposes OOBE 
limits below 43+10*log10(P) dB.
    520. We also note that Sony recommends that we clearly define 
transmission masks for all operations under the new 600 MHz Band, 
including both television and wireless data, and for both base stations 
and mobile devices. The Commission's transmission masks for existing 
spectrum bands and the associated measurement procedures are clearly 
defined in its ``Emission Limits'' rules.
    521. As discussed above, we adopt a three megahertz guard band 
between 600 MHz base stations and channel 37 services. Further, we 
adopt a band plan that has generally large separations between 600 MHz 
mobile stations and channel 37 services, and require 600 MHz licensees 
to coordinate with NSF when radio astronomy observatories are near 
their operations. Given these considerations, the proposed OOBE limits 
for the 600 MHz Band will mitigate potential harmful interference to 
channel 37 operations. If a specific incidence of harmful interference 
occurs, we may impose stricter emissions limits as a remedy.
b. Power Limits
    522. For 600 MHz Band downlink operations, the Commission proposed 
to limit fixed and base station power for downlink operations in non-
rural areas to 1000 watts ERP for emission bandwidths less than 1 MHz 
and to 1000 watts per 1 MHz ERP for emission bandwidths greater than 
one megahertz, and to double these limits to 2000 watts or 2000 watts/
MHz ERP in rural areas, provided advance notice is given. In addition, 
the Commission proposed not to apply the power flux density 
requirements of section 27.55(b) to the 600 MHz Band because there is 
no provision for high powered (50 kW) stations within the 600 MHz Band. 
In the 600 MHz Band uplink band, the Commission proposed to adopt the 
same power limit of three watts ERP for both portables and mobiles that 
apply to the

[[Page 48511]]

Lower 700 MHz Band and prohibit higher-powered control station 
operations, which are allowed in the Lower 700 MHz Band. Commenters 
overwhelmingly support our adopting the proposed power limits for the 
600 MHz Band. We adopt these proposed limits, which will help ensure 
robust service in the 600 MHz Band while also helping to minimize 
harmful interference into other bands. These power limits are also 
commonly employed in other commercial wireless services bands and it 
has generally been found to be adequate in preventing harmful 
interference to adjacent spectrum blocks operations.
c. Base Station Antenna Height Restrictions
    523. In the NPRM, the Commission proposed to apply the Lower 700 
MHz Band flexible base station antenna height rules to 600 MHz Band 
base stations. See 47 CFR 27.50(c). Consistent with the Commission's 
proposal, specific antenna height restriction for 600 MHz Band base 
stations are not necessary. The general requirement to not endanger air 
navigation and the effective height limitations implicitly resulting 
from our co-channel interference rules obviate the need for specific 
antenna height restrictions for 600 MHz Band licensees. Further, 
commenters addressing this issue support this proposal. Thus, we will 
not require specific antenna height restrictions for 600 MHz Band base 
stations.
d. Co-Channel Interference Between 600 MHz Band Wireless Broadband 
Systems
    524. We adopt the 700 MHz Band co-channel interference 
requirements, limiting field strength levels at the edge of a license 
area to 40 dB[micro]V/m for the 600 MHz Band to protect adjacent 
wireless broadband systems from one another. See 47 CFR 27.55(a). The 
700 MHz Band requirements are appropriate because of the 700 MHz Band's 
similar propagation and interference characteristics. Commenters 
support this approach. Thus we adopt the proposed co-channel 
interference levels and expand 47 CFR 27.55(a)(2) of the Commission's 
rules to include the 600 MHz Band.
e. Interoperability Rule
    525. We adopt an interoperability requirement for the 600 MHz Band. 
Specifically, we require that user equipment certified to operate in 
any portion of the 600 MHz Band must be capable of operating throughout 
the 600 MHz Band. Although the 600 MHz Band Plan promotes 
interoperability by creating a single paired band rather than multiple 
bands, it does not guarantee that interoperability will naturally 
occur, particularly since, as a technical matter, multiple filters may 
be needed depending on how much spectrum is repurposed.
    526. Commenters overwhelmingly support the principle of 
interoperability. Many commenters agree that the Commission should 
mandate an interoperability requirement while others suggest that the 
Commission could encourage interoperability through a carefully 
organized band plan. US Cellular proposes that the Commission should 
``require that: (1) All mobile devices designed to operate on 600 MHz 
paired spectrum must tune to all 600 MHz paired frequencies; and (2) 
all 600 MHz networks operating on 600 MHz paired frequencies must 
permit the use of such devices.'' US Cellular also suggests that, in 
the event that we offer nationwide downlink-only blocks, any 
interoperability requirement should apply to downlink-only spectrum as 
well. Verizon Wireless, however, states that ``the Commission should 
not adopt any interoperability requirement but should instead 
facilitate interoperability by adopting a well-conceived band plan that 
minimizes interference issues.'' It also raises concerns that mandating 
interoperability will have a negative impact on investment and reduce 
the value of auctioned spectrum by increasing device complexity, size 
and cost.
    527. Historically, the Commission has supported promoting 
interoperability. Beginning with the licensing of cellular spectrum, 
the Commission has opined that consumer equipment should be capable of 
operating over the entire range of cellular spectrum as a means to 
``ensure full coverage in all markets and compatibility on a nationwide 
basis.'' More recently, a group of small and rural wireless licensees 
in the Lower 700 MHz Band asserted that the larger wireless carriers 
had been involved in developing restrictive band classes for 700 MHz 
mobile equipment, which limited their ability to provide roaming to 
their customers, delayed the deployment of networks in rural areas, and 
limited smaller wireless carriers from fully utilizing their spectrum, 
and urged the Commission to initiate a rulemaking to address 
interoperability issues in the 700 MHz Band. Subsequently, the 
Commission took certain steps to implement an industry solution to 
provide interoperable service in the Lower 700 MHz Band in an efficient 
and effective manner to improve choice and quality for consumers of 
mobile services. In reviewing the voluntary solution that would resolve 
the lack of interoperability in this band, the Commission determined 
that the voluntary solution would serve the public interest by enabling 
consumers, especially in rural areas, to enjoy the benefits of greater 
competition and more choices, and by encouraging efficient use of 
spectrum, investment, job creation, and the development of innovative 
mobile broadband services and equipment.
    528. To comply with the interoperability requirement we adopt for 
the 600 MHz Band, user equipment certified to operate in any portion of 
the 600 MHz Band must be capable of operating, using the same 
technology that the licensee has elected to use, throughout the entire 
600 MHz Band. While we adopt a band plan that promotes interoperability 
by creating a single paired band, the unique nature of the incentive 
auction amplifies the need for certainty and clear rules. Given that we 
may repurpose more spectrum for flexible use than can be supported by a 
single filter, promoting interoperability through our band plan is 
insufficient to ensure interoperability for this band. Thus, we make 
clear that our interoperability requirement applies to the entire 600 
MHz Band, regardless of how many band classes may be created by 
standards-setting bodies to cover this spectrum assigned for flexible-
use licenses (i.e., devices must support the entire 600 MHz Band, 
regardless of whether services are provided over one 5+5 megahertz 
block, or multiple spectrum blocks). The benefits of requiring 
interoperability to promote rapid deployment of the 600 MHz Band, 
particularly in rural areas, outweigh any potential costs relating to 
increased device complexity.
    529. The Commission's experience with deployment in the Lower 700 
MHz Band highlights the need for clear ex ante interoperability rules 
to promote rapid deployment in the 600 MHz Band, particularly in rural 
areas. Although Verizon Wireless notes that the Commission chose to 
defer to voluntary industry initiatives in promoting interoperability 
in the PCS band, it did so only because ``the industry is now working 
aggressively to complete several voluntary interoperability standards 
for PCS in a timely manner.'' The record reflects no such assurances 
here. We further note that there may be increased complexity of 600 MHz 
devices independent of any interoperability requirement depending on 
the amount of spectrum we can repurpose for 600 MHz Band services.

[[Page 48512]]

As Verizon readily acknowledges, clearing a large swath of spectrum 
would inevitably increase device complexity but that repurposing a 
large amount of spectrum for new wireless use ``would be a good 
`problem' to have.'' Because it is essential to promote rural broadband 
deployment and ensure that consumers have rapid access to 600 MHz Band 
services, the public interest will be best served by requiring 
interoperability in the 600 MHz Band, and therefore adopt an 
interoperability requirement.
    530. The 600 MHz Band Plan we adopt today also ensures that we will 
clear broadcast television stations from channel 51, which will serve 
as the top edge of the 600 MHz uplink band. Commenters strongly support 
clearing channel 51 of broadcast television operations to minimize 
interference to 700 MHz A Block operations, and urge us to consider 
early relocation of channel 51. Under our 600 MHz Band Plan, pursuant 
to each of the band plan scenarios we set forth, we will offer the 
first spectrum block at channel 51. Further, we note that our decisions 
today on repacking and reimbursement support early, voluntary 
relocation of channel 51.
f. Other Technical Issues
    531. In addition to the specific technical issues addressed above, 
the Commission proposed to apply several part 27 rules to the 600 MHz 
Band: Equipment authorization, RF safety, frequency stability, antennas 
structures; air navigation safety, and disturbance of AM broadcast 
station antenna patterns. See 47 CFR 27.51, 27.52, 27.54, 27.56, 27.63. 
The Commission reasoned that because the 600 MHz Band will be licensed 
as a part 27 service, these rules should apply to all licensees, 
including those who acquire licenses through partitioning or 
disaggregation. No commenters oppose this proposal. Accordingly, 
because we are licensing the 600 MHz Band under our part 27 regulatory 
framework and these rules generally apply to all part 27 services, we 
will apply these additional part 27 rules to 600 MHz Band licensees.\3\
---------------------------------------------------------------------------

    \3\ The Commission recently deleted 47 CFR 27.63. Rules 
governing disturbance of AM broadcast station antenna patterns are 
now contained in Subpart BB of Part 1.
---------------------------------------------------------------------------

2. Service Rules
a. Flexible Use, Regulatory Framework, and Regulatory Status
(i) Flexible Use
    532. We adopt the Commission's proposal to license the 600 MHz Band 
under flexible-use service rules, in accordance with the Spectrum Act's 
direction that new initial licenses for spectrum voluntarily 
relinquished through incentive auction be subject to flexible-use 
service rules. Accordingly, 600 MHz Band licensees may use the 
licensed, 600 MHz Band spectrum for any use permitted by the Table of 
Allocations, provided that the licensee complies with the applicable 
service rules. Adopting flexible-use service rules, moreover, is 
consistent with prior Congressional and Commission actions that promote 
allocating spectrum for flexible use.
(ii) Regulatory Framework
    533. In accordance with Congress's direction that new initial 
licenses made available through incentive auctions be subject to 
flexible use service rules, we will license the 600 MHz Band under part 
27. We received no comments on this proposal. The part 27 rules provide 
a broad and flexible regulatory framework for licensing spectrum, 
enabling the spectrum to be used for a wide variety of broadband 
services, thereby promoting innovation and efficient use.
(iii) Regulatory Status
    534. We adopt the proposal to apply 47 CFR 27.10 of our rules to 
the 600 MHz Band. Under this flexible regulatory approach, 600 MHz Band 
licensees may provide common carrier, non-common carrier, private 
internal communications or any combination of these services, so long 
as the provision of service otherwise complies with applicable service 
rules. This broad licensing framework is likely to achieve efficiencies 
in the licensing and administrative process and will provide 
flexibility to the marketplace, thus encouraging licensees to develop 
new and innovative services. Moreover, by applying this requirement to 
600 MHz Band licensees, they will receive the same regulatory treatment 
as other part 27 licensees subject to this rule. Although no commenters 
directly address this issue, commenters do support increased regulatory 
flexibility generally. This approach is in the public interest and its 
benefits outweigh any potential costs.
    535. We remind potential applicants that an election to provide 
service on a common carrier basis requires that the elements of common 
carriage be present; otherwise the applicant must choose non-common 
carrier status. If a potential licensee is unsure of the nature of its 
services and whether classification as common carrier is appropriate, 
it may submit a petition with its application, or at any time, 
requesting clarification and including service descriptions for that 
purpose.
    536. Consistent with the Commission's proposal in the NPRM, we 
adopt for the 600 MHz Band the part 27 requirement that if a licensee 
elects to change the service or services it offers such that its 
regulatory status would change, it must notify the Commission and must 
do so within 30 days of making the change. A change in the licensee's 
regulatory status will not require prior Commission authorization, 
provided the licensee is in compliance with the foreign ownership 
requirements of section 310(b) of the Communications Act that apply as 
a result of the change. We note, however, that a different time period 
(other than 30 days) may apply, as determined by the Commission, where 
the change results in the discontinuance, reduction, or impairment of 
the existing service.
b. License Restrictions
(i) Eligibility
    537. We adopt the proposed open eligibility standard. Commenters 
that support our adoption of open eligibility for the 600 MHz Band do 
so largely on the basis that large, diverse participation will foster 
innovation, competition, spectrum reclamation and maximization of 
spectrum use. Open eligibility for the 600 MHz Band is consistent with 
our statutory mandate to promote the development and rapid deployment 
of new technologies, products, and services; economic opportunity and 
competition; and the efficient and intensive use of the electromagnetic 
spectrum. Therefore, the potential benefits of open eligibility for the 
600 MHz Band outweigh any potential costs.
    538. Open eligibility is a threshold matter in determining access 
to spectrum. Our adoption of open eligibility in no way restricts or 
preempts other statutory requirements that may limit access to 
spectrum, such as foreign ownership and character qualifications. In 
that regard, we take this opportunity to clarify that adopting open 
eligibility for the 600 MHz Band is not inconsistent with the spectrum 
aggregation rules we establish in the MSH Report and Order (See 
Policies Regarding Mobile Spectrum Holdings, FCC 14-63, WT Docket No. 
12-269 (rel. June 2, 2014)).
    539. The Commission's precedent regarding open eligibility for 
bidding at auction for mobile wireless licenses generally has focused 
on whether it was necessary to restrict the eligibility of a firmly 
established regulatory class of entities. In contrast, our focus in 
adopting a mobile spectrum holdings

[[Page 48513]]

limit in the MSH Report and Order is on a class of entities that, 
through their substantial existing holdings of below-1-GHz spectrum and 
potential acquisition of a significant portion of the 600 MHz Band in a 
particular geographic area, could hamper competition in the mobile 
wireless service market. This is a transient, open class of entities--
any entity could enter or exit this class based solely on the amount of 
its below-1-GHz spectrum holdings in a particular geographic area or 
the geographic scope of its coverage. The Commission previously has 
recognized this type of distinction, between open eligibility and the 
CMRS spectrum cap (until its elimination in 2001) or other CMRS 
spectrum aggregation limits. Here, although it is not necessary to 
restrict auction eligibility of a closed class of entities, we do find 
it necessary to apply a limit on the amount of 600 MHz spectrum that 
can be acquired at the forward auction by any entity with substantial 
existing holdings of below-1-GHz spectrum in a particular geographic 
area, depending upon the geographic scope of its coverage. Though we 
acknowledge that on occasion the Commission's description of the scope 
of its open eligibility standard might not have been precise, we take 
the opportunity to clarify that mobile spectrum holding limitations are 
not eligibility restrictions to which the open eligibility standard 
applies.
    540. In addition, even if the mobile spectrum holdings limit we 
adopt in the MSH Report and Order were to be considered a restriction 
on open eligibility, this limit meets the standard that open 
eligibility would pose a significant likelihood of substantial harm to 
competition in specific markets and an eligibility restriction would be 
effective in eliminating that harm.
    541. In sum, we see no record evidence that would persuade us that 
our approach is inconsistent with our past framework for assessing 
eligibility matters and, in any event, we clarify our open eligibility 
approach going forward.
(ii) Foreign Ownership
    542. In order to fulfill our statutory obligations under section 
310 of the Communications Act, all 600 MHz Band applicants and 
licensees shall be subject to the provisions of 47 CFR 27.12 of the 
Commission's rules. All such entities are subject to section 310(a), 
which prohibits licenses from being ``granted to or held by any foreign 
government or the representative thereof.'' In addition, any applicant 
or licensee that would provide a common carrier, aeronautical en route, 
or aeronautical fixed service would also be subject to the foreign 
ownership and citizenship requirements of section 310(b).
    543. No parties comment on the Commission's proposal to require all 
600 MHz Band applicants and licensees to provide the same foreign 
ownership information in their filings, regardless of the type of 
service the licensee would provide using its authorization. Applicants 
for this Band should not be subject to different obligations in 
reporting their foreign ownership based on the type of service 
authorization requested in the application and the benefits of a 
uniform approach outweigh any potential costs. Therefore, we will 
require all 600 MHz Band applicants and licensees to provide the same 
foreign ownership information, which covers both sections 310(a) and 
310(b), regardless of which wireless communications service they 
propose to provide in the Band. We expect, however, that we would be 
unlikely to deny a license to an applicant requesting to provide 
services exclusively that are not subject to section 310(b), solely 
because its foreign ownership would disqualify it from receiving a 
license if the applicant had applied for authority to provide section 
310(b) services. However, if any such licensee later desires to provide 
any services that are subject to the restrictions in section 310(b), we 
would require that licensee to apply to the Commission for an amended 
license, and we would consider issues related to foreign ownership at 
that time.
c. License Term, Performance Requirements, Renewal Criteria, and 
Permanent Discontinuance of Operations
(i) License Term
    544. In recognition of the Post-Auction Transition Period that will 
occur after the completion of the incentive auction, we adopt an 
initial license term of 12 years for 600 MHz Band licenses, and a term 
of 10 years for any subsequent license renewals. In addition, in the 
event that a license is partitioned or disaggregated, any partitionee 
or disaggregatee will be authorized to hold its license for the 
remainder of the partitioner or disaggregator's license term, 
consistent with the existing part 27 rule. Accordingly, we modify 47 
CFR 27.13 and 27.15 of the Commission's rules to reflect these 
determinations.
    545. The Communications Act does not require a specific term for 
non-broadcast spectrum licenses. The Commission has typically adopted 
10-year license terms for part 27 services, but has also found, as in 
the case of AWS-1 licenses and AWS-3 licenses, a longer initial term to 
be in the public interest. Further, commenters generally support at 
least a 10-year license term. Given the complexities and timing of 
clearing broadcast operations in this Band, we agree with US Cellular 
that a longer initial license term is appropriate. Consequently, 
adopting a 12-year initial license term is in the public interest and 
the associated benefits outweigh any potential costs.
    546. A 12-year license initial term will provide wireless licensees 
with sufficient time to plan and launch operations. As explained above, 
following the incentive auction, broadcast television licensees will 
have, at most, 39 months to transition off channels that are repurposed 
for flexible use licenses sold at the forward auction. While we expect 
that during that period, 600 MHz Band wireless licensees can plan and 
begin building operations, they will not have unfettered access to the 
repurposed spectrum won at the forward auction until broadcast 
television licensees have ceased operating on those channels. Extending 
the Commission's typical license term by two years, to provide an 
initial license term of 12 years for the 600 MHz Band licenses, is the 
best way to accommodate the necessary broadcast transition while 
retaining the proper incentives for 600 MHz Band licensees to rapidly 
deploy wireless services in the Band.
    547. We decline to adopt alternative proposals by US Cellular. With 
respect to its proposal for 15-year initial license terms, we observe 
that the Post-Auction Transition Period begins prior to wireless 
providers' receiving their licenses. Therefore, a 12-year initial term 
adequately compensates for this transition, but a 15-year initial term 
would be unnecessarily long. With respect to US Cellular's proposal 
that we adopt a 10-year license term, but do not commence the initial 
license term until broadcast television licensees have ceased operating 
on the repurposed spectrum, such a plan would create uncertainty, would 
be difficult to administer, and would be difficult for licensees and 
other interested parties to monitor and implement. In addition, because 
these broadcast television licensees are transitioning off the 
repurposed spectrum on a rolling basis, we see no need to delay 600 MHz 
Band licensees' access until all broadcast operations in the 600 MHz 
Band cease. Moreover, we must issue 600 MHz Band licenses promptly in 
order to fund the TV Broadcaster Relocation Fund that will be used to 
compensate relocating

[[Page 48514]]

broadcast operations. Delaying the start of the initial wireless 
license term until broadcast operations have been cleared could delay 
wireless deployment and undermine the regulatory incentives that our 
policies are intended to foster.
(ii) Performance Requirements
    548. We establish performance requirements to promote the 
productive use of spectrum, to encourage licensees to provide service 
to customers in a timely manner, and to promote the provision of 
innovative services in unserved areas, particularly rural areas. Over 
the years, the Commission has tailored performance and construction 
requirements with an eye to the unique characteristics of individual 
frequency bands and the types of services expected, among other 
factors. The performance requirements we adopt for the 600 MHz Band are 
consistent with those the Commission has adopted for similar spectrum 
bands, while taking into account certain exceptional circumstances 
related to the conduct of the incentive auction, including the timing 
for the transition of this spectrum from broadcast use to flexible 
wireless use. These requirements will ensure that the 600 MHz Band 
spectrum is put to use expeditiously while providing 600 MHz Band 
licensees with flexibility to deploy services according to their 
business plans. Specifically, we adopt the following:
     600 MHz Band interim build-out requirement: Within six (6) 
years of initial license grant, a licensee shall provide reliable 
signal coverage and offer wireless service to at least forty (40) 
percent of the population in each of its license areas.
     600 MHz Band final build-out requirement: Within twelve 
(12) years of initial license grant (or at the end of the license 
term), a licensee shall provide reliable signal coverage and offer 
wireless service to at least seventy-five (75) percent of the 
population in each of its license areas.
    549. We also adopt the following penalties for failing to meet the 
build-out benchmarks:
     Failure to meet 600 MHz Band interim build-out 
requirement: Where a licensee fails to meet the interim build-out 
requirement in any license area, the final build-out requirement and 
initial license term for that license shall be accelerated by two years 
(from 12 to 10).
     Failure to meet 600 MHz Band final build-out requirement: 
Where a licensee fails to meet the final build-out requirement for any 
license area, its authorization for that license area shall terminate 
automatically without further Commission action, and the licensee will 
be unable to regain the license.
    550. We explain below the rationale for and public benefits of 
imposing these performance requirements. Those benefits outweigh any 
perceived costs of adopting performance benchmarks and penalties for 
failure to meet those requirements. We also discuss below how we will 
measure build-out in the Gulf of Mexico.
    551. Population-Based Benchmark, per PEA License Area. Supported by 
a number of comments in the record, we adopt the proposal to use 
objective, population-based interim and final construction benchmarks, 
which will be measured per license area. Requiring 600 MHz Band 
licensees to meet these performance benchmarks will promote rapid 
deployment of new broadband services to the American public, and at the 
same time provide licensees with certainty regarding their construction 
obligations. We agree with CCA and MetroPCS that, for the 600 MHz Band, 
measuring build-out by percentage of population served ``provides a 
clear metric that will promote efficient deployment.''
    552. We are not persuaded by arguments that our build-out 
requirements must be geography-based, or include a geographic 
component, in order to ensure that less densely populated, often rural, 
communities have timely access to the most advanced mobile broadband 
services. We agree that it is important to promote rapid broadband 
deployment in rural areas. In fact, section 309(j)(4)(B) of the 
Communications Act requires that the Commission ``include performance 
requirements, such as appropriate deadlines and penalties for 
performance failures, to ensure prompt delivery of service to rural 
areas.'' Adopting relatively small, PEA service areas, and requiring 
licensees to meet challenging population-based benchmarks in each 
individual license area separately, strikes an appropriate balance 
between providing flexibility to 600 MHz Band licensees to deploy their 
networks in a cost-effective manner and assertively promoting 
deployment of service to less densely populated areas. Therefore, we 
reject commenters' proposals to measure build-out geographically or 
through a combination of population and geography. Our decision to 
require population-based benchmarks in this Band does not foreclose our 
ability to impose geographic-based benchmarks in other spectrum bands 
that may warrant different considerations.
    553. Further, we reject Verizon's request that we measure 
compliance with the interim benchmark in the aggregate, i.e., by 
summing the population of all of a licensee's authorizations in the 600 
MHz Band. Creating benchmarks on a per-license basis, rather than in 
the aggregate, is consistent with our build-out requirements in other, 
similar spectrum bands. In addition, measuring benchmarks on a per-
license basis is consistent with our determination to license service 
on a geographic basis and holds a licensee accountable for meeting 
performance obligations for all of the licenses (including partitioned 
licenses) that it holds. Thus, a per-license approach allows for more 
flexibility and certainty. For example, should a licensee partition 
some of a 600 MHz Band license area, a percentage-based approach would 
apply to each partitioned license. In contrast, it is not clear how the 
responsibility for meeting benchmarks for partitioned and disaggregated 
licenses would be handled under Verizon's proposal.
    554. Interim Benchmark. Requiring an interim milestone is supported 
by the record and serves the public interest. A 40 percent build-out 
per license area benchmark is consistent with the interim benchmarks 
established in other bands and similar to various proposals suggested 
by commenters. Verizon proposes adopting a build-out requirement of 40 
percent of the population within four years. US Cellular suggests we 
require licensees to meet the interim build-out benchmark by covering 
35 percent of the population within five years. Setting the interim 
benchmark of 40 percent at six years addresses commenters' concerns 
over taking into account the broadcast transition.
    555. Several commenters ask that we base our build-out benchmarks 
on the date that the broadcast repacking is completed and the 600 MHz 
Band is cleared. We decline to do so. Instead, the interim build-out 
benchmark is six years from the grant of the license, which should 
adequately account for the Post-Auction Transition Period. Given that 
no broadcast television licensee will be permitted to operate on its 
pre-auction channel after the 39-month Post-Auction Transition Period 
regardless of whether they have completed construction and have begun 
operating on their new channel, 600 MHz Band licensees should have 
sufficient time to deploy their networks to meet the interim benchmark. 
In addition, wireless licensees can make use of the spectrum (for 
testing, etc.) in coordination with broadcast television licensees 
during the 39-month transition period. Further, setting a date certain 
that is tied to initial grant of the 600

[[Page 48515]]

MHz Band license will provide greater certainty to 600 MHz Band 
licensees, their investors, and other interested parties. This does not 
mean, however, that a 600 MHz Band licensee must wait for the entire 
broadcast transition to be completed; a 600 MHz Band licensee can begin 
operating in a specific license area as soon as the broadcast 
television licensees have ceased operations in that license area.
    556. We disagree with the few commenters that argue that interim 
construction benchmarks are unnecessary because licensees already have 
commercial incentives to rapidly deploy their networks. While such 
commercial incentives may exist in many market areas, the per-license 
approach will help to ensure that build-out progresses appropriately in 
all license areas. Some commenters also assert that benchmarks unfairly 
favor large carriers and incumbents because they are able to spread the 
economic construction cost over a greater number of subscribers than 
smaller carriers and new entrants. We disagree. The Commission noted in 
the NPRM that the propagation characteristics of the 600 MHz Band 
should allow for robust coverage at a lower cost than some other 
comparable bands. The interim benchmark we adopt in this Order will 
provide all licensees with an ability to scale networks in a cost 
efficient manner while also ensuring that the vast majority of the 
population will have access to wireless broadband services 
expeditiously.
    557. Further, we reject the proposal of commenters who advocate a 
``substantial service'' standard at the end of the license term as the 
only measurement of performance. Our purpose is to ensure that timely 
and robust build-out occurs in this Band, and for the reasons 
enumerated above, concrete interim and final build-out benchmarks will 
best facilitate meeting this goal. Further, we note that in recent 
decisions, the Commission has replaced the substantial service standard 
with specific interim and final build-out requirements.
    558. Penalty for Failure to Meet the Interim Benchmark. As the 
Commission has done in similar spectrum bands, where a wireless 
licensee fails to meet its interim build-out requirement, we accelerate 
both the time frame to meet the final build-out benchmark and the 
length of the license term by two years. Several commenters agree that 
if a licensee fails to meet the interim build-out requirement, we 
should accelerate the time frame for a licensee's meeting the final 
build-out requirement, with some of those same commenters advocating 
for acceleration of the license term as well. Because the initial 
license term is 12 years, if a licensee fails to meet the interim 
benchmark, it must complete its final build-out requirement within 10 
years, when its license term also expires.
    559. Final Benchmark. Within 12 years of the initial license grant 
(or 10 years if the interim benchmark is not met), a licensee shall 
provide reliable coverage and offer wireless service to at least 75 
percent of the population in each of its license areas. Establishing a 
final build-out benchmark that coincides with the end of the initial 
license term is consistent with how the Commission has formulated 
performance requirements in other spectrum bands. Because we have set 
the interim benchmark at six years and we have created a 12-year 
initial license term, Verizon's suggestion that we establish a seven-
year final build-out requirement is unduly accelerated and we therefore 
decline to adopt it. In addition, the Post-Auction Transition Period 
renders infeasible Cavell, Mertz's suggestion that a 600 MHz Band 
wireless licensee be required to construct its new facilities within a 
year-and-a-half. Under the circumstances, a 12-year construction 
milestone provides a reasonable timeframe for a licensee to deploy its 
network and offer widespread service, provided it meets its interim 
benchmark. Licensees that do not meet the six-year interim benchmark 
must accelerate their final build out by two years to meet the final 
benchmark by the end of their shortened, 10-year license term.
    560. Penalty for Failure to Meet the Final Benchmark. Where a 
licensee fails to meet the final build-out requirement in any PEA, its 
authorization for each PEA in which it fails to meet the requirement 
shall terminate automatically without further Commission action, and 
the licensee will be prohibited from regaining the license. Automatic 
license termination with the inability to regain the license is a 
common remedy for failure to build out part 27 licenses. Terminating 
only the specific licenses where a licensee fails to meet the final 
benchmark will not directly affect a licensee's customers in other 
license areas. Further, as WGAW points out, cancellation of the license 
will free up spectrum to an entity that will more likely develop it. We 
decline to adopt a ``keep-what-you-use'' approach or ``use it or lease 
it'' or ``use it or share it'' as penalties for failure to meet 
construction requirements as some commenters suggest, because these 
proposals may encourage less robust build-out by a licensee that 
decides not to build out to the final benchmark--particularly in rural 
areas.
    561. As a general matter, we expect that 600 MHz Band licensees 
will meet the performance requirements because of the serious 
consequences associated with non-compliance, including automatic 
license cancellation. Further, we expect that licensees' deployment 
will generally exceed the levels set forth in the benchmarks, and that 
these build-out requirements generally represent a floor--not a 
ceiling. As for US Cellular's assertion that automatic termination is 
too punitive, the Commission has previously explained and we state 
again that automatic termination is not overly punitive or unfair if 
robust build-out is to be accomplished. It is noteworthy that the 
Commission has applied this approach to nearly all geographically-
licensed wireless services. Further, the Commission has rejected the 
argument, and we do so again here, that an automatic termination 
penalty would deter capital investment, observing that the wireless 
industry has invested billions of dollars and has flourished under this 
paradigm in other spectrum bands. For the same reason, an automatic 
termination penalty will have little effect on auction participation, 
as suggested by US Cellular. Finally, we do not agree with US Cellular 
that automatic termination harms the public because, even if a customer 
loses service from a provider when it loses spectrum rights for a 
particular license area, alternative providers may be available. We 
also expect that a future licensee may ultimately be able to serve more 
customers for that license area.
    562. Compliance Procedures. Having received no comments on the 
issue, we adopt the proposal in the NPRM to apply to the 600 MHz Band 
the compliance procedures under 47 CFR 1.946(d) of the Commission's 
rules. Specifically, this rule states that licensees must demonstrate 
compliance with their performance requirements by filing a construction 
notification within 15 days of the relevant milestone certifying that 
they have met the applicable performance benchmark. Additionally, 
consistent with other part 27 services, we require that each 
construction notification include electronic coverage maps and 
supporting documentation, which must be truthful and accurate and must 
not omit material information that is necessary for the Commission to 
determine compliance with its performance requirements.
    563. We emphasize that electronic coverage maps must accurately 
depict

[[Page 48516]]

the boundaries of each license area in the licensee's service 
territory. If a licensee does not provide reliable signal coverage to 
an entire PEA, its map must accurately depict the boundaries of the 
area or areas within each PEA not being served. Each licensee also must 
file supporting documentation certifying the type of service it is 
providing for each PEA within its service territory and the type of 
technology used to provide such service. Supporting documentation must 
include the assumptions used to create the coverage maps, including the 
propagation model and the signal strength necessary to provide reliable 
service with the licensee's technology.
    564. The licensee must use the most recently available decennial 
U.S. Census data at the time of measurement to meet the population-
based build-out requirements. Specifically, a licensee must base its 
claims of population served on areas no larger than the Census Tract 
level. To the extent the Census Tract (or other acceptable identifier) 
extends beyond the boundaries of a license area, a licensee with 
authorizations for such areas may only include the population within 
the Census Tract (or other acceptable identifier) towards meeting the 
performance requirement of a single, individual license. This 
requirement tracks the Commission's action requiring broadband service 
providers to report ``snapshots'' of broadband service at the Census 
Tract level twice each year by completing FCC Form 477.
    565. Performance Requirements of Impaired Licenses. As discussed 
above, we plan to offer ``impaired'' licenses in the forward auction, 
i.e., licenses that contain impairments, or areas within the license 
area where a wireless licensee may not be able to provide service 
because it would interfere with a broadcast television licensee's 
coverage area, or conversely, those license areas in which a wireless 
provider may receive harmful interference from remaining television 
operations in or near the 600 MHz Band. It is important to apply the 
same performance requirements to all 600 MHz Band wireless licensees to 
ensure rapid build-out, but we recognize that licensees holding 
impaired licenses may not be able to build out their entire license 
area due to the impairments within a particular geographic service 
area. Thus, for those licensees, 47 CFR 27.14 will similarly apply, but 
a licensee with a geographic service area that includes any impairments 
may meet the build-out benchmarks by providing reliable signal coverage 
and offering service to the relevant percentages of population in the 
service area that is not impaired. To the extent this applies to a 
licensee's particular impaired license, at the relevant construction 
benchmarks, a licensee must provide with its construction notification 
an explanation of why it cannot serve its entire license area and/or 
meet its performance requirements within the entire license area. The 
submission must be truthful and accurate and must not omit material 
information that is necessary for the Commission to determine whether 
the licensee could have reasonably met its performance requirements for 
its entire license area.
    566. Gulf of Mexico. Having received no comments on Gulf of Mexico 
performance requirements, and recognizing that we are licensing 
wireless service in the Gulf as a specified PEA, we adopt the same 
coverage requirements as set forth above, with one exception: we will 
calculate ``population'' pursuant to the approach taken in Small 
Ventures USA, LP and Cellco Partnership d/b/a Verizon Wireless Request 
for Waiver and Applications for Assignment of 700 MHz C Block License, 
WT Docket No. 12-373, Memorandum Opinion and Order, 28 FCC Rcd 6569 
(2013). In that order, the Wireless Bureau recognized that using the 
conventional Census Tract methodology for determining population in the 
Gulf of Mexico would be infeasible because the Gulf consists of a body 
of water with non-permanent, mobile residents. Consistent with that 
order, we allow a Gulf of Mexico licensee to use all off-shore 
platforms, including production, manifold, compression, pumping and 
valving platforms as a proxy for population in the Gulf of Mexico for 
purposes of meeting build-out obligations. Thus, in lieu of measuring 
its build-out obligations based on population, a licensee serving the 
Gulf of Mexico shall within six years provide reliable signal coverage 
and offer wireless service to at least 40 percent of all off-shore 
platforms in its license area and within 12 years (or at the end of the 
license term), provide reliable signal coverage and offer wireless 
service to at least 75 percent of all off-shore platforms in its 
license area in the Gulf of Mexico. All penalties and other compliance 
procedures we adopt, excluding those discussing the methodology for 
meeting population-based build-out requirements, shall apply to a 600 
MHz Band licensee with respect to its Gulf of Mexico license.
(iii) Renewal Criteria
    567. Pursuant to section 308(b) of the Communications Act, we will 
require 600 MHz Band licensees seeking license renewal to file renewal 
applications; below, we specify the information that renewal applicants 
must provide to enable the Commission to assess whether renewal is 
warranted and in the public interest. In addition, where a license is 
not renewed, the associated spectrum will be returned to the Commission 
and made available for assignment. Filing competing applications 
against license renewal applications is not permitted.
    568. We apply to 600 MHz Band licensees the same renewal showing 
requirements we recently adopted for the AWS-3 Band. Specifically, a 
600 MHz Band licensee's renewal showing must provide a detailed 
description of its provision of service during the entire license 
period and discuss: (1) the level and quality of service provided 
(including the population served, the area served, the number of 
subscribers, and the services offered); (2) the date service commenced, 
whether service was ever interrupted, and the duration of any 
interruption or outage; (3) the extent to which service is provided to 
rural areas; (4) the extent to which service is provided to qualifying 
tribal land as defined in 47 CFR 1.2110(f)(3)(i) of the Commission's 
rules; and (5) any other factors associated with the level of service 
to the public. Accordingly, we hereby modify 47 CFR 27.14 of the 
Commission's rules to apply these renewal showing criteria to the 600 
MHz Band.
    569. The renewal requirements we establish for 600 MHz Band 
licensees are in the public interest and their benefits outweigh any 
likely costs. In recent years, the Commission has refined its license 
renewal policies--beginning with the 700 MHz First Report and Order, 
and most recently in the AWS-3 Report and Order. (See Service Rules for 
the 698-806 MHz Band and Revision of the Commission's Rules Regarding 
Enhanced 911 Emergency Calling Systems, Hearing Aid-Compatible 
Telephones, and Public Safety Spectrum Requirements, 72 FR 27688 (2007) 
(700 MHz First Report and Order); Commercial Operations in the 1695-
1710 MHz, 1755-1780 MHz, and 2155-2180 MHz Bands, 79 FR 32366 (2014) 
(AWS-3 Report and Order)). Through these actions, the Commission has 
refined its license renewal policies--beginning with the 700 MHz First 
Report and Order in 2007, and most recently in the AWS-3 Report and 
Order. Through these actions, the Commission established that licensees 
must demonstrate that they are providing adequate levels of service 
over the course of their license terms,

[[Page 48517]]

and here we act consistently with that policy. Consequently, we agree 
with those commenters who support adopting renewal criteria for the 600 
MHz Band that are based on those criteria adopted in the 700 MHz First 
Report and Order and that were similarly followed in the AWS-4 Report 
and Order (Service Rules for Advanced Wireless Services in the 2000-
2020 MHz and 2180-2200 MHz Bands, 78 FR 8230 (2013)) the H Block Report 
and Order (Service Rules for Advanced Wireless Services H Block--
Implementing Section 6401 of the Middle Class Tax Relief and Job 
Creation Act of 2012 Related to the 1915-1920 MHz and 1995-2000 MHz 
Bands, 78 FR 50214 (2013)) and the AWS-3 Report and Order. These 
renewal requirements will provide licensees certainty regarding the 
factors that the Commission will consider during the renewal process, 
thereby facilitating investment decisions regarding broadband rollout. 
Further, adopting clear requirements address US Cellular's concern that 
the renewal process not be unnecessarily burdensome to licensees or 
that the process not deter investment.
    570. In adopting these criteria, we decline to adopt at this time 
US Cellular's proposal to categorically provide licensees a renewal 
expectancy if they meet their performance requirements. US Cellular 
claims that renewal expectancies, based solely on performance 
requirements, would provide certainty to licensees and investors. As 
the Commission has consistently stated, performance and renewal 
showings are distinct; they serve different purposes and, if not met, 
the Commission may apply different penalties. A performance showing 
provides a snapshot in time of the level of a licensee's service, 
whereas a renewal showing provides information regarding the level and 
types of service provided over the course of a license term. Where a 
licensee meets the applicable performance requirements, but fails to 
provide continuity of service (by, for example, repeatedly 
discontinuing operations between required performance showings for 
periods of less than 180 days), the Commission could find that renewal 
would be contrary to the public interest. Where a licensee fails to 
meet its interim build-out requirement and becomes subject to a two-
year acceleration of both its final build-out requirement and its 
license term, its final performance showing might merely reflect a 
snapshot in time of compliance with the performance requirements. By 
contrast, its renewal application must provide a timeline of its 
provision of service, the percentage of the license-area population 
covered, and types of service provided over the course of the license 
term, including any efforts to meet the interim build-out requirement.
    571. For subsequent license terms, licensees are likely--absent 
extraordinary circumstances--to obtain license renewal if they submit 
satisfactory showings demonstrating that they have maintained or 
exceeded the level of coverage and service required at the final build-
out benchmark (during the initial license term) and otherwise comply 
with Commission rules and policies and the Communications Act.
    572. Finally, we reject US Cellular's proposal that we permit 
competing renewal applications. Rather, we agree with Verizon that the 
Commission need not permit competing renewal applications or 
comparative hearings to evaluate an application for license renewal. 
The renewal requirements we adopt in this Order will provide Commission 
staff with ample information to determine whether license renewal would 
serve the public interest. The public interest would be ill-served by 
permitting the filing of potentially time-consuming and costly 
competing applications.
(iv) Permanent Discontinuance of Operations
    573. Section 1.955(a)(3) of the Commission's rules will apply to 
600 MHz Band licensees because the benefits of applying this rule 
outweigh any potential costs of doing so. Notably, we received no 
comments on the permanent discontinuance proposals. Therefore, a 
licensee's 600 MHz Band authorization will automatically terminate, 
without specific Commission action, if service is ``permanently 
discontinued.''
    574. In accordance with the proposal in the NPRM, for providers 
that identify their regulatory status as common carrier or non-common 
carrier, we define ``permanently discontinued'' as a period of 180 
consecutive days during which the licensee does not provide service to 
at least one subscriber that is not affiliated with, controlled by, or 
related to, the provider in the individual license area (or smaller 
service area in the case of a partitioned license). We adopt a 
different approach for wireless licensees that use their licenses for 
private, internal communications, however, because such licensees 
generally do not provide service to unaffiliated subscribers. For such 
private, internal communications, we define ``permanent 
discontinuance'' as a period of 180 consecutive days during which the 
licensee does not operate. Finally, as the Commission has previously 
explained, the operation of so-called channel keepers, e.g., devices 
that transmit test signals, tones, and/or color bars, do not constitute 
``operation'' under 47 CFR 1.955(a)(3) or the Commission's other 
permanent discontinuance rules.
    575. A licensee will not be subject to the discontinuance rules 
until the date it must meet its interim build-out requirement, thereby 
negating the possibility that a licensee will lose its license if it 
chooses to construct early, but may discontinue operations before the 
interim build-out benchmark date. The permanent discontinuance rules 
will apply thereafter, to include any subsequent license renewal term.
    576. This approach is consistent with the discontinuance rules 
applied to similar wireless services. Using this approach for the 600 
MHz Band also strikes the appropriate balance between affording 
licensees operational flexibility and ensuring that licensed spectrum 
is efficiently utilized.
    577. Furthermore, in accordance with 47 CFR 1.955(a)(3) of the 
Commission's rules, if a licensee permanently discontinues service, the 
licensee must notify the Commission of the discontinuance within 10 
days by filing FCC Form 601 or 605 and requesting license cancellation. 
As explained above, even if the licensee fails to notify the 
Commission, an authorization will automatically terminate without 
specific Commission action if service is permanently discontinued.
d. Secondary Markets
(i) Qualifications Under Section 6004
    578. The Commission previously adopted rule 47 CFR 27.12(b), which 
restricts entities from holding licenses if they have been barred by a 
federal agency for reasons of national security, in accordance with 
section 6004 of the Spectrum Act. Because that rule implements a 
statutory provision that applies to all spectrum bands covered under 
the Spectrum Act, 47 CFR 27.12(b) also applies to the 600 MHz Band. 
Further, we received no comments opposing or supporting applying 
Section 6004 to secondary market transactions that include 600 MHz Band 
licenses. Thus, consistent with the purpose of the statute, we require 
applicants to certify in an application seeking approval of a secondary 
market transaction involving 600 MHz Band licenses that neither the 
applicants nor any party to the

[[Page 48518]]

application are persons barred from participating in an auction under 
Section 6004 of the Spectrum Act.
(ii) Partitioning and Disaggregation
    579. We adopt the part 27 partitioning and disaggregation rules for 
the 600 MHz Band. Very few commenters discuss partitioning and 
disaggregation, but those who do support this approach. Permitting 
partitioning and disaggregation is in the public interest, and based on 
our examination of the record, the associated benefits would outweigh 
any potential costs. We agree with Verizon that applying these rules 
``promotes a robust secondary market in spectrum'' and ``facilitates 
acquisition of spectrum rights by smaller carriers who may serve small, 
targeted markets,'' thus allowing for new entrants and promoting 
competition. Further, permitting disaggregation and partitioning will 
help facilitate investment and rapid deployment in the 600 MHz Band, 
while giving licensees flexibility to use the spectrum to meet changing 
market demand. As the Commission noted when it first adopted 
partitioning and disaggregation rules, allowing this type of 
flexibility can facilitate the efficient use of spectrum, and expedite 
provision of services in areas that might not otherwise receive service 
in the near term.
    580. As proposed in the NPRM, and consistent with the treatment of 
other part 27 services, a partitionee or disaggregatee will hold its 
license for the remainder of the partitioner's or disaggregator's 
license term. In addition, any 600 MHz Band licensee that is a party to 
a partitioning or disaggregation arrangement (or combination of both) 
must independently meet the applicable 600 MHz Band technical rules and 
regulatory requirements, including performance and renewal 
requirements. As the Commission has previously observed, this approach 
should facilitate efficient spectrum usage and prevent licensees from 
avoiding construction obligations by participating in secondary market 
transactions, while still providing operators with the flexibility to 
design their networks according to their operation and business needs.
(iii) Spectrum Leasing
    581. We adopt the same spectrum leasing policies and rules that 
apply to other part 27 services. Commenters that discuss spectrum 
leasing support the proposals made in the NPRM and agree that adopting 
spectrum leasing rules will promote the public interest. For example, 
CTIA notes that ``the Commission's leasing policies have brought 
licensees much-needed flexibility in managing their networks, and have 
enabled innovative service and market entry by new competitors.'' Our 
secondary markets policies are designed to promote more efficient, 
innovative, and dynamic use of the spectrum, expand the scope of 
available wireless services and devices, enhance economic opportunities 
for accessing spectrum, and promote competition among providers. 
Likewise, allowing spectrum leasing in the 600 MHz Band will serve 
these same purposes. In other part 27 services spectrum leasing 
policies generally follow the same approach as the partitioning and 
disaggregation policies for the band.'' Thus, our decision to permit 
spectrum leasing in the 600 MHz Band is consistent with our 
determination to permit partitioning and disaggregation in the 600 MHz 
Band and with our existing part 27 spectrum leasing policies.
e. Other Operating Requirements
    582. Although we primarily adopt rules for the 600 MHz Band under 
part 27 of the Commission's rules, we also require 600 MHz Band 
licensees to comply with certain other rule parts that pertain 
generally to wireless communication services. This approach will 
maintain general consistency among various wireless communications 
services. We received no comments on the NPRM proposal. Section 27.3 of 
the Commission's rules lists some of the rule parts applicable to 
wireless communications services licensees. In addition, other FCC 
rules may apply to 600 MHz Band licensees, including those that apply 
only to certain licensees, depending on the specific type of service or 
services that a particular licensee provides. Thus, it is appropriate 
to apply 47 CFR 27.3, as well as similar rules applicable to wireless 
communications service licensees, to 600 MHz Band licensees. In so 
doing, we will maintain consistency among various wireless 
communications services--including the 600 MHz Band--which will best 
serve the public interest. For these same reasons, the benefits of this 
approach outweigh any potential costs.

VI. Procedural Matters

A. Final Regulatory Flexibility Analysis

    583. As required by the Regulatory Flexibility Act of 1980, as 
amended (RFA), an Initial Regulatory Flexibility Analysis (``IRFA'') 
was incorporated in the Notice of Proposed Rule Making (``Notice'' or 
``NPRM''). The Commission sought written public comment on the 
proposals in the Notice, including comment on the IRFA. Because we 
amend the rules in this Order, we have included this Final Regulatory 
Flexibility Analysis (``FRFA'') which conforms to the RFA.
1. Need for, and Objectives of, the Report and Order
    584. In 2012, Congress mandated that the Commission conduct an 
incentive auction of broadcast television spectrum as set forth in the 
Middle Class Tax Relief and Job Creation Act of 2012 (``Spectrum 
Act''). Congress's passage of the Spectrum Act set the stage for this 
proceeding and further expanded the Commission's ability to facilitate 
technological and economic growth. The Spectrum Act authorizes the 
Commission to conduct incentive auctions in which licensees may 
voluntarily relinquish their spectrum usage rights in order to permit 
the assignment by auction of new initial licenses subject to flexible 
use service rules, in exchange for a portion of the resulting auction 
proceeds. Section 6403 of the Spectrum Act requires the Commission to 
conduct an incentive auction of the broadcast television spectrum and 
includes specific requirements and safeguards for the required auction.
    585. The incentive auction will have three major pieces: (1) A 
``reverse auction'' in which full power and Class A broadcast 
television licensees submit bids to voluntarily relinquish certain 
broadcast rights in exchange for payments; (2) a reorganization or 
``repacking'' of the broadcast television bands in order to free up a 
portion of the ultra-high frequency (``UHF'') band for other uses; and 
(3) a ``forward auction'' of licenses for flexible use of the newly 
available spectrum.
    586. In order to implement this congressional mandate to conduct an 
incentive auction of broadcast television spectrum, the Order adopts an 
auction design framework and rules for competitive bidding to govern 
the reverse auction, and modifies the Commission's general competitive 
bidding rules in Part 1 in order to conduct the related forward auction 
for new spectrum licenses. The other major component of the incentive 
auction, the repacking process, will help to determine which reverse 
auction bids will be accepted. In addition, consistent with the 
Commission's typical approach to spectrum license auctions, the adopted 
rules and Part 1 rule revisions provide a general framework to guide 
the development of the detailed procedures and deadlines needed to 
conduct the auction. A public notice

[[Page 48519]]

process will allow both the Commission and interested parties to focus 
on and provide input regarding discrete details of the auction design 
and the auction procedures.
    587. In the 600 MHz Band Plan that the Commission adopts, existing 
channel 37 operations remain allocated for use by radio astronomy and 
medical telemetry equipment. Depending on the amount of spectrum 
recovered from the repacking process, the 600 MHz downlink band could 
be situated on one or both sides of channel 37. For any band plan 
configurations where wireless downlink blocks are adjacent to channel 
37 services, the Commission adopts technically reasonable guard bands 
between the blocks and channel 37. This band plan will allow for 
maximum flexibility in clearing spectrum while sufficiently protecting 
incumbent services and new wireless operations.
    588. To encourage entry by providers, including small providers, 
that contemplate offering wireless broadband service on a localized 
basis, yet at the same time not precluding carriers that plan to 
provide service on a much larger geographic scale, the Commission will 
license the 600 MHz Band on the basis of Partial Economic Areas 
(``PEAs''), a subdivision of Economic Areas (``EAs'') created by 
grouping areas using Metropolitan Statistical Area (``MSA'') 
boundaries, updated with 2010 U.S. Census data for each county. The 
Commission concludes that licensing on a PEA basis will best promote 
entry into the market by the broadest range of potential wireless 
service providers without unduly complicating the auction, thereby 
promoting competition. Moreover, the Commission concludes that 
licensing using PEAs throughout the country strikes the appropriate 
balance and will allow both smaller and larger wireless carriers to 
obtain licenses that best align with their respective business plans. 
In addition, because the MSA boundaries may more closely fit many 
wireless providers' existing footprints--in particular, smaller, non-
nationwide providers--adopting this geographic licensing approach 
should provide a greater opportunity for all wireless providers to 
acquire spectrum licenses in their service areas.
    589. To enable repacking of the broadcast spectrum, it is critical 
that the Commission determine how to preserve the coverage area and 
population served of full power and Class A stations as required by the 
Spectrum Act. Accordingly, the Commission adopts rules on engineering 
and other technical aspects of the repacking process, in particular 
Congress's mandate in section 6403(b)(2) of the Spectrum Act that it 
make all reasonable efforts to preserve the coverage area and 
population served of full power and Class A television stations in the 
repacking.
    590. The broadcast television spectrum incentive auction and the 
associated repacking process could impact both the coverage area and 
the population served of full power and Class A television stations. If 
a station is assigned to a different channel, its technical facilities 
must be modified to preserve its coverage area because radio signals 
propagate differently on different frequencies. These varying 
propagation characteristics also mean that a new channel assignment may 
change the areas within a station's noise-limited service area affected 
by terrain loss. Channel reassignments, and stations going off the air 
as a result of the reverse auction, also may change the interference 
relationships between stations, which in turn affect population served. 
Stations going off the air can eliminate existing interference to the 
stations that remain on the air. Likewise, new channel assignments 
generally will eliminate interference that the reassigned stations are 
now causing or receiving. At the same time, new channel assignments 
create a potential for new interference between nearby stations on the 
same channel or an adjacent channel. The Commission adopts a repacking 
methodology that takes in account all of these impacts in order to 
carry out Congress's mandate in section 6403(b)(2) of the Spectrum Act.
    591. The Commission recognizes that low power television (``LPTV'') 
and television translator (``TV translator'') stations may be impacted 
by repacking. These stations are not permitted to participate in the 
reverse auction. Moreover, these stations have only secondary 
interference protection rights and will not be protected during 
repacking. Many of these stations may be displaced from their current 
operating channel. To ease the burden on these stations, the Commission 
will allow displaced LPTV and TV translator stations to have the 
opportunity to submit a displacement application and propose a new 
operating channel. The Commission also will allow LPTV and TV 
translator stations to explore engineering solutions or agree on a 
settlement to resolve mutually exclusive displacement applications. In 
cases where stations do not resolve mutually exclusive displacement 
applications, the Commission will grant selection priority to the 
licensees of any displaced digital replacement translators (``DRTs''), 
and only after this priority will the Commission use an auction to 
resolve remaining displacement groups. The Commission also intends to 
initiate a rulemaking proceeding to consider additional means to 
mitigate the potential impact of the incentive auction and the 
repacking process on LPTV and TV translator stations.
    592. Following the conclusion of the incentive auction, the 
transition to the reorganized UHF band will be as rapid as possible 
without causing unnecessary disruption. Television stations that 
voluntarily turn in their licenses or agree to channel share must 
transition from their pre-auction channels within three months of 
receiving their reverse auction payments. The time required for 
stations reassigned to a new channel to modify their facilities will 
vary, so the Commission will tailor their construction deadlines to 
their situations. Consistent with Congress's mandate, the Commission 
establishes procedures to reimburse costs reasonably incurred by 
stations that are involuntarily reassigned to new channels, as well as 
by multichannel video programming distributors (``MVPDs'') to continue 
to carry stations reassigned to new channels. Other incumbents must 
also transition from the repurposed 600 MHz Band, including the guard 
bands. The Commission establishes procedures and deadlines for the 
transition of the following services: LPTV and TV translator stations; 
Broadcast Auxiliary Services (``BAS''); television white space devices; 
low power auxiliary stations (``LPAS'') and unlicensed wireless 
microphones; and wireless assist video devices.
    593. In addition to repurposing UHF spectrum for new licensed uses, 
the Commission makes a significant amount of spectrum available for 
unlicensed use, a large portion of it on a nationwide basis. To prevent 
harmful interference between licensed services, the 600 MHz Band Plan 
includes a number of guard bands, which the Commission intends to make 
available for use by unlicensed devices. Moreover, the Commission will 
allow unlicensed use of channel 37, subject to the development of the 
appropriate technical parameters to protect the incumbent Wireless 
Medical Telemetry Service (``WMTS'') and Radio Astronomy Service 
(``RAS'') from harmful interference, and allow television white space 
devices as well as wireless microphones to operate on any unused 
television channels in a market following the incentive auction. The 
Commission also intends to designate one unused channel in each area 
following the repacking process for use by wireless microphones and 
television white space devices.

[[Page 48520]]

    594. The Commission also adopts measures to facilitate wireless 
microphone use of available spectrum in the reorganized UHF band. With 
regard to the 600 MHz Band, the Commission will allow broadcasters and 
cable programming networks to operate licensed wireless microphones in 
a portion of the duplex gap. In addition, the Commission will permit 
other wireless microphones to operate in the guard bands on an 
unlicensed basis. The Commission will initiate a proceeding to adopt 
technical standards to govern these uses. With regard to the remaining 
television spectrum, while there may no longer be two unused channels 
for wireless microphones in markets where those channels are currently 
used for that purpose, the Commission intends to designate one unused 
channel in each area following the auction for use by wireless 
microphones and television white space devices. The Commission also 
revises the rules for co-channel operations in the post-auction 
television bands to expand the areas where wireless microphones may 
operate. The Commission will initiate a proceeding in the near future 
to find additional spectrum for wireless microphone users in other 
spectrum bands in order to help address their long-term needs.
2. Summary of Significant Issues Raised by Public Comments in Response 
to the IRFA
    595. No commenters directly responded to the IRFA. However, a 
number of commenters raised concerns about the impact on small 
businesses of various auction design issues. We have nonetheless 
addressed these concerns in the FRFA.
3. Description and Estimate of the Number of Small Entities to Which 
the Rules Will Apply
    596. The RFA directs the Commission to provide a description of 
and, where feasible, an estimate of the number of small entities that 
will be affected by the adopted rules, if adopted. The RFA generally 
defines the term ``small entity'' as having the same meaning as the 
terms ``small business,'' small organization,'' and ``small government 
jurisdiction.'' In addition, the term ``small business'' has the same 
meaning as the term ``small business concern'' under the Small Business 
Act. A small business concern is one which: (1) Is independently owned 
and operated; (2) is not dominant in its field of operation; and (3) 
satisfies any additional criteria established by the SBA.
    597. Television Broadcasting. This economic census category 
``comprises establishments primarily engaged in broadcasting images 
together with sound. These establishments operate television 
broadcasting studios and facilities for the programming and 
transmission of programs to the public.'' The SBA has created the 
following small business size standard for Television Broadcasting 
firms: Those having $14 million or less in annual receipts. The 
Commission has estimated the number of licensed commercial television 
stations to be 1,388. In addition, according to Commission staff review 
of the BIA Advisory Services, LLC's Media Access Pro Television 
Database on March 28, 2012, about 950 of an estimated 1,300 commercial 
television stations (or approximately 73 percent) had revenues of $14 
million or less. We therefore estimate that the majority of commercial 
television broadcasters are small entities.
    598. We note, however, that in assessing whether a business concern 
qualifies as small under the above definition, business (control) 
affiliations must be included. Our estimate, therefore, likely 
overstates the number of small entities that might be affected by our 
action because the revenue figure on which it is based does not include 
or aggregate revenues from affiliated companies. In addition, an 
element of the definition of ``small business'' is that the entity not 
be dominant in its field of operation. We are unable at this time to 
define or quantify the criteria that would establish whether a specific 
television station is dominant in its field of operation. Accordingly, 
the estimate of small businesses to which rules may apply does not 
exclude any television station from the definition of a small business 
on this basis and is therefore possibly over-inclusive to that extent.
    599. In addition, the Commission has estimated the number of 
licensed noncommercial educational (``NCE'') television stations to be 
396. These stations are non-profit, and therefore considered to be 
small entities.
    600. There are also 2,414 LPTV stations, including Class A 
stations, and 4,046 TV translator stations. Given the nature of these 
services, we will presume that all of these entities qualify as small 
entities under the above SBA small business size standard.
    601. Cable Television Distribution Services. Since 2007, these 
services have been defined within the broad economic census category of 
Wired Telecommunications Carriers; that category is defined as follows: 
``This industry comprises establishments primarily engaged in operating 
and/or providing access to transmission facilities and infrastructure 
that they own and/or lease for the transmission of voice, data, text, 
sound, and video using wired telecommunications networks. Transmission 
facilities may be based on a single technology or a combination of 
technologies.'' The SBA has developed a small business size standard 
for this category, which is: All such firms having 1,500 or fewer 
employees. Census data for 2007 shows that there were 3,188 firms that 
operated for the duration of that year. Of those, 3,144 had fewer than 
1000 employees, and 44 firms had more than 1000 employees. Thus under 
this category and the associated small business size standard, the 
majority of such firms can be considered small.
    602. Cable Companies and Systems. The Commission has also developed 
its own small business size standards, for the purpose of cable rate 
regulation. Under the Commission's rules, a ``small cable company'' is 
one serving 400,000 or fewer subscribers, nationwide. Industry data 
indicate that, of approximately 1,100 cable operators nationwide, all 
but 10 are small under this size standard. In addition, under the 
Commission's rules, a ``small system'' is a cable system serving 15,000 
or fewer subscribers. Industry data indicate that, of 6,635 systems 
nationwide, 5,802 systems have fewer than 10,000 subscribers, and an 
additional 302 systems have 10,000-19,999 subscribers. Thus, under this 
second size standard, most cable systems are small.
    603. Cable System Operators. The Communications Act of 1934, as 
amended, also contains a size standard for small cable system 
operators, which is ``a cable operator that, directly or through an 
affiliate, serves in the aggregate fewer than 1 percent of all 
subscribers in the United States and is not affiliated with any entity 
or entities whose gross annual revenues in the aggregate exceed 
$250,000,000.'' The Commission has determined that an operator serving 
fewer than 677,000 subscribers shall be deemed a small operator, if its 
annual revenues, when combined with the total annual revenues of all 
its affiliates, do not exceed $250 million in the aggregate. Industry 
data indicate that, of 1,100 cable operators nationwide, all but ten 
are small under this size standard. We note that the Commission neither 
requests nor collects information on whether cable system operators are 
affiliated with entities whose gross annual revenues exceed $250 
million, and therefore we are unable to estimate more accurately the 
number of cable system operators that would qualify as small under this 
size standard.

[[Page 48521]]

    604. Direct Broadcast Satellite (``DBS'') Service. DBS service is a 
nationally distributed subscription service that delivers video and 
audio programming via satellite to a small parabolic ``dish'' antenna 
at the subscriber's location. DBS, by exception, is now included in the 
SBA's broad economic census category, Wired Telecommunications 
Carriers, which was developed for small wireline firms. Under this 
category, the SBA deems a wireline business to be small if it has 1,500 
or fewer employees. To gauge small business prevalence for the DBS 
service, the Commission relies on data currently available from the 
U.S. Census for the year 2007. According to that source, there were 
3,188 firms that in 2007 were Wired Telecommunications Carriers. Of 
these, 3,144 operated with less than 1,000 employees, and 44 operated 
with more than 1,000 employees. However, as to the latter 44 there is 
no data available that shows how many operated with more than 1,500 
employees. Based on this data, the majority of these firms can be 
considered small. Currently, only two entities provide DBS service, 
which requires a great investment of capital for operation: DIRECTV and 
EchoStar Communications Corporation (``EchoStar'') (marketed as the 
DISH Network). Each currently offers subscription services. DIRECTV and 
EchoStar each report annual revenues that are in excess of the 
threshold for a small business. Because DBS service requires 
significant capital, we believe it is unlikely that a small entity as 
defined by the SBA would have the financial wherewithal to become a DBS 
service provider.
    605. Cable and Other Subscription Programming. This industry 
comprises establishments primarily engaged in operating studios and 
facilities for the broadcasting of programs on a subscription or fee 
basis. The broadcast programming is typically narrowcast in nature 
(e.g., limited format, such as news, sports, education, or youth-
oriented). These establishments produce programming in their own 
facilities or acquire programming. The programming material is usually 
delivered to a third party, such as cable systems or direct-to-home 
satellite systems, for transmission to viewers. The SBA size standard 
for this industry establishes as small any company in this category 
which receives annual receipts of $35.5 million or less. Based on U.S. 
Census data for 2007, in that year 659 establishments operated for the 
entire year. Of that 659, 197 operated with annual receipts of $10 
million a year or more. The remaining 462 establishments operated with 
annual receipts of less than $10 million. Based on this data, the 
Commission estimates that the majority of establishments operating in 
this industry are small.
    606. Radio and Television Broadcasting and Wireless Communications 
Equipment Manufacturing. The Census Bureau defines this category as 
follows: ``This industry comprises establishments primarily engaged in 
manufacturing radio and television broadcast and wireless 
communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment.'' The SBA has developed a small business size 
standard for Radio and Television Broadcasting and Wireless 
Communications Equipment Manufacturing, which is: All such firms having 
750 or fewer employees. According to Census Bureau data for 2007, there 
were a total of 939 establishments in this category that operated for 
part or all of the entire year. Of this total, 912 had less than 500 
employees and 17 had more than 1000 employees. Thus, under that size 
standard, the majority of firms can be considered small.
    607. Audio and Video Equipment Manufacturing. The SBA has 
classified the manufacturing of audio and video equipment under in 
NAICS Codes classification scheme as an industry in which a 
manufacturer is small if it has less than 750 employees. Data contained 
in the 2007 U.S. Census indicate that 492 establishments operated in 
that industry for all or part of that year. In that year, 488 
establishments had fewer than 500 employees; and only 1 had more than 
1000 employees. Thus, under the applicable size standard, a majority of 
manufacturers of audio and video equipment may be considered small.
    608. Wireless Telecommunications Carriers (except satellite). The 
Census Bureau defines this category as follows: ``This industry 
comprises establishments engaged in operating and maintaining switching 
and transmission facilities to provide communications via the airwaves. 
Establishments in this industry have spectrum licenses and provide 
services using that spectrum, such as cellular phone services, paging 
services, wireless Internet access, and wireless video services.'' The 
appropriate size standard under SBA rules is for the category Wireless 
Telecommunications Carriers (except Satellite). The size standard for 
that category is that a business is small if it has 1,500 or fewer 
employees. For this category, census data for 2007 show that there were 
1,383 firms that operated for the entire year. Of this total, 1,368 
firms had employment of 999 or fewer employees and 15 had employment of 
1000 employees or more. Similarly, according to Commission data, 413 
carriers reported that they were engaged in the provision of wireless 
telephony, including cellular service, PCS, and Specialized Mobile 
Radio (``SMR'') Telephony services. Of these, an estimated 261 have 
1,500 or fewer employees and 152 have more than 1,500 employees. 
Consequently, the Commission estimates that approximately half or more 
of these firms can be considered small. Thus, using available data, we 
estimate that the majority of wireless firms can be considered small.
    609. Manufacturers of unlicensed devices. In the context of this 
FRFA, manufacturers of Part 15 unlicensed devices that are operated in 
the UHF-TV band (channels 14-51) for wireless data transfer fall into 
the category of Radio and Television and Wireless Communications 
Equipment Manufacturing. The Census Bureau defines this category as 
follows: ``This industry comprises establishments primarily engaged in 
manufacturing radio and television broadcast and wireless 
communications equipment. Examples of products made by these 
establishments are: Transmitting and receiving antennas, cable 
television equipment, GPS equipment, pagers, cellular phones, mobile 
communications equipment, and radio and television studio and 
broadcasting equipment.'' The SBA has developed the small business size 
standard for this category as firms having 750 or fewer employees. 
According to Census Bureau data for 2007, there were a total of 939 
establishments in this category that operated for the entire year. Of 
this total, 912 had less than 500 employees and 17 had more than 1000 
employees. Thus, under that size standard, the majority of firms can be 
considered small.
    610. Personal Radio Services/Wireless Medical Telemetry Service 
(``WMTS''). Personal radio services provide short-range, low power 
radio for personal communications, radio signaling, and business 
communications not provided for in other services. The Personal Radio 
Services include spectrum licensed under Part 95 of our rules. These 
services include Citizen Band Radio Service (``CB''), General Mobile 
Radio Service (``GMRS''), Radio Control Radio

[[Page 48522]]

Service (``R/C''), Family Radio Service (``FRS''), Wireless Medical 
Telemetry Service (``WMTS''), Medical Implant Communications Service 
(``MICS''), Low Power Radio Service (``LPRS''), and Multi-Use Radio 
Service (``MURS''). There are a variety of methods used to license the 
spectrum in these rule parts, from licensing by rule, to conditioning 
operation on successful completion of a required test, to site-based 
licensing, to geographic area licensing. Under the RFA, the Commission 
is required to make a determination of which small entities are 
directly affected by the rules adopted. Since all such entities are 
wireless, we apply the definition of Wireless Telecommunications 
Carriers (except Satellite), pursuant to which a small entity is 
defined as employing 1,500 or fewer persons. For this category, census 
data for 2007 show that there were 1,383 firms that operated for the 
entire year. Of this total, 1,368 firms had employment of 999 or fewer 
employees and 15 had employment of 1000 employees or more. Thus under 
this category and the associated small business size standard, the 
Commission estimates that the majority of personal radio service and 
WMTS providers are small entities.
    611. However, we note that many of the licensees in these services 
are individuals, and thus are not small entities. In addition, due to 
the mostly unlicensed and shared nature of the spectrum utilized in 
many of these services, the Commission lacks direct information upon 
which to base a more specific estimation of the number of small 
entities under an SBA definition that might be directly affected by our 
action.
    612. Radio Astronomy. The Commission has not developed a definition 
for radio astronomy. However the SBA has established a category into 
which Radio Astronomy fits, which is: All Other Telecommunications. 
This industry ``comprises establishments primarily engaged in providing 
specialized telecommunications services, such as satellite tracking, 
communications telemetry, and radar station operation. This industry 
also includes establishments primarily engaged in providing satellite 
terminal stations and associated facilities connected with one or more 
terrestrial systems and capable of transmitting telecommunications to, 
and receiving telecommunications from, satellite systems. 
Establishments providing Internet services or voice over Internet 
protocol (``VoIP'') services via client-supplied telecommunications 
connections are also included in this industry.'' The size standard for 
all establishments engaged in this industry is that annual receipts of 
$30 million or less establish the firm as small. Based on data in the 
2007 U.S. Census, in 2007 there were 2,623 establishments that operated 
for the entire year in the All Other Telecommunications category. Of 
those, 145 establishments operated with annual receipts of more than 
$10 million per year. The remaining 2,478 establishments operated with 
annual receipts of less than $10 million per year. Based on this data, 
the Commission estimates that the majority of establishments in the All 
Other Telecommunications category are small.
    613. Motion Picture and Video Production. The Census Bureau defines 
this category as follows: ``This industry comprises establishments 
primarily engaged in producing, or producing and distributing motion 
pictures, videos, television programs, or television commercials.'' The 
SBA has developed a small business size standard for this category, 
which is: All such businesses having $30 million dollars or less in 
annual receipts. Census data for 2007 show that there were 9,478 
establishments that operated that year. Of that number, 9,128 had 
annual receipts of $24,999,999 or less, and 350 had annual receipts 
ranging from not less than $25,000,000 to $100,000,000 or more. Thus, 
under this size standard, the majority of such businesses can be 
considered small entities.
    614. Fixed Microwave Services. Microwave services include common 
carrier, private-operational fixed, and broadcast auxiliary radio 
services. At present, there are approximately 31,549 common carrier 
fixed licensees and 89,633 private and public safety operational-fixed 
licensees and broadcast auxiliary radio licensees in the microwave 
services. Microwave services include common carrier, private-
operational fixed, and broadcast auxiliary radio services. They also 
include the Local Multipoint Distribution Service (``LMDS''), the 
Digital Electronic Message Service (``DEMS''), and the 24 GHz Service, 
where licensees can choose between common carrier and non-common 
carrier status. The Commission has not yet defined a small business 
with respect to microwave services. For purposes of the RFA, the 
Commission will use the SBA's definition applicable to Wireless 
Telecommunications Carriers (except satellite)--i.e., a business is 
small if it has 1,500 or fewer employees. For this category, census 
data for 2007 show that there were 1,383 firms that operated for the 
entire year. Of this total, 1,368 firms had employment of 999 or fewer 
employees and 15 had employment of 1000 employees or more. Thus under 
this category and the associated small business size standard, the 
majority of firms can be considered small. The Commission notes that 
the number of firms does not necessarily track the number of licensees. 
The Commission estimates that virtually all of the Fixed Microwave 
licensees (excluding broadcast auxiliary licensees) would qualify as 
small entities under the SBA definition.
    615. Broadband Radio Service and Educational Broadband Service. 
Broadband Radio Service systems, previously referred to as Multipoint 
Distribution Service (``MDS'') and Multichannel Multipoint Distribution 
Service (``MMDS'') systems, and ``wireless cable,'' transmit video 
programming to subscribers and provide two-way high speed data 
operations using the microwave frequencies of the Broadband Radio 
Service (``BRS'') and Educational Broadband Service (``EBS'') 
(previously referred to as the Instructional Television Fixed Service 
(``ITFS'')). In connection with the 1996 BRS auction, the Commission 
established a small business size standard as an entity that had annual 
average gross revenues of no more than $40 million in the previous 
three calendar years. The BRS auctions resulted in 67 successful 
bidders obtaining licensing opportunities for 493 Basic Trading Areas 
(``BTAs''). Of the 67 auction winners, 61 met the definition of a small 
business. BRS also includes licensees of stations authorized prior to 
the auction. We previously estimated that of the 61 small business BRS 
auction winners, based on our review of licensing records, 48 remain 
small business licensees. In addition to the 48 small businesses that 
hold BTA authorizations, there are approximately 86 incumbent BRS 
licensees that are considered small entities (18 incumbent BRS 
licensees do not meet the small business size standard). After adding 
the number of small business auction licensees to the number of 
incumbent licensees not already counted, there are currently 
approximately 133 BRS licensees that are defined as small businesses 
under either the SBA or the Commission's rules. In 2009, the Commission 
conducted Auction 86, the sale of 78 licenses in the BRS areas. The 
Commission established three small business size standards that were 
used in Auction 86: (i) An entity with attributed average annual gross 
revenues that exceeded $15 million and do not exceed $40 million for 
the preceding three years was considered a small

[[Page 48523]]

business; (ii) an entity with attributed average annual gross revenues 
that exceeded $3 million and did not exceed $15 million for the 
preceding three years was considered a very small business; and (iii) 
an entity with attributed average annual gross revenues that did not 
exceed $3 million for the preceding three years was considered an 
entrepreneur. Auction 86 concluded in 2009 with the sale of 61 
licenses. Of the 10 winning bidders, two bidders that claimed small 
business status won four licenses; one bidder that claimed very small 
business status won three licenses; and two bidders that claimed 
entrepreneur status won six licenses. We note that, as a general 
matter, the number of winning bidders that qualify as small businesses 
at the close of an auction does not necessarily represent the number of 
small businesses currently in service.
    616. In addition, the SBA's placement of Cable Television 
Distribution Services in the category of Wired Telecommunications 
Carriers is applicable to cable-based educational broadcasting 
services. Since 2007, Wired Telecommunications Carriers have been 
defined as follows: ``This industry comprises establishments primarily 
engaged in operating and/or providing access to transmission facilities 
and infrastructure that they own and/or lease for the transmission of 
voice, data, text, sound, and video using wired telecommunications 
networks. Transmission facilities may be based on a single technology 
or a combination of technologies.'' Establishments in this industry use 
the wired telecommunications network facilities that they operate to 
provide a variety of services, such as wired telephony services, 
including VoIP services; wired (cable) audio and video programming 
distribution; and wired broadband Internet services. By exception, 
establishments providing satellite television distribution services 
using facilities and infrastructure that they operate are included in 
this industry. The SBA has developed a small business size standard for 
this category, which is: All such firms having 1,500 or fewer 
employees. Census data for 2007 shows that there were 3,188 firms that 
operated for the duration of that year. Of those, 3,144 had fewer than 
1000 employees, and 44 firms had more than 1000 employees. Thus under 
this category and the associated small business size standard, the 
majority of such firms can be considered small. In addition to Census 
data, the Commission's Universal Licensing System indicates that as of 
July 2013, there are 2,236 active EBS licenses. The Commission 
estimates that of these 2,236 licenses, the majority are held by non-
profit educational institutions and school districts, which are by 
statute defined as small businesses.
    617. Radio Broadcasting. The SBA defines a radio broadcast station 
as a small business if such station has no more than $35.5 million in 
annual receipts. Business concerns included in this industry are those 
``primarily engaged in broadcasting aural programs by radio to the 
public.'' According to review of the BIA Publications, Inc. Master 
Access Radio Analyzer Database as of November 26, 2013, about 11,331 
(or about 99.9 percent) of 11,341 commercial radio stations have 
revenues of $35.5 million or less and thus qualify as small entities 
under the SBA definition. The Commission notes, however, that, in 
assessing whether a business concern qualifies as small under the above 
definition, business (control) affiliations must be included. This 
estimate, therefore, likely overstates the number of small entities 
that might be affected, because the revenue figure on which it is based 
does not include or aggregate revenues from affiliated companies.
    618. In addition, an element of the definition of ``small 
business'' is that the entity not be dominant in its field of 
operation. The Commission is unable at this time to define or quantify 
the criteria that would establish whether a specific radio station is 
dominant in its field of operation. Accordingly, the estimate of small 
businesses to which rules may apply does not exclude any radio station 
from the definition of a small business on this basis and therefore may 
be over-inclusive to that extent. Also, as noted, an additional element 
of the definition of ``small business'' is that the entity must be 
independently owned and operated. The Commission notes that it is 
difficult at times to assess these criteria in the context of media 
entities and the estimates of small businesses to which they apply may 
be over-inclusive to this extent.
4. Description of Projected Reporting, Recordkeeping, and Other 
Compliance Requirements
    619. The projected reporting, recordkeeping, and other compliance 
requirements resulting from the Order will apply to all entities in the 
same manner. The Commission believes that applying the same rules 
equally to all entities in this context promotes fairness. The 
Commission does not believe that the costs and/or administrative 
burdens associated with the rules will unduly burden small entities. 
The revisions the Commission adopts should benefit small entities by 
giving them more information, more flexibility, and more options for 
gaining access to valuable wireless spectrum. Additionally, the reverse 
auction should benefit small entities that participate by providing a 
substantial infusion of income in exchange for spectrum usage rights, 
which broadcasters can use for new content and services. Similarly, by 
allowing unlicensed use in certain parts of the repurposed 600 MHz 
Band, the Commission will provide certainty and allow small entity 
equipment manufacturers to offer new services.
    620. Auction Application Requirements. Similar to previous spectrum 
license auctions, all applicants wishing to participate in either the 
reverse or forward auction will be required to file pre-auction 
applications using the Commission's online electronic auction 
application system. Winning bidders in the forward auction will be 
required to file applications using the Commission's Universal 
Licensing System (ULS). For potential reverse auction bidders, the 
Commission requires submission of an application establishing their 
eligibility to participate, including license information and 
associated spectrum usage rights, certification of various 
qualifications, and information regarding station ownership. Applicants 
that are party to a channel sharing agreement must certify compliance 
with the Commission's media ownership rules, provide a copy of the 
executed agreement, and make other required certifications. No 
applications to participate in the reverse auction will be accepted if 
the applicant has failed to make these certifications by the initial 
deadline. Applicants will be provided a limited opportunity to cure 
certain minor defects and to resubmit a corrected application to 
participate. After the resubmission period has ended, an application to 
participate may be amended or modified to make minor changes or correct 
minor errors in the application to participate. Minor amendments may be 
subject to a deadline specified by public notice. Major amendments 
cannot be made to an application to participate after the initial 
filing deadline.
    621. Prohibition on Certain Communications. Participants in both 
the reverse and the forward auction are required to report any 
potential violations of the Commission's prohibition on certain 
communications relating to the auction process. The Order extends 
existing rules applicable to participants in the forward auction

[[Page 48524]]

that prohibit certain communications among certain forward auction 
participants to cover communications between forward auction 
participants and potential reverse auction applicants. The Order adopts 
new rules providing that, beginning with the deadline for submitting 
applications and until the Commission releases the results of the 
incentive auction, all full power and Class A broadcast television 
licensees are prohibited from communicating any applicant's bids or 
bidding strategies to any other full power or Class A broadcast 
television licensee or to any forward auction applicant. This 
prohibition extends to controlling interests, directors, officers, and 
members of a governing board, with exceptions for parties to a 
disclosed channel sharing agreement and where the parties share common 
control. This rule requires all violations to be reported immediately, 
and may subject parties to further investigation by the Commission or 
the Department of Justice.
    622. National Security Certifications. To satisfy section 6004 of 
the Spectrum Act, reverse auction applicants, forward auction 
applicants, and forward auction winning bidders must file 
certifications of their compliance with the national security 
restrictions as set forth in 47 CFR 1.2204(c)(6) and 1.2105(a), as 
amended, and 47 CFR 27.12(b). This requirement extends to transactions 
in the secondary market: In any secondary market transaction 
applications involving 600 MHz Band licenses, applicants must certify 
to the Commission that neither they nor any party to the applications 
are persons barred from participating in an auction under this 
provision of the Spectrum Act. As such, in order to comply with this 
requirement, all reverse auction, forward auction, and secondary market 
applicants may require legal services to ensure compliance with section 
6004 of the Spectrum Act.
    623. Repacking. The Commission exercises its discretion to protect 
certain full power and Class A facilities in addition to those for 
which the statute mandates protection. The Commission generally limits 
its discretionary protection to facilities that are licensed by the 
Pre-Auction Licensing Deadline to be announced by the Media Bureau. 
Similarly, in order for a broadcaster to be a reverse auction eligible 
licensee, it must hold a license for the full power or Class A station 
it wishes to offer at auction on or before the Pre-Auction Licensing 
Deadline. To ensure a stable, accurate database, and to facilitate the 
repacking process, all full power and Class A television stations are 
required to verify and certify to the accuracy of the information 
contained in the Commission's Consolidated Database System (``CDBS'') 
with respect to their protected facilities. Prior to the start of the 
incentive auction, the Media Bureau will issue a Public Notice 
announcing each station's protected facility. All full power and Class 
A stations will be required to submit a form (to be developed by the 
Media Bureau) specifying any changes to the information contained in 
CDBS and certifying to the accuracy of the information in CDBS or 
provided on the form for their protected facility. Stations affected by 
the destruction of the World Trade Center may elect which of their 
facilities to be protected. The deadline for these stations to elect 
the facility to be protected is the Pre-Auction Licensing Deadline.
    624. Broadcast License Modification. Once the reverse and forward 
auctions are complete and results from the repacking process are 
announced, full power and Class A stations assigned new channels must 
file minor change applications for construction permits using FCC Form 
301, 301-CA, or 340. Stations have a three-month filing window, as 
opposed to the shorter standard period, to file these minor change 
applications or to seek a waiver for additional time. In these initial 
minor change applications, stations may propose transmission facilities 
that slightly extend their coverage contour under certain conditions. 
After the deadline for filing for these initial minor change 
applications, the Media Bureau will announce a filing window during 
which stations may propose expanded facilities, which are limited to 
minor changes, or alternate channel assignments, which will be 
considered major change applications and subject to the standard 
requirements. The licensee of each channel sharee station and channel 
sharer station must file an application for a license for the shared 
channel using FCC Form 302-DTV or 302-CA within three months of the 
date that the channel sharee station licensee receives its incentive 
payment. Compliance with these filing requirements may require stations 
to obtain legal, and, in the case of a construction permit application, 
engineering services.
    625. Broadcast Transition Deadlines. A winning license 
relinquishment bidder must comply with the notification and 
cancellation procedures in 47 CFR 73.1750 and terminate operations on 
its pre-auction channel within three months of the date that the 
licensee receives its incentive payment. The licensee of a channel 
sharee station must comply with the notification and cancellation 
procedures in 47 CFR 73.1750 and terminate operations on its pre-
auction channel within three months of the date that the licensee 
receives its incentive payment. The time allowed for full power and 
Class A stations reassigned to new channels to modify their facilities 
will vary. The Media Bureau will establish construction deadlines for 
such stations. A station reassigned to a new channel must cease 
operating on its pre-auction channel once such station begins operating 
on its post-auction channel or by the deadline specified in its 
construction permit for its post-auction channel, whichever occurs 
earlier, and in no event later than the end of the post-auction 
transition period, which is the 39-month period commencing upon the 
public release of the public notice specifying the new channel 
assignments and technical parameters of any broadcast television 
stations that are reassigned to new channels (``Post-Auction Transition 
Period''). A station may seek a single extension of up to six months of 
its original construction deadline. The extension request must be filed 
electronically in CDBS using FCC Form 337 no less than 90 days before 
the expiration of the construction permit. Licensees needing additional 
time beyond such a single extension of time to complete construction 
shall be subject to the tolling provisions in 47 CFR 73.3598. Stations 
may request Special Temporary Authority (``STA'') to operate with 
temporary facilities while they complete construction.
    626. Consumer Education Outreach. As consumers will need to be 
informed if stations they view will be changing channels, the 
Commission will require all Transitioning Stations (i.e., full power 
and Class A stations moving to new channels or relinquishing their 
licenses) to air notifications for a minimum of 30 days prior to the 
date that the station will terminate operations on its pre-auction 
channel. These notifications will be a mix of PSAs and crawls, and must 
meet certain duration requirements. Transitioning stations that operate 
on a noncommercial educational (``NCE'') basis have the option to 
instead air 60 seconds per day of on-air consumer education PSAs, in 
variable timeslots, for 30 days prior to the station's termination of 
operations on its pre-auction channel. Licensees of Transitioning 
Stations, except for license relinquishment stations, must place a 
certification of compliance with these requirements in their online 
public file within 30 days after

[[Page 48525]]

beginning operations on their post-auction channels. License 
relinquishment stations must include the certification in their 
notification of discontinuation of service pursuant to 47 CFR 73.1750. 
Small entities may need legal and engineering services to comply with 
these requirements.
    627. MVPD Notification. The Commission requires Transitioning 
Stations to provide notice to those MVPDs that: (1) No longer will be 
required to carry the station because it will cease operations or 
because of the relocation of a channel sharing sharee station; (2) 
currently carry and will continue to be obligated to carry a station 
that will change channels; or (3) will become obligated to carry a 
station due to a channel sharing relocation. The required notice must 
be provided in the form of a letter notification and contain the 
following information: (1) Date and time of any channel changes; (2) 
pre-auction and post-transition channel assignments; (3) modification, 
if any, to antenna position, location, or power levels; (4) stream 
identification information for channel sharing stations; and (5) 
engineering staff contact information. Should any of this information 
change during the station's transition, an amended notification must be 
sent. Transitioning Stations must provide notice within the following 
time frames: (1) For successful license relinquishment bidders, not 
less than 30 days prior to terminating operations; (2) for channel 
sharing sharee stations, not less than 30 days prior to terminating 
operations of the sharee's pre-auction channel; (3) for all channel 
sharing stations (i.e., both the sharer station and sharee station(s)), 
not less than 30 days prior to initiation of operations on the sharer 
channel; and (4) for all other stations transitioning to a new channel, 
including stations that are assigned to new channels in the repacking 
process and successful UHF-to-VHF and high-VHF-to-low-VHF bidders, not 
less than 90 days prior to the date on which they will begin operations 
on their reassigned channel. In addition, should a station's 
anticipated transition date change due to an unforeseen delay or change 
in transition plan, the station must send a further notice to affected 
MVPDs informing them of the new anticipated transition date.
    628. Broadcaster Relocation Reimbursement. The Order adopts a 
reimbursement process for eligible broadcasters and MVPDs. Within three 
months of the Media and Wireless Telecommunications Bureaus releasing 
the Channel Reassignment PN eligible broadcasters and MVPDs are 
required to submit an estimated cost form providing an estimate of 
reasonably incurred relocation costs as well as required 
certifications. Upon completing construction or other reimbursable 
changes, or by a specific deadline prior to the end of the 
Reimbursement Period to be established by the Media Bureau, whichever 
is earlier, all broadcast television station licensees and MVPDs that 
received an initial allocation from the TV Broadcaster Relocation Fund 
must provide the Commission with information and documentation, 
including invoices and receipts, regarding their actual expenses 
incurred as of a date to be determined by the Media Bureau. After 
completing all construction or reimbursable changes, broadcast 
television station licensees and MVPDs that have received money from 
the TV Broadcaster Relocation Fund will be required to submit final 
expense documentation containing a list of estimated expenses and 
actual expenses as of a date to be determined by the Media Bureau. 
Forms will include certifications that must be made by an owner or 
officer of the company under penalty of perjury under 18 U.S.C. Sec.  
1001. Broadcast television station licensees and MVPDs that receive 
payment from the TV Broadcaster Relocation Fund are required to submit 
progress reports at a date and frequency to be determined by the Media 
Bureau. Each broadcast television station licensee and MVPD that 
receives payment from the TV Broadcaster Relocation Fund is required to 
retain all relevant documents pertaining to construction or other 
reimbursable changes for a period ending not less than 10 years after 
the date on which it receives final payment from the TV Broadcaster 
Relocation Fund. Further, the Commission or its authorized contractor 
will conduct audits of, data validations for, and site visits to 
entities that receive disbursements from the TV Broadcaster Relocation 
Fund, both during and following the three year Reimbursement Period. 
All relevant documentation must be provided to the Commission or its 
authorized contractor upon request. Small entities seeking 
reimbursement may require legal, engineering, or accounting services in 
order to comply with these recordkeeping and filing requirements.
    629. Service Rule Waiver. Section 6403(b)(4)(B) of the Spectrum Act 
provides that broadcast licensees can, in lieu of reimbursement of 
relocation costs, receive a waiver of the Commission's rules to permit 
flexible use of their spectrum, subject to certain conditions. Such 
waiver requests will be evaluated on a case-by-case basis by the Media 
Bureau. Eligible broadcast licensees must file waiver requests during a 
30-day window commencing upon the date that the Channel Reassignment PN 
is released. Eligible broadcast licensees will have ten days to notify 
the Commission whether it accepts the Commission's grant of the waiver. 
Licensees who accept a granted waiver will not qualify for 
reimbursement. Until the Commission grants and the licensee accepts the 
terms of a waiver, the licensee must still meet all requirements for 
obtaining reimbursement, including filing a timely estimated cost form. 
A licensee that is granted and accepts the terms of the waiver or a 
licensee with a pending waiver application must comply will all filing 
and notification requirements, construction schedules, and other post-
auction transition deadlines. Broadcast licensees that intend to file 
for a waiver may require legal, engineering, or accounting services as 
well.
    630. Displacement of LPTV and TV translator stations and 
Relinquishment of Broadcast Auxiliary Station (``BAS'') Channels. 
Licensees of operating LPTV and TV translator stations that are 
displaced by a broadcast television station or a wireless service 
provider or whose channel is reserved as a guard band are permitted to 
submit an application for displacement relief in a restricted filing 
window to be announced by the Media Bureau by public notice. LPTV and 
TV translator stations, the majority of which are small entities, will 
be affected by this transition. Stations may require legal or 
engineering services in order to make the required filings. In 
addition, TV STL, TV relay station, or TV translator relay station 
(BAS) licensees in the 600 MHz Band will be required to cease 
operations or relocate from the 600 MHz Band no later than the end of 
the Post-Auction Transition Period. BAS licensees may require legal or 
engineering services in order to make the required filings.
    631. Channel Sharing Operating Rules. The Commission requires all 
Channel Sharing Agreements (``CSAs'') to include certain provisions 
outlining each licensee's rights and responsibilities, as well as other 
requirements, which must be filed with the station's reverse auction 
application. Additionally, all CSAs must include a provision affirming 
compliance with the requirements in this Order, the Channel Sharing 
Report and Order (See 77 FR 30423 (2012)), and Commission rules. The 
Commission may review CSA provisions and require modifications to

[[Page 48526]]

meet these requirements. These provisions are meant to help avoid 
disputes that could interrupt service and to ensure that each licensee 
is able to fulfill its independent obligation to comply with all 
pertinent statutory requirements and Commission rules. Since many 
broadcasters interested in CSAs may be small businesses, small entities 
may need legal, engineering, or other technical services to draft a CSA 
that complies with these contractual requirements.
    632. Notification of Commencement of Wireless Operations. A 
wireless licensee assigned to frequencies in the 600 MHz Band must 
provide notice to LPTV and TV translator stations of its intent to 
commence wireless operations, and the likelihood of receiving harmful 
interference from the LPTV or TV translator station to such operations 
within the wireless licensee's licensed geographic service area. The 
new wireless licensees must: (i) Notify the LPTV or TV translator 
station in the form of a letter, via certified mail, return receipt 
requested; (ii) indicate the date the new wireless licensee intends to 
commence operations in areas where there is a likelihood of receiving 
harmful interference from the LPTV or TV translator station; and (iii) 
send such notification not less than 120 days in advance of the 
commencement date. A wireless licensee assigned to frequencies in the 
600 MHz Band must notify the BAS licensee of its intent to commence 
wireless operations and the likelihood of harmful interference from the 
BAS licensee to those operations within the wireless licensee's 
licensed geographic service area. The wireless licensee must: (i) 
Notify the licensee of the TV STL, TV relay station, or TV translator 
relay station in the form of a letter, via certified mail, return 
receipt requested; and (ii) send such notification not less than 30 
days in advance of the approximate date of commencement of such 
operations. 600 MHz Band licensees may require legal and engineering 
services to comply with these requirements.
    633. Wireless Technical and Service Rules. In general, the 
Commission adopts service rules contained in Part 27 of the 
Commission's rules. The Commission adopted technical rules for the 600 
MHz Band similar to the Lower 700 MHz Band, contained in Part 27 of the 
Commission's rules, including out-of-band emission (``OOBE'') limits, 
antenna height limits, co-channel interference limits, and slightly 
modified power limits. In order to promote interoperability across the 
600 MHz Band, all user equipment certified for this band must be 
capable of operating throughout the band. In order to comply with these 
rules, 600 MHz Band licensees may require engineering and legal 
services.
    634. Coordination with RAS Observatories. Coordination requirements 
apply prior to the commencement of operation of base and fixed stations 
in the 600 MHz Band in proximity to certain RAS observatories. 600 MHz 
Band licensees may require legal and engineering services to comply 
with this requirement.
    635. Performance Requirements. All 600 MHz licensees will be 
required to file a construction notification and certify that they have 
met the applicable performance benchmarks. In particular, licensees of 
the 600 MHz Band must demonstrate that they meet certain build-out 
requirements at two performance benchmarks. If a licensee fails to meet 
the interim benchmark, its final benchmark and license term accelerate 
by two years; failing to meet the final benchmark results in automatic 
termination of the license. Due to the possibility that some licenses 
will have impaired areas, while the same build out benchmarks apply, a 
licensee may meet its requirement by providing coverage to population 
in non-impaired service areas. Licensees who hold licenses with 
impaired areas must provide an explanation to the Commission why they 
cannot serve the entire license area or meet the performance 
requirement at the relevant construction benchmark. These entities may 
require legal, engineering, or survey services in order to comply with 
all reporting, recordkeeping, and other requirements.
    636. Other Regulatory Matters. In order to renew a license, 600 MHz 
licensees will be required to file a license renewal application and 
make the necessary showings to qualify for renewal of the license. In 
addition, a 600 MHz licensee must notify the Commission of certain 
changes. Specifically, notification is required by licensees if they 
change their regulatory status, their foreign ownership status, or if 
they permanently discontinue service. A 600 MHz Band licensee that 
permanently discontinues service must notify the Commission of the 
discontinuance within 10 days by filing FCC Form 601 or 605 requesting 
license cancellation. 600 MHz Band licensees may require legal and 
engineering services to comply with these requirements.
5. Steps Taken To Minimize Significant Economic Impact on Small 
Entities, and Significant Alternatives Considered
    637. The RFA requires an agency to describe any significant 
alternatives that it has considered in developing its approach, which 
may include the following four alternatives (among others): ``(1) The 
establishment of differing compliance or reporting requirements or 
timetables that take into account the resources available to small 
entities; (2) the clarification, consolidation, or simplification of 
compliance and reporting requirements under the rule for such small 
entities; (3) the use of performance rather than design standards; and 
(4) an exemption from coverage of the rule, or any part thereof, for 
such small entities.''
    638. Facilities Protected in the Repacking. The Spectrum Act 
mandates all reasonable efforts to preserve the ``coverage area and 
population served'' of full power and Class A facilities licensed as of 
the date of the Spectrum Act's enactment. The Commission interprets the 
Spectrum Act to allow it to afford discretionary protection to several 
additional categories of facilities. While some commenters suggest that 
the Commission afford protection to other facilities, including LPTV 
and TV translator stations, the Commission determines that the Spectrum 
Act does not mandate such protection, and affording discretionary 
protection to such stations would not be consistent with the goals of 
the Spectrum Act. LPTV and TV translator stations are secondary to full 
power stations, and affording these stations protection would severely 
limit recovery of spectrum and frustrate the purpose of the Spectrum 
Act. The Commission understands the potential impact of the incentive 
auction on LPTV and TV translator stations, among others, and will take 
steps to mitigate such impact.
    639. Reverse Auction Participation. The Commission permits 
voluntary participation generally to all licensees of commercial and 
NCE full power and Class A stations, and provides several options for 
spectrum usage rights that a participant may bid to relinquish. 
Allowing options such as channel sharing, UHF-to-VHF moves, and high-
VHF-to-low-VHF moves will encourage participation by small entities, 
which may stand to receive substantial proceeds while continuing to 
broadcast. In addition, the Commission will offer a license 
relinquishment bid option regardless of whether it may lead to a loss 
of service. This will allow voluntary participation by all eligible

[[Page 48527]]

licensees, and remove obstacles that small entities may face in 
deciding whether to participate.
    640. Confidentiality. Information regarding the identity of reverse 
auction applicants will be protected from disclosure for a period of 
time. To comport with the Spectrum Act's requirements, the Commission 
will protect the confidentiality of Commission-held data on broadcast 
television licensees participating in the reverse auction, regardless 
of whether their applications are complete and in compliance with the 
Commission's rules. Confidential information pertaining to unsuccessful 
bids will continue to be protected until two years after the effective 
date of spectrum reassignments and reallocations. When the spectrum 
reassignments and reallocations become effective, the Commission will 
disclose the identities of the winning bidders and their winning bid 
amounts. The Commission further amends its FOIA disclosure rules to 
accommodate the confidentiality rules adopted. While some commenters 
urge the Commission to protect reverse auction participant identities 
in perpetuity, the Commission determines that doing so would not be a 
reasonable step necessary to protect broadcaster data. The Commission 
determines that adopting the two year confidentiality rule best 
balances protections for broadcasters with the transparency needed to 
maintain public trust in the auction process.
    641. Forward Auction Participation. To assist small entities in 
competitive bidding in the forward auction, the Order adopts an open 
eligibility standard as mandated in section 6404 of the Spectrum Act to 
further broad participation in the incentive auction. In addition, the 
same small business size standards that were adopted in the 700 MHz 
Band were adopted for the 600 MHz Band, as well as bidding credits that 
are set forth in the standardized schedule in Part 1 of the 
Commission's rules. Specifically, the Order defines a ``small 
business'' as an entity with average annual gross revenues for the 
preceding three years not exceeding $40 million, and a ``very small 
business'' as an entity with average annual gross revenues for the 
preceding three years not exceeding $15 million. The Commission also 
provides small businesses with a bidding credit of 15 percent and very 
small businesses with a bidding credit of 25 percent for the 600 MHz 
Band. The Commission will initiate a separate proceeding to review its 
Part 1 designated entity rules. In addition, the Commission adopts PEA 
geographic license sizes that will encourage entry by providers, 
including small providers, that contemplate offering wireless broadband 
service on a localized basis, yet at the same time not precluding 
carriers that plan to provide service on a much larger geographic 
scale. While some small and rural wireless carriers urge the Commission 
to license, wholly or in part, on a CMA basis, the Commission concludes 
that licensing using PEAs throughout the country strikes the 
appropriate balance and will allow both smaller and larger wireless 
carriers to obtain licenses that best align with their respective 
business plans. Further, licensing markets using a variety of sizes 
(for example, mixing EAs and CMAs) would conflict with the Commission's 
goal of offering spectrum blocks as interchangeable as possible in 
order to speed up the forward auction bidding process.
    642. Band Plan Matters. While the Commission will not know which 
specific 600 MHz Band Plan scenario will be employed until the 
conclusion of the incentive auction, each scenario includes guard bands 
to prevent harmful interference between licensed services. 
Specifically, the guard bands will protect against interference between 
uplink and downlink wireless services, between wireless services and 
broadcast television services, and between wireless services and RAS 
and WMTS services operating on channel 37, if enough spectrum is 
repurposed. The Commission concludes that these guard bands are 
technically reasonable, and will help prevent harmful interference to 
entities of all sizes operating adjacent to repurposed spectrum. 
Further, by adopting a fully-paired band plan rather than licensing 
some spectrum blocks as supplemental downlink, smaller carriers and new 
entrants will be able to obtain much-needed low frequency, paired 
spectrum.
    643. Repacking of the Television Band. The Commission intends to 
optimize any final channel assignments to minimize relocation costs for 
eligible broadcasters and MVPDs. The Spectrum Act caps the TV 
Broadcaster Relocation Fund at $1.75 billion and requires the 
Commission to make any reimbursements within three years of the 
completion of the forward auction. Because eligible broadcasters and 
MVPDs will be eligible for an initial allocation based on estimated 
costs, they should not have to rely significantly on self-financing or 
outside financing. Further, delaying the ``close'' of the forward 
auction until after reassigned stations file construction permits, as 
some broadcasters suggest, does not reasonably comport with the 
statutory mandate.
    644. Partitioning, Disaggregation, and Leasing. The Commission 
concludes that providing flexibility in the secondary markets, by 
allowing licensees to partition, disaggregate, and/or lease spectrum, 
helps smaller carriers acquire the specific spectrum rights that they 
need to serve small, targeted markets. As in other bands, this 
flexibility can facilitate the efficient use of spectrum, promote 
competition, and expedite provision of services in areas that might not 
otherwise receive service in the near term.
6. Federal Rules that May Duplicate, Overlap, or Conflict with the 
Rules
    645. None.
7. Report to Congress
    646. The Commission will send a copy of the Order, including this 
FRFA, in a report to be sent to Congress and the Government 
Accountability Office pursuant to the Congressional Review Act. A copy 
of the Order and FRFA (or summaries thereof) will also be published in 
the Federal Register.
8. Report to Small Business Administration
    647. The Commission's Consumer and Governmental Affairs Bureau, 
Reference Information Center, will send a copy of this Order, including 
this FRFA, to the Chief Counsel for Advocacy of the SBA.

B. Paperwork Reduction Act Analysis

    648. This document contains new or modified information collection 
requirements subject to the Paperwork Reduction Act of 1995 (PRA), 
Public Law 104-13. It will be submitted to the Office of Management and 
Budget (OMB) for review under section 3507(d) of the PRA. OMB, the 
general public, and other Federal agencies are invited to comment on 
the new or modified information collection requirements contained in 
this proceeding. In addition, we note that pursuant to the Small 
Business Paperwork Relief Act of 2002, Public Law 107-198, see 44 
U.S.C. 3506(c)(4), we previously sought specific comment on how the 
Commission might further reduce the information collection burden for 
small business concerns with fewer than 25 employees.
    649. We have assessed the effects of the policies adopted in the 
Order with regard to information collection burdens on small business 
concerns, and find that these policies will benefit many companies with 
fewer than 25 employees by providing them with options for voluntarily 
relinquishing broadcast spectrum usage rights or for gaining access to 
valuable repurposed

[[Page 48528]]

spectrum. In addition, we have described impacts that might affect 
small businesses, which includes most businesses with fewer than 25 
employees, in the FRFA.

C. Delegation To Correct Rules

    650. We delegate authority to the Wireless Telecommunications 
Bureau, Media Bureau, International Bureau, and Office of Engineering 
and Technology, as appropriate, to make corrections to the rules that 
are adopted in this Order as necessary to conform them to the text of 
this Order. We note that any entity that disagrees with a rule 
correction made on delegated authority will have the opportunity to 
file an Application for Review by the full Commission.

VII. Ordering Clauses

    651. It is ordered, pursuant to the authority found in Sections 1, 
4, 301, 303, 307, 308, 309, 310, 316, 319, 325(b), 332, 336(f), 338, 
339, 340, 399b, 403, 534, and 535 of the Communications Act of 1934, as 
amended, and sections 6004, 6402, 6403, 6404, and 6407 of Middle Class 
Tax Relief and Job Creation Act of 2012, Pub. L. 112-96, 126 Stat. 156, 
47 U.S.C. 151, 154, 301, 303, 307, 308, 309, 310, 316, 319, 325(b), 
332, 336(f), 338, 339, 340, 399b, 403, 534, 535, 1404, 1452, and 1454, 
the Report and Order in GN Docket No. 12-268 is adopted.
    652. It is further ordered that the Commission's rules are hereby 
amended.
    653. It is further ordered that the rules adopted herein will 
become effective 60 days after the date of publication in the Federal 
Register, except for those rules and requirements which contain new or 
modified information collection requirements that require approval by 
the Office of Management and Budget under the Paperwork Reduction Act 
and will become effective after the Commission publishes a notice in 
the Federal Register announcing such approval and the relevant 
effective date.
    654. It is further ordered that the Commission's Consumer and 
Governmental Affairs Bureau, Reference Information Center, shall send a 
copy of the Order in GN Docket No. 12-268, including the Final 
Regulatory Flexibility Analysis, to the Chief Counsel for Advocacy of 
the Small Business Administration.
    655. It is further ordered that the Commission shall send a copy of 
the Order in GN Docket No. 12-268 in a report to be sent to Congress 
and the Government Accountability Office pursuant to the Congressional 
Review Act, see 5 U.S.C. 801(a)(1)(A).

List of Subjects

47 CFR Part 0

    Reporting and recordkeeping requirements.

47 CFR Parts 1, 2, 15, 27, 73, and 74

    Administrative practice and procedure, Communications common 
carriers, Radio, Telecommunications.

    Federal Communications Commission.
Marlene H. Dortch,
Secretary.
    For the reasons discussed in the preamble, the Federal 
Communications Commission amends 47 CFR parts 0, 1, 2, 15, 27, 73, and 
74 as follows:

PART 0--COMMISSION ORGANIZATION

0
1. The authority citation for part 0 continues to read as follows:

    Authority: Sec. 5, 48 Stat. 1068, as amended; 47 U.S.C. 155, 
225, unless otherwise noted.

0
2. Section 0.457 is amended by adding paragraph (d)(1)(ix) to read as 
follows:


Sec.  0.457  Records not routinely available for public inspection.

* * * * *
    (d) * * *
    (1) * * *
    (ix) Confidential Broadcaster Information, as defined in Sec.  
1.2206(d) of this chapter, submitted by a broadcast television licensee 
in a broadcast television spectrum reverse auction conducted under 
section 6403 of the Middle Class Tax Relief and Job Creation Act of 
2012 (Pub. L. 112-96) (the ``Spectrum Act''), or in the application to 
participate in such a reverse auction, is not routinely available for 
public inspection until the reassignments and reallocations under 
section 6403(b)(1)(B) of the Spectrum Act become effective or until two 
years after public notice that the reverse auction is complete and that 
no such reassignments and reallocations shall become effective. In the 
event that reassignments and reallocations under section 6403(b)(1)(B) 
of the Spectrum Act become effective, Confidential Broadcaster 
Information pertaining to any unsuccessful reverse auction bid or 
pertaining to any unsuccessful application to participate in such a 
reverse auction will not be routinely available for public inspection 
until two years after the effective date.
* * * * *

PART 1--PRACTICE AND PROCEDURE

0
3. The authority citation for part 1 is revised to read as follows:

    Authority: 15 U.S.C. 79 et seq.; 47 U.S.C. 151, 154(i), 154(j), 
155, 157, 225, 227, 303(r), 309, 1403, 1404, 1451, and 1452.

0
4. Section 1.2101 is revised to read as follows:


Sec.  1.2101  Purpose.

    The provisions of Sec. Sec.  1.2101 through 1.2114 implement 
section 309(j) of the Communications Act of 1934, as added by the 
Omnibus Budget Reconciliation Act of 1993 (Pub. L. 103-66) and 
subsequent amendments.


Sec.  1.2102  [Amended]

0
5. Section 1.2102 is amended by removing and reserving paragraph (c).

0
6. Section 1.2103 is revised to read as follows:


Sec.  1.2103  Competitive bidding design options.

    (a) Public notice of competitive bidding design options. Prior to 
any competitive bidding for initial licenses, public notice shall be 
provided of the detailed procedures that may be used to implement 
auction design options.
    (b) Competitive bidding design options. The public notice detailing 
competitive bidding procedures may establish procedures for collecting 
bids, assigning winning bids, and determining payments, including 
without limitation:
    (1) Procedures for collecting bids. (i) Procedures for collecting 
bids in a single round or in multiple rounds.
    (ii) Procedures allowing for bids for specific items, bids for 
generic items in one or more categories of items, or bids for one or 
more aggregations of items.
    (iii) Procedures allowing for bids that specify a price, indicate 
demand at a specified price, or provide other information as specified 
by competitive bidding policies, rules, and procedures.
    (iv) Procedures allowing for bids that are contingent on specified 
conditions, such as other bids being accepted or for packages of 
licenses being awarded.
    (v) Procedures to collect bids in one or more stages, including 
procedures for transitions between stages.
    (vi) Procedures for whether, when, and how bids may be modified 
during the auction.
    (2) Procedures for assigning winning bids. (i) Procedures that take 
into account one or more factors in addition to the submitted bid 
amount, including but not limited to the amount of bids submitted in 
separate competitive bidding.
    (ii) Procedures to assign specific items to bidders following 
bidding for quantities of generic items.
    (iii) Procedures to incorporate public interest considerations into 
the process for assigning winning bids.

[[Page 48529]]

    (3) Procedures for determining payments. Procedures to determine 
the amount of any payments made to or by winning bidders consistent 
with other auction design choices.

0
7. Section 1.2104 is amended by revising paragraphs (e) and (j) to read 
as follows:


Sec.  1.2104  Competitive bidding mechanisms.

* * * * *
    (e) Stopping procedures. Before or during an auction, procedures 
may be established regarding when bidding will stop for a round, a 
stage, or an entire auction, in order to terminate the auction within a 
reasonable time and in accordance with public interest considerations 
and the goals, statutory requirements, rules, and procedures for the 
auction, including any reserve price or prices.
* * * * *
    (j) Bid apportionment--(1) Apportioned license bid. The Commission 
may specify a method for apportioning a bid among portions of the 
license (i.e., portions of the license's service area or bandwidth, or 
both) when necessary to compare a bid on the original license or 
portions thereof with a bid on a corresponding reconfigured license for 
purposes of the Commission's rules or procedures, such as to calculate 
a bid withdrawal or default payment obligation in connection with the 
bid.
    (2) Apportioned package bid. The apportioned package bid on a 
license is an estimate of the price of an individual license included 
in a package of licenses in an auction with combinatorial (package) 
bidding. Apportioned package bids shall be determined by the Commission 
according to a methodology it establishes in advance of each auction 
with combinatorial bidding. The apportioned package bid on a license 
included in a package shall be used in place of the amount of an 
individual bid on that license when the bid amount is needed to 
determine the size of a designated entity bidding credit (see Sec.  
1.2110(f)(1) and (f)(2)), a new entrant bidding credit (see Sec.  
73.5007 of this chapter), a bid withdrawal or default payment 
obligation (see Sec.  1.2104(g)), a tribal land bidding credit limit 
(see Sec.  1.2110(f)(3)(iv)), or a size-based bidding credit unjust 
enrichment payment obligation (see Sec.  1.2111(d), (e)(2), and 
(e)(3)), or for any other determination required by the Commission's 
rules or procedures.

0
8. Section 1.2105 is amended by revising paragraphs (a)(2)(i), 
(a)(2)(xii), and (c)(6), and adding paragraph (c)(8) and notes 1 and 2 
to paragraph (c) to read as follows:


Sec.  1.2105  Bidding application and certification procedures; 
prohibition of certain communications.

    (a) * * *
    (2) * * *
    (i) Identification of each license, or category of licenses, on 
which the applicant wishes to bid.
* * * * *
    (xii) For auctions required to be conducted under Title VI of the 
Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96) 
or in which any spectrum usage rights for which licenses are being 
assigned were made available under 47 U.S.C. 309(j)(8)(G)(i), 
certification under penalty of perjury that the applicant and all of 
the person(s) disclosed under paragraph (a)(2)(ii) of this section are 
not person(s) who have been, for reasons of national security, barred 
by any agency of the Federal Government from bidding on a contract, 
participating in an auction, or receiving a grant. For the purposes of 
this certification, the term ``person'' means an individual, 
partnership, association, joint-stock company, trust, or corporation, 
and the term ``reasons of national security'' means matters relating to 
the national defense and foreign relations of the United States.
* * * * *
    (c) * * *
    (6) A party that makes or receives a communication prohibited under 
paragraphs (c)(1) or (8) of this section shall report such 
communication in writing immediately, and in any case no later than 
five business days after the communication occurs. A party's obligation 
to make such a report continues until the report has been made. Such 
reports shall be filed as directed in public notices detailing 
procedures for the bidding that was the subject of the reported 
communication. If no public notice provides direction, the party making 
the report shall do so in writing to the Chief of the Auctions and 
Spectrum Access Division, Wireless Telecommunications Bureau, by the 
most expeditious means available, including electronic transmission 
such as email.
* * * * *
    (8) Prohibition of certain communications for the broadcast 
television spectrum incentive auction conducted under section 6403 of 
the Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-
96).
    (i) For the purposes of the prohibition described in paragraphs 
(c)(8)(ii) and (iii) of this section, the term forward auction 
applicant is defined the same as the term applicant is defined in 
paragraph (c)(7) of this section, and the terms full power broadcast 
television licensee and Class A broadcast television licensee are 
defined the same as those terms are defined in Sec.  1.2205(a)(1).
    (ii) Except as provided in paragraph (c)(8)(iii) of this section, 
in the broadcast television spectrum incentive auction conducted under 
section 6403 of the Middle Class Tax Relief and Job Creation Act of 
2012 (Pub. L. 112-96), beginning on the short-form application filing 
deadline for the forward auction and until the results of the incentive 
auction are announced by public notice, all forward auction applicants 
are prohibited from communicating directly or indirectly any incentive 
auction applicant's bids or bidding strategies to any full power or 
Class A broadcast television licensee.
    (iii) The prohibition described in paragraph (c)(8)(ii) of this 
section does not apply to communications between a forward auction 
applicant and a full power or Class A broadcast television licensee if 
a controlling interest, director, officer, or holder of any 10 percent 
or greater ownership interest in the forward auction applicant, as of 
the deadline for submitting short-form applications to participate in 
the forward auction, is also a controlling interest, director, officer, 
or governing board member of the full power or Class A broadcast 
television licensee, as of the deadline for submitting applications to 
participate in the reverse auction.

    Note 1 to Paragraph (c):  For the purposes of paragraph (c), 
``controlling interests'' include individuals or entities with 
positive or negative de jure or de facto control of the licensee. De 
jure control includes holding 50 percent or more of the voting stock 
of a corporation or holding a general partnership interest in a 
partnership. Ownership interests that are held indirectly by any 
party through one or more intervening corporations may be determined 
by successive multiplication of the ownership percentages for each 
link in the vertical ownership chain and application of the relevant 
attribution benchmark to the resulting product, except that if the 
ownership percentage for an interest in any link in the chain meets 
or exceeds 50 percent or represents actual control, it may be 
treated as if it were a 100 percent interest. De facto control is 
determined on a case-by-case basis. Examples of de facto control 
include constituting or appointing 50 percent or more of the board 
of directors or management committee; having authority to appoint, 
promote, demote, and fire senior executives that control the day-to-
day activities of the licensee; or playing an integral role in 
management decisions.


    Note 2 to Paragraph (c):  The prohibition described in paragraph 
(c)(8)(ii) of this section applies to controlling interests, 
directors, officers, and holders of any 10 percent or greater 
ownership interest in the

[[Page 48530]]

forward auction applicant as of the deadline for submitting short-
form applications to participate in the forward auction, and any 
additional such parties at any subsequent point prior to the 
announcement by public notice of the results of the incentive 
auction. Thus, if, for example, a forward auction applicant appoints 
a new officer after the short-form application deadline, that new 
officer would be subject to the prohibition in paragraph (c)(8)(ii) 
of this section, but would not be included within the exception 
described in paragraph (c)(8)(iii).


0
9. Section 1.2106 is amended by revising paragraph (a) to read as 
follows:


Sec.  1.2106  Submission of upfront payments.

    (a) Applicants for licenses subject to competitive bidding may be 
required to submit an upfront payment. In that event, the amount of the 
upfront payment and the procedures for submitting it will be set forth 
in a public notice. Any auction applicant that has previously been in 
default on any Commission license or has previously been delinquent on 
any non-tax debt owed to any Federal agency must submit an upfront 
payment equal to 50 percent more than the amount that otherwise would 
be required. No interest will be paid on upfront payments.
* * * * *

0
10. Section 1.2114 is amended by revising paragraph (e) to read as 
follows:


Sec.  1.2114  Reporting of eligibility event.

* * * * *
    (e) Public notice of application. Applications under this section 
will be placed on an informational public notice on a weekly basis (see 
Sec.  1.933(a)).
* * * * *

0
11. Part 1 subpart Q is amended by adding Sec. Sec.  1.2200 through 
1.2209 under added undesignated center heading ``Broadcast Television 
Spectrum Reverse Auction'' as follows:

Subpart Q--Competitive Bidding Proceedings

* * * * *

Broadcast Television Spectrum Reverse Auction

Sec.
1.2200 Definitions.
1.2201 Purpose.
1.2202 Competitive bidding design options.
1.2203 Competitive bidding mechanisms.
1.2204 Applications to participate in competitive bidding.
1.2205 Prohibition of certain communications.
1.2206 Confidentiality of Commission-held data.
1.2207 Two competing participants required.
1.2208 Public notice of auction completion and auction results.
1.2209 Disbursement of incentive payments.

Broadcast Television Spectrum Reverse Auction


Sec.  1.2200  Definitions.

    For purposes of Sec. Sec.  1.2200 through 1.2209:
    (a) Broadcast television licensee. The term broadcast television 
licensee means the licensee of
    (1) A full-power television station, or
    (2) A low-power television station that has been accorded primary 
status as a Class A television licensee under Sec.  73.6001(a) of this 
chapter.
    (b) Channel sharee. The term channel sharee means a broadcast 
television licensee that relinquishes all spectrum usage rights with 
respect to a particular television channel in order to share a 
television channel with another broadcast television licensee.
    (c) Channel sharer. The term channel sharer means a broadcast 
television licensee that shares its television channel with a channel 
sharee.
    (d) Channel sharing bid. The term channel sharing bid means a bid 
to relinquish all spectrum usage rights with respect to a particular 
television channel in order to share a television channel with another 
broadcast television licensee.
    (e) Forward auction. The term forward auction means the portion of 
an incentive auction of broadcast television spectrum described in 
section 6403(c) of the Spectrum Act.
    (f) High-VHF-to-low-VHF bid. The term high-VHF-to-low-VHF bid means 
a bid to relinquish all spectrum usage rights with respect to a high 
very high frequency (``VHF'') television channel (channels 7 through 
13) in return for receiving spectrum usage rights with respect to a low 
VHF television channel (channels 2 through 6).
    (g) License relinquishment bid. The term license relinquishment bid 
means a bid to relinquish all spectrum usage rights with respect to a 
particular television channel without receiving in return any spectrum 
usage rights with respect to another television channel.
    (h) NCE station. The term NCE station means a noncommercial 
educational television broadcast station as defined in Sec.  73.621 of 
this chapter.
    (i) Reverse auction. The term reverse auction means the portion of 
an incentive auction of broadcast television spectrum described in 
section 6403(a) of the Spectrum Act.
    (j) Reverse auction bid. The term reverse auction bid includes a 
license relinquishment bid, a UHF-to-VHF bid, a high-VHF-to-low-VHF 
bid, a channel sharing bid, and any other reverse auction bids 
permitted.
    (k) Spectrum Act. The term Spectrum Act means Title VI of the 
Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96).
    (l) UHF-to-VHF bid. The term UHF-to-VHF bid means a bid to 
relinquish all spectrum usage rights with respect to an ultra-high 
frequency (``UHF'') television channel in return for receiving spectrum 
usage rights with respect to a high VHF television channel or a low VHF 
television channel.


Sec.  1.2201  Purpose.

    The provisions of Sec. Sec.  1.2200 through 1.2209 implement 
section 6403 of the Spectrum Act, which requires the Commission to 
conduct a reverse auction to determine the amount of compensation that 
each broadcast television licensee would accept in return for 
voluntarily relinquishing some or all of its broadcast television 
spectrum usage rights in order to make spectrum available for 
assignment through a system of competitive bidding under subparagraph 
(G) of section 309(j)(8) of the Communications Act of 1934, as added by 
section 6402 of the Spectrum Act.


Sec.  1.2202  Competitive bidding design options.

    (a) Public notice of competitive bidding design options. Prior to 
conducting competitive bidding in the reverse auction, public notice 
shall be provided of the detailed procedures that may be used to 
implement auction design options.
    (b) Competitive bidding design options. The public notice detailing 
competitive bidding procedures for the reverse auction may establish 
procedures for collecting bids, assigning winning bids, and determining 
payments, including without limitation:
    (1) Procedures for collecting bids. (i) Procedures for collecting 
bids in a single round or in multiple rounds.
    (ii) Procedures for collecting bids for multiple reverse auction 
bid options.
    (iii) Procedures allowing for bids that specify a price for a 
reverse auction bid option, indicate demand at a specified price, or 
provide other information as specified by competitive bidding policies, 
rules, and procedures.
    (iv) Procedures allowing for bids that are contingent on specified 
conditions, such as other bids being accepted.
    (v) Procedures to collect bids in one or more stages, including 
procedures for transitions between stages.
    (vi) Procedures for whether, when, and how bids may be modified 
during the auction.

[[Page 48531]]

    (2) Procedures for assigning winning bids. (i) Procedures that take 
into account one or more factors in addition to bid amount, such as 
population coverage or geographic contour, or other relevant measurable 
factors.
    (ii) Procedures to evaluate the technical feasibility of assigning 
a winning bid.
    (A) Procedures that utilize mathematical computer optimization 
software, such as integer programming, to evaluate bids and technical 
feasibility, or that utilize other decision routines, such as 
sequentially evaluating bids using a ranking based on specified 
factors.
    (B) Procedures that combine computer optimization algorithms with 
other decision routines.
    (iii) Procedures to incorporate public interest considerations into 
the process for assigning winning bids.
    (3) Procedures for determining payments. (i) Procedures to 
determine the amount of any incentive payments made to winning bidders 
consistent with other auction design choices.
    (ii) The amount of proceeds shared with a broadcast television 
licensee will not be less than the amount of the licensee's winning bid 
in the reverse auction.


Sec.  1.2203  Competitive bidding mechanisms.

    (a) Public notice of competitive bidding procedures. Detailed 
competitive bidding procedures shall be established by public notice 
prior to the commencement of the reverse auction, including without 
limitation:
    (1) Sequencing. The sequencing with which the reverse auction and 
the related forward auction assigning new spectrum licenses will occur.
    (2) Reserve price. Reserve prices, either disclosed or undisclosed, 
so that higher bids for various reverse auction bid options would not 
win in the reverse auction. Reserve prices may apply individually, in 
combination, or in the aggregate.
    (3) Opening bids and bid increments. Maximum or minimum opening 
bids, and by announcement before or during the reverse auction, maximum 
or minimum bid increments in dollar or percentage terms.
    (4) Activity rules. Activity rules that require a minimum amount of 
bidding activity.
    (b) Binding obligation. A bid is an unconditional, irrevocable 
offer by the bidder to fulfill the terms of the bid. The Commission 
accepts the offer by identifying the bid as winning. A bidder has a 
binding obligation to fulfill the terms of a winning bid. A winning 
bidder will relinquish spectrum usage rights pursuant to the terms of 
any winning bid by the deadline set forth in Sec.  73.3700(b)(4) of 
this chapter.
    (c) Stopping procedures. Before or during the reverse auction, 
procedures may be established regarding when bidding will stop for a 
round, a stage, or an entire auction, in order to terminate the auction 
within a reasonable time and in accordance with public interest 
considerations and the goals, statutory requirements, rules, and 
procedures for the auction, including any reserve price or prices.
    (d) Auction delay, suspension, or cancellation. By public notice or 
by announcement during the reverse auction, the auction may be delayed, 
suspended, or cancelled in the event of a natural disaster, technical 
obstacle, network disruption, evidence of an auction security breach or 
unlawful bidding activity, administrative or weather necessity, or for 
any other reason that affects the fair and efficient conduct of the 
competitive bidding. The Commission has the authority, at its sole 
discretion, to resume the competitive bidding starting from the 
beginning of the current or some previous round or cancel the 
competitive bidding in its entirety.


Sec.  1.2204  Applications to participate in competitive bidding.

    (a) Public notice of the application process. All applications to 
participate must be filed electronically. The dates and procedures for 
submitting applications to participate in the reverse auction shall be 
announced by public notice.
    (b) Applicant. The applicant identified on the application to 
participate must be the broadcast television licensee that would 
relinquish spectrum usage rights if it becomes a winning bidder. In the 
case of a channel sharing bid, the applicant will be the proposed 
channel sharee.
    (c) Information and certifications provided in the application to 
participate. An applicant may be required to provide the following 
information in its application to participate in the reverse auction:
    (1) The following identifying information:
    (i) If the applicant is an individual, the applicant's name and 
address. If the applicant is a corporation, the name and address of the 
corporate office and the name and title of an officer or director. If 
the applicant is a partnership, the name, citizenship, and address of 
all general partners, and, if a general partner is not a natural 
person, then the name and title of a responsible person for that 
partner, as well. If the applicant is a trust, the name and address of 
the trustee. If the applicant is none of the above, it must identify 
and describe itself and its principals or other responsible persons;
    (ii) Applicant ownership and other information as set forth in 
Sec.  1.2112(a); and
    (iii) List, in the case of a non-profit entity, the name, address, 
and citizenship of each member of the governing board and of any 
educational institution or governmental entity with a controlling 
interest in the applicant, if applicable.
    (2) The identity of the person(s) authorized to take binding action 
in the bidding on behalf of the applicant.
    (3) For each broadcast television license for which the applicant 
intends to submit reverse auction bids:
    (i) The identity of the station and its television channel;
    (ii) Whether it is a full-power or Class A television station;
    (iii) If the license is for a Class A television station, 
certification under penalty of perjury that it is and will remain in 
compliance with the ongoing statutory eligibility requirements to 
remain a Class A station;
    (iv) Whether it is an NCE station and, if so, whether it operates 
on a reserved or non-reserved channel;
    (v) The types of reverse auction bids that the applicant may 
submit;
    (vi) Whether the license for the station is subject to a non-final 
revocation order, has expired and is subject to a non-final 
cancellation order, or if for a Class A station is subject to a non-
final downgrade order and, if the license is subject to such a 
proceeding or order, then an acknowledgement that the Commission will 
place all of its auction proceeds into escrow pending the final outcome 
of the proceeding or order; and
    (vii) Any additional information required to assess the spectrum 
usage rights offered.
    (4) For each broadcast television license for which the applicant 
intends to submit a license relinquishment bid:
    (i) Whether it will control another broadcast station if it becomes 
a winning bidder and terminates operations; and
    (ii) If it will control another broadcast station, an 
acknowledgement that it will remain subject to any pending license 
renewal, as well as any enforcement action, against the station 
offered; or
    (iii) If it will not control another broadcast station, an 
acknowledgement that the Commission will place a share of its auction 
proceeds into escrow to cover any potential forfeiture costs associated 
with any pending license

[[Page 48532]]

renewal or any pending enforcement action against the station offered.
    (5) For each broadcast television license for which the applicant 
intends to submit a channel sharing bid:
    (i) The identity of the channel sharer and the television channel 
the applicant has agreed to share;
    (ii) Any required information regarding the channel sharing 
agreement, including a copy of the executed channel sharing agreement;
    (iii) Certification under penalty of perjury that the channel 
sharing agreement is consistent with all Commission rules and policies, 
and that the applicant accepts any risk that the implementation of the 
channel sharing agreement may not be feasible for any reason, including 
any conflict with requirements for operation on the shared channel;
    (iv) Certification under penalty of perjury that its operation from 
the shared channel facilities will not result in a change to its 
Designated Market Area;
    (v) Certification under penalty of perjury that it can meet the 
community of license coverage requirement set forth in Sec.  73.625(a) 
of this chapter from the shared channel facilities or, if not, that the 
new community of license for its shared channel facilities either meets 
the same or a higher allotment priority as its current community; or, 
if no community meets the same or higher allotment priority, provides 
the next highest priority;
    (vi) Certification under penalty of perjury that the proposed 
channel sharing arrangement will not violate the multiple ownership 
rules, set forth in Sec.  73.3555 of this chapter, based on facts at 
the time the application is submitted; and
    (vii) Certification by the channel sharer under penalty of perjury 
with respect to the certifications described in paragraphs (c)(3)(iii), 
(c)(5)(iii), and (c)(5)(vi) of this section.
    (6) Certification under penalty of perjury that the applicant and 
all of the person(s) disclosed under paragraph (c)(1) of this section 
are not person(s) who have been, for reasons of national security, 
barred by any agency of the Federal Government from bidding on a 
contract, participating in an auction, or receiving a grant. For the 
purposes of this certification, the term ``person'' means an 
individual, partnership, association, joint-stock company, trust, or 
corporation, and the term ``reasons of national security'' means 
matters relating to the national defense and foreign relations of the 
United States.
    (7) Certification that the applicant agrees that it has sole 
responsibility for investigating and evaluating all technical and 
marketplace factors that may have a bearing on the bids it submits in 
the reverse auction.
    (8) Certification that the applicant agrees that the bids it 
submits in the reverse auction are irrevocable, binding offers by the 
applicant.
    (9) Certification that the individual submitting the application to 
participate and providing the certifications is authorized to do so on 
behalf of the applicant, and if such individual is not an officer, 
director, board member, or controlling interest holder of the 
applicant, evidence that such individual has the authority to bind the 
applicant.
    (10) Certification that the applicant is in compliance with all 
statutory and regulatory requirements for participation in the reverse 
auction, including any requirements with respect to the license(s) 
identified in the application to participate.
    (11) Such additional information as may be required.
    (d) Application processing. (1) Any timely submitted application to 
participate will be reviewed for completeness and compliance with the 
Commission's rules. No untimely applications to participate shall be 
reviewed or considered.
    (2) Any application to participate that does not contain all of the 
certifications required pursuant to this section is unacceptable for 
filing, cannot be corrected subsequent to the application filing 
deadline, and will be dismissed with prejudice.
    (3) Applicants will be provided a limited opportunity to cure 
specified defects and to resubmit a corrected application to 
participate. During the resubmission period for curing defects, an 
application to participate may be amended or modified to cure 
identified defects or to make minor amendments or modifications. After 
the resubmission period has ended, an application to participate may be 
amended or modified to make minor changes or correct minor errors in 
the application to participate. Minor amendments may be subject to a 
deadline specified by public notice. Major amendments cannot be made to 
an application to participate after the initial filing deadline. Major 
amendments include, but are not limited to, changes in ownership of the 
applicant that would constitute an assignment or transfer of control, 
changes to any of the required certifications, and the addition or 
removal of licenses identified on the application to participate for 
which the applicant intends to submit reverse auction bids. Minor 
amendments include any changes that are not major, such as correcting 
typographical errors and supplying or correcting information as 
requested to support the certifications made in the application.
    (4) Applicants that fail to correct defects in their applications 
to participate in a timely manner as specified by public notice will 
have their applications to participate dismissed with no opportunity 
for resubmission.
    (5) Applicants shall have a continuing obligation to make any 
amendments or modifications that are necessary to maintain the accuracy 
and completeness of information furnished in pending applications to 
participate. Such amendments or modifications shall be made as promptly 
as possible, and in no case more than five business days after 
applicants become aware of the need to make any amendment or 
modification, or five business days after the reportable event occurs, 
whichever is later. An applicant's obligation to make such amendments 
or modifications to a pending application to participate continues 
until they are made.
    (e) Notice to qualified and non-qualified applicants. Each 
applicant will be notified as to whether it is qualified or not 
qualified to participate in the reverse auction.


Sec.  1.2205  Prohibition of certain communications.

    (a) Definitions. (1) For the purposes of this section, a full power 
broadcast television licensee, or a Class A broadcast television 
licensee, shall include all controlling interests in the licensee, and 
all officers, directors, and governing board members of the licensee.
    (2) For the purposes of this section, the term forward auction 
applicant is defined the same as the term applicant is defined in Sec.  
1.2105(c)(7).
    (b) Certain communications prohibited. (1) Except as provided in 
paragraph (b)(2) of this section, in the broadcast television spectrum 
incentive auction conducted under section 6403 of the Spectrum Act, 
beginning on the deadline for submitting applications to participate in 
the reverse auction and until the results of the incentive auction are 
announced by public notice, all full power and Class A broadcast 
television licensees are prohibited from communicating directly or 
indirectly any incentive auction applicant's bids or bidding strategies 
to any other full power or Class A broadcast television licensee or to 
any forward auction applicant.
    (2) The prohibition described in paragraph (b)(1) of this section 
does not apply to the following:

[[Page 48533]]

    (i) Communications between full power or Class A broadcast 
television licensees if they share a common controlling interest, 
director, officer, or governing board member as of the deadline for 
submitting applications to participate in the reverse auction;
    (ii) Communications between a forward auction applicant and a full 
power or Class A broadcast television licensee if a controlling 
interest, director, officer, or holder of any 10 percent or greater 
ownership interest in the forward auction applicant, as of the deadline 
for submitting short-form applications to participate in the forward 
auction, is also a controlling interest, director, officer, or 
governing board member of the full power or Class A broadcast 
television licensee, as of the deadline for submitting applications to 
participate in the reverse auction; and
    (iii) Communications regarding reverse auction applicants' (but not 
forward auction applicants') bids and bidding strategies between 
parties to a channel sharing agreement executed prior to the deadline 
for submitting applications to participate in the reverse auction and 
disclosed on a reverse auction application.
    (c) Duty to report potentially prohibited communications. A party 
that makes or receives a communication prohibited under paragraph (b) 
of this section shall report such communication in writing immediately, 
and in any case no later than five business days after the 
communication occurs. A party's obligation to make such a report 
continues until the report has been made.
    (d) Procedures for reporting potentially prohibited communications. 
Reports under paragraph (c) of this section shall be filed as directed 
in public notices detailing procedures for bidding in the incentive 
auction. If no public notice provides direction, the party making the 
report shall do so in writing to the Chief of the Auctions and Spectrum 
Access Division, Wireless Telecommunications Bureau, by the most 
expeditious means available, including electronic transmission such as 
email.
    (e) Violations. A party who is found to have violated the antitrust 
laws or the Commission's rules in connection with its participation in 
the competitive bidding process, in addition to any other applicable 
sanctions, may be subject to forfeiture of its winning bid incentive 
payment and revocation of its licenses, where applicable, and may be 
prohibited from participating in future auctions.

    Note 1 to Sec.  1.2205:  References to ``full power broadcast 
television licensees'' and ``Class A broadcast television 
licensees'' are intended to include all broadcast television 
licensees that are or could become eligible to participate in the 
reverse auction, including broadcast television licensees that may 
be parties to a channel sharing agreement.


    Note 2 to Sec.  1.2205:  For the purposes of this section, 
``controlling interests'' include individuals or entities with 
positive or negative de jure or de facto control of the licensee. De 
jure control includes holding 50 percent or more of the voting stock 
of a corporation or holding a general partnership interest in a 
partnership. Ownership interests that are held indirectly by any 
party through one or more intervening corporations may be determined 
by successive multiplication of the ownership percentages for each 
link in the vertical ownership chain and application of the relevant 
attribution benchmark to the resulting product, except that if the 
ownership percentage for an interest in any link in the chain meets 
or exceeds 50 percent or represents actual control, it may be 
treated as if it were a 100 percent interest. De facto control is 
determined on a case-by-case basis. Examples of de facto control 
include constituting or appointing 50 percent or more of the board 
of directors or management committee; having authority to appoint, 
promote, demote, and fire senior executives that control the day-to-
day activities of the licensee; or playing an integral role in 
management decisions.


    Note 3 to Sec.  1.2205: The prohibition described in Sec.  
1.2205(b)(1) applies to controlling interests, officers, directors, 
and governing board members of a full power or Class A broadcast 
television licensee as of the deadline for submitting applications 
to participate in the reverse auction, and any additional such 
parties at any subsequent point prior to the announcement by public 
notice of the results of the incentive auction. Thus, if, for 
example, a full power or Class A broadcast television licensee 
appoints a new officer after the application deadline, that new 
officer would be subject to the prohibition in Sec.  1.2205(b)(1), 
but would not be included within the exceptions described in 
Sec. Sec.  1.2205(b)(2)(i) and (ii).

Sec.  1.2206  Confidentiality of Commission-held data.

    (a) The Commission will take all reasonable steps necessary to 
protect all Confidential Broadcaster Information for all reverse 
auction applicants from the time the broadcast television licensee 
applies to participate in the reverse auction until the reassignments 
and reallocations under section 6403(b)(1)(B) of the Spectrum Act 
become effective or until two years after public notice that the 
reverse auction is complete and that no such reassignments and 
reallocations shall become effective.
    (b) In addition, if reassignments and reallocations under section 
6403(b)(1)(B) of the Spectrum Act become effective, the Commission will 
continue to take all reasonable steps necessary to protect Confidential 
Broadcaster Information pertaining to any unsuccessful reverse auction 
bid and pertaining to any unsuccessful application to participate in 
the reverse auction until two years after the effective date.
    (c) Notwithstanding paragraphs (a) and (b) of this section, the 
Commission may disclose Confidential Broadcaster Information if 
required to do so by law, such as by court order.
    (d) Confidential Broadcaster Information includes the following 
Commission-held data of a broadcast television licensee participating 
in the reverse auction:
    (1) The name of the applicant licensee;
    (2) The licensee's channel number, call sign, facility 
identification number, and network affiliation; and
    (3) Any other information that may reasonably be withheld to 
protect the identity of the licensee, as determined by the Commission.


Sec.  1.2207  Two competing participants required.

    The Commission may not enter into an agreement for a licensee to 
relinquish spectrum usage rights in exchange for a share of the 
proceeds from the related forward auction assigning new spectrum 
licenses unless at least two competing licensees participate in the 
reverse auction.


Sec.  1.2208  Public notice of auction completion and auction results.

    Public notice shall be provided when the reverse auction is 
complete and when the forward auction is complete. With respect to the 
broadcast television spectrum incentive auction conducted under section 
6403 of the Spectrum Act, public notice shall be provided of the 
results of the reverse auction, forward auction, and repacking, and 
shall indicate that the reassignments of television channels and 
reallocations of broadcast television spectrum are effective.


Sec.  1.2209  Disbursement of incentive payments.

    A winning bidder shall submit the necessary financial information 
to facilitate the disbursement of the winning bidder's incentive 
payment. Specific procedures for submitting financial information, 
including applicable deadlines, will be set out by public notice.

0
12. Section 1.9005 is amended by adding paragraph (kk) to read as 
follows:

[[Page 48534]]

Sec.  1.9005  Included services.

* * * * *
    (kk) The 600 MHz band (part 27 of this chapter).

PART 2--FREQUENCY ALLOCATIONS AND RADIO TREATY MATTERS; GENERAL 
RULES AND REGULATIONS

0
13. The authority citation for part 2 continues to read as follows:

    Authority:  47 U.S.C. 154, 302a, 303, and 336, unless otherwise 
noted.


0
14. Section 2.106 is amended by revising page 28 as follows:


Sec.  2.106  Table of Frequency Allocations.

* * * * *
BILLING CODE 6712-01-P

[[Page 48535]]

[GRAPHIC] [TIFF OMITTED] TR15AU14.004

BILLING CODE 6712-01-C

[[Page 48536]]


0
15. Section 2.1033 is amended by adding paragraph (c)(19)(iii) to read 
as follows:


Sec.  2.1033  Application for certification.

    (c) * * *
    (19) * * *
    (iii) 600 MHz band shall include a statement indicating compliance 
with Sec.  27.75 of this chapter.
* * * * *

PART 15--RADIO FREQUENCY DEVICES

0
16. The authority citation for part 15 continues to read as follows:

    Authority: 47 U.S.C. 154, 302a, 303, 304, 307, 336, 544a, and 
549.

0
17. Section 15.707 is amended by redesignating paragraph (a) as (a)(1) 
and adding paragraph (a)(2) to read as follows:


Sec.  15.707  Permissible channels of operation.

    (a)(1) * * *
    (2) TVBD operations in 600 MHz band. TVBDs may operate on 
frequencies in the 600 MHz Band as defined in part 27 of this chapter 
in areas where 600 MHz Band licensees have not commenced operations.
* * * * *
0
18. Section 15.713 is amended by adding paragraphs (b)(2)(iv) and 
(h)(10) to read as follows:


Sec.  15.713  TV bands database.

    (b) * * *
    (2) * * *
    (iv) 600 MHz band operations under part 27 of this chapter in areas 
where the licensee has commenced operations.
* * * * *
    (h) * * *
    (10) 600 MHz band operations under part 27 of this chapter in areas 
where the licensee has commenced operations.
    (i) License area of the 600 MHz band licensee, as defined under 
part 27 of this chapter;
    (ii) Identification of the frequencies on which the part 27 600 MHz 
wireless licensee has commenced operations;
    (iii) Call sign.

PART 27--MISCELLANEOUS WIRELESS COMMUNICATIONS SERVICES

0
19. The authority citation for part 27 is revised to read as follows:

    Authority:  47 U.S.C. 154, 301, 302a, 303, 307, 309, 332, 336, 
337, 1403, 1404, 1451, and 1452, unless otherwise noted.


0
20. Section 27.1 is amended by adding paragraph (b)(14) to read as 
follows:


Sec.  27.1  Basis and purpose.

* * * * *
    (b) * * *
    (14) Spectrum in the 470-698 MHz UHF band that has been reallocated 
and redesignated for flexible fixed and mobile use pursuant to section 
6403 of the Spectrum Act. The specific frequencies and number of 
channel blocks will be determined in light of further proceedings 
pursuant to Docket No. 12-268 and the rule will be updated accordingly 
pursuant to a future public notice.
* * * * *

0
21. Section 27.4 is amended by adding the definitions ``600 MHz 
service'', ``Post-auction transition period'', and ``Spectrum Act'' in 
alphanumerical order to read as follows:


Sec.  27.4  Terms and definitions.

    600 MHz service. A radiocommunication service licensed pursuant to 
this part for the frequency bands specified in Sec.  27.5(l).
* * * * *
    Post-auction transition period. The 39-month period commencing upon 
the public release of the Channel Reassignment Public Notice as defined 
in Sec.  73.3700(a) of this chapter.
* * * * *
    Spectrum Act. The term Spectrum Act means Title VI of the Middle 
Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96).
* * * * *

0
22. Section 27.5 is amended by adding paragraph (l) to read as follows:


Sec.  27.5  Frequencies.

* * * * *
    (l) 600 MHz band. In accordance with the terms and conditions 
established in Docket No. 12-268, pursuant to section 6403 of the 
Spectrum Act, paired channel blocks of 5+5 megahertz are available for 
assignment on a Partial Economic Area basis. The specific frequencies 
and number of channel blocks will be determined in light of further 
proceedings pursuant to Docket No. 12-268 and the rule will be updated 
accordingly pursuant to a future public notice.

0
23. Section 27.6 is amended by adding paragraph (l) to read as follows:


Sec.  27.6  Service areas.

* * * * *
    (l) 600 MHz band. Service areas for the 600 MHz band are based on 
Partial Economic Areas (PEAs), as defined by Public Notice: ``Wireless 
Telecommunications Bureau Provides Details About Partial Economic 
Areas,'' DA 14-759, dated June 2, 2014. The service areas of PEAs that 
border the U.S. coastline of the Gulf of Mexico extend 12 nautical 
miles from the U.S. Gulf coastline. The service area of the Gulf of 
Mexico PEA that comprises the water area of the Gulf of Mexico extends 
from 12 nautical miles off the U.S. Gulf coast outward into the Gulf. 
Maps of the PEAs and the Federal Register notice that established the 
416 PEAs are available for public inspection and copying at the 
Reference Center, Room CY A-257, 445 12th St. SW., Washington, DC 
20554. These maps and data are also available on the FCC Web site at: 
http://www.fcc.gov/oet/info/maps/areas/. The specific title, reference 
number, and date of the public notice will be determined in light of 
further proceedings pursuant to Docket No. 12-268 and the rule will be 
updated accordingly.

0
24. Section 27.11 is amended by adding paragraph (k) to read as 
follows:


Sec.  27.11  Initial authorization.

* * * * *
    (k) 600 MHz band. Initial authorizations for the 600 MHz band will 
be based on Partial Economic Areas (PEAs), as specified in Sec.  
27.6(1), and, shall be paired channels that each consist of a 5 
megahertz channel block in the 600 MHz downlink band, paired with a 5 
megahertz channel block in the 600 MHz uplink band. The specific 
frequencies and number of channel blocks will be determined in light of 
further proceedings pursuant to Docket No. 12-268 and the rule will be 
updated accordingly pursuant to a future public notice.

0
25. Section 27.13 is amended by adding paragraph (l) to read as 
follows:


Sec.  27.13  License period.

* * * * *
    (l) 600 MHz band. Authorizations for the 600 MHz band will have an 
initial term not to exceed twelve years from the date of issuance and 
ten years from the date of any subsequent license renewal.

0
26. Section 27.14 is amended by revising the first sentence of 
paragraphs (a), (f), (k) and adding paragraph (t) to read as follows:


Sec.  27.14  Construction requirements; Criteria for renewal.

    (a) AWS and WCS licensees, with the exception of WCS licensees 
holding authorizations for the 600 MHz band, Block A in the 698-704 MHz 
and 728-734 MHz bands, Block B in the 704-710 MHz and 734-740 MHz 
bands, Block E in the 722-728 MHz band, Block C, C1 or C2 in the 746-
757 MHz and 776-787 MHz bands, Block A in the 2305-2310 MHz and 2350-
2355 MHz bands, Block B in the 2310-2315 MHz and 2355-2360 MHz bands, 
Block C in the 2315-2320

[[Page 48537]]

MHz band, and Block D in the 2345-2350 MHz band, and with the exception 
of licensees holding AWS authorizations in the 1915-1920 MHz and 1995-
2000 MHz bands, the 2000-2020 MHz and 2180-2200 MHz bands, or 1695-1710 
MHz, 1755-1780 MHz and 2155-2180 MHz bands, must, as a performance 
requirement, make a showing of ``substantial service'' in their license 
area within the prescribed license term set forth in Sec.  27.13. * * *
* * * * *
    (f) Comparative renewal proceedings do not apply to WCS licensees 
holding authorizations for the 600 MHz band, 698-746 MHz, 747-762 MHz, 
and 777-792 MHz bands or licensees holding AWS authorizations for the 
1915-1920 MHz and 1995-2000 MHz bands or the 2000-2020 MHz and 2180-
2200 MHz bands, or the 1695-1710 MHz, or the 1755-1780 MHz and 2155-
2180 MHz bands. * * *
* * * * *
    (k) Licensees holding WCS or AWS authorizations in the spectrum 
blocks enumerated in paragraphs (g), (h), (i), (q), (r), (s), and (t) 
of this section, including any licensee that obtained its license 
pursuant to the procedures set forth in paragraph (j) of this section, 
shall demonstrate compliance with performance requirements by filing a 
construction notification with the Commission, within 15 days of the 
expiration of the applicable benchmark, in accordance with the 
provisions set forth in Sec.  1.946(d) of this chapter. * * *
* * * * *
    (t) The following provisions apply to any licensee holding an 
authorization in the 600 MHz band:
    (1) A licensee shall provide reliable signal coverage and offer 
service within six (6) years from the date of the initial license to at 
least forty (40) percent of the population in each of its license areas 
(``Interim Buildout Requirement'').
    (2) A licensee shall provide reliable signal coverage and offer 
service within twelve (12) years from the date of the initial license 
to at least seventy-five (75) percent of the population in each of its 
license areas (``Final Buildout Requirement'').
    (3) If a licensee fails to establish that it meets the Interim 
Buildout Requirement for a particular licensed area, then the Final 
Buildout Requirement (in this paragraph (t)) and the license term (as 
set forth in Sec.  27.13(l)) for each license area in which it fails to 
meet the Interim Buildout Requirement shall be accelerated by two (2) 
years (from twelve (12) to ten (10) years).
    (4) If a licensee fails to establish that it meets the Final 
Buildout Requirement for a particular license area, its authorization 
for each license area in which it fails to meet the Final Buildout 
Requirement shall terminate automatically without Commission action, 
and the licensee will be ineligible to regain it if the Commission 
makes the license available at a later date.
    (5) To demonstrate compliance with these performance requirements, 
licensees shall use the most recently available decennial U.S. Census 
Data at the time of measurement and shall base their measurements of 
population served on areas no larger than the Census Tract level. The 
population within a specific Census Tract (or other acceptable 
identifier) will be deemed served by the licensee only if it provides 
reliable signal coverage to and offers service within the specific 
Census Tract (or other acceptable identifier). To the extent the Census 
Tract (or other acceptable identifier) extends beyond the boundaries of 
a license area, a licensee with authorizations for such areas may 
include only the population within the Census Tract (or other 
acceptable identifier) towards meeting the performance requirement of a 
single, individual license. For the Gulf of Mexico license area, the 
licensee shall demonstrate compliance with these performance 
requirements, using off-shore platforms, including production, 
manifold, compression, pumping and valving platforms as a proxy for 
population in the Gulf of Mexico.
    (6) An applicant for renewal of a license covered by this paragraph 
(t) must make a renewal showing, independent of its performance 
requirements, as a condition of each renewal. The showing must include 
a detailed description of the applicant's provision of service during 
the entire license period and address:
    (i) The level and quality of service provided by the applicant 
(including the population served, the area served, the number of 
subscribers, the services offered);
    (ii) The date service commenced, whether service was ever 
interrupted, and the duration of any interruption or outage;
    (iii) The extent to which service is provided to rural areas;
    (iv) The extent to which service is provided to qualifying tribal 
land as defined in Sec.  1.2110(f)(3)(i) of this chapter; and
    (v) Any other factors associated with the level of service to the 
public.

0
27. Section 27.15 is amended by revising the first sentence in 
paragraph (d)(1)(i); revising paragraph (d)(1)(iii); revising the first 
sentence in paragraph (d)(2)(i); and revising paragraph (d)(2)(iii) to 
read as follows:


Sec.  27.15  Geographic partitioning and spectrum disaggregation.

* * * * *
    (d) * * *
    (1) * * *
    (i) Except for WCS licensees holding authorizations for the 600 MHz 
band, Block A in the 698-704 MHz and 728-734 MHz bands, Block B in the 
704-710 MHz and 734-740 MHz bands, Block E in the 722-728 MHz band, or 
Blocks C, C1, and C2 in the 746-757 MHz and 776-787 MHz bands; and for 
licensees holding AWS authorizations in the 1915-1920 MHz and 1995-2000 
MHz bands, the 2000-2020 MHz and 2180-2200 MHz bands; or the 1695-1710 
MHz, 1755-1780 MHz and 2155-2180 MHz bands the following rules apply to 
WCS and AWS licensees holding authorizations for purposes of 
implementing the construction requirements set forth in Sec.  27.14. * 
* *
* * * * *
    (iii) For licensees holding authorizations for the 600 MHz band, 
AWS authorizations in the 1915-1920 MHz and 1995-2000 MHz bands, or the 
2000-2020 MHz and 2180-2200 MHz bands, or the 1695-1710 MHz, 1755-1780 
MHz and 2155-2180 MHz bands, the following rules apply for purposes of 
implementing the construction requirements set forth in Sec.  27.14. 
Each party to a geographic partitioning must individually meet any 
service-specific performance requirements (i.e., construction and 
operation requirements). If a partitioner or partitionee fails to meet 
any service-specific performance requirements on or before the required 
date, then the consequences for this failure shall be those enumerated 
in Sec.  27.14(q) for 2000-2020 MHz and 2180-2200 MHz licenses, those 
enumerated in Sec.  27.14(r) for 1915-1920 MHz and 1995-2000 MHz 
licenses, and those enumerated in Sec.  27.14(s) for 1695-1710 MHz, 
1755-1780 MHz and 2155-2180 MHz licenses, and those enumerated in Sec.  
27.14(t) for 600 MHz band licenses.
    (2) * * *
    (i) Except for WCS licensees holding authorizations for the 600 MHz 
band, Block A in the 698-704 MHz and 728-734 MHz bands, Block B in the 
704-710 MHz and 734-740 MHz bands, Block E in the 722-728 MHz band, or 
Blocks C, C1, or C2 in the 746-757 MHz and 776-787 MHz bands; and for 
licensees holding AWS authorizations in the 1915-1920 MHz and 1995-2000 
MHz bands, the 2000-2020 MHz and 2180-

[[Page 48538]]

2200 MHz bands or the 1695-1710 MHz, 1755-1780 MHz and 2155-2180 MHz 
bands; the following rules apply to WCS and AWS licensees holding 
authorizations for purposes of implementing the construction 
requirements set forth in Sec.  27.14. * * *
* * * * *
    (iii) For licensees holding authorizations for the 600 MHz band, 
AWS authorizations in the 1915-1920 MHz and 1995-2000 MHz bands, or the 
2000-2020 MHz and 2180-2200 MHz bands, or the 1695-1710 MHz, 1755-1780 
MHz and 2155-2180 MHz bands, the following rules apply for purposes of 
implementing the construction requirements set forth in Sec.  27.14. 
Each party to a spectrum disaggregation must individually meet any 
service-specific performance requirements (i.e., construction and 
operation requirements). If a disaggregator or a disaggregatee fails to 
meet any service-specific performance requirements on or before the 
required date, then the consequences for this failure shall be those 
enumerated in Sec.  27.14(q) for 2000-2020 MHz and 2180-2200 MHz 
licenses, those enumerated in Sec.  27.14(r) for 1915-1920 MHz and 
1995-2000 MHz licenses, those enumerated in Sec.  27.14(s) for 1695-
1710 MHz, 1755-1780 MHz and 2155-2180 MHz licenses, and those 
enumerated in Sec.  27.14(t) for 600 MHz band licenses.

0
28. Section 27.17 is amended by revising the section heading and 
paragraphs (a) introductory text, (a)(1), (b), and (c) to read as 
follows:


Sec.  27.17  Discontinuance of service in the 600 MHz band and the 
1695-1710 MHz, 1755-1780 MHz, 1915-1920 MHz, 1995-2000 MHz, 2000-2020 
MHz, 2155-2180 MHz, and 2180-2200 MHz bands.

    (a) Termination of authorization. A 600 MHz band authorization and 
an AWS authorization in the 1695-1710 MHz, 1755-1780 MHz, 1915-1920 
MHz, 1995-2000 MHz, 2000-2020 MHz, 2155-2180 MHz, and 2180-2200 MHz 
bands will automatically terminate, without specific Commission action, 
if the licensee permanently discontinues service either during the 
initial license term or during any subsequent license term, as follows:
    (1) After the interim buildout deadline as specified in Sec.  
27.14(r), (s), or (t) as applicable (where the licensee meets the 
Interim Buildout Requirement), or after the accelerated Final Buildout 
Requirement (where the licensee failed to meet the Interim Buildout 
Requirement).
* * * * *
    (b) For licensees with common carrier or non-common carrier 
regulatory status that hold 600 MHz band authorizations or AWS 
authorizations in the 1695-1710 MHz, 1755-1780 MHz, 1915-1920 MHz, 
1995-2000 MHz, 2000-2020 MHz, 2155-2180 MHz, and 2180-2200 MHz bands, 
permanent discontinuance of service is defined as 180 consecutive days 
during which a licensee does not provide service to at least one 
subscriber that is not affiliated with, controlled by, or related to 
the licensee in the individual license area. For licensees with 
private, internal communications regulatory status that hold 600 MHz 
band authorizations or AWS authorizations in the 1695-1710 MHz, 1755-
1780 MHz, 1915-1920 MHz, 1995-2000 MHz, 2000-2020 MHz, 2155-2180 MHz, 
and 2180-2200 MHz bands, permanent discontinuance of service is defined 
as 180 consecutive days during which a licensee does not operate.
    (c) Filing requirements. A licensee that holds a 600 MHz band 
authorization or an AWS authorization in the 1695-1710 MHz, 1755-1780 
MHz, 1915-1920 MHz, 1995-2000 MHz, 2000-2020 MHz, 2155-2180 MHz, and 
2180-2200 MHz bands, that permanently discontinues service as defined 
in this section must notify the Commission of the discontinuance within 
10 days by filing FCC Form 601 or 605 requesting license cancellation. 
An authorization will automatically terminate, without specific 
Commission action, if service is permanently discontinued as defined in 
this section, even if a licensee fails to file the required form 
requesting license cancellation.

0
29. Section 27.19 is added to read as follows:


Sec.  27.19  Requirements for operation of base and fixed stations in 
the 600 MHz downlink band in close proximity to Radio Astronomy 
Observatories.

    (a) Licensees must make reasonable efforts to protect the radio 
astronomy observatory at Green Bank, WV, Arecibo, PR, and those 
identified in Sec.  15.712(h)(3) of this chapter as part of the Very 
Long Baseline Array (VLBA) from interference.
    (b) 600 MHz band base and fixed stations in the 600 MHz downlink 
band within 25 kilometers of VLBA observatories are subject to 
coordination with the National Science Foundation (NSF) prior to 
commencing operations. The appropriate NSF contact point to initiate 
coordination is Electromagnetic Spectrum Manager, NSF, 4201 Wilson 
Blvd., Suite 1045, Arlington, VA 22203, fax 703-292-9034, email 
esm@nsf.gov.
    (c) Any licensee that intends to operate base and fixed stations in 
the 600 MHz downlink band in locations near the Radio Astronomy 
Observatory site located in Green Bank, Pocahontas County, West 
Virginia, or near the Arecibo Observatory in Puerto Rico, must comply 
with the provisions in Sec.  1.924 of this chapter.

0
30. Section 27.50 is amended by revising paragraphs (c) introductory 
text, (c)(5) introductory text, (c)(9), (c)(10), and the headings to 
Tables 1 through 4 to read as follows:


Sec.  27.50  Power limits and duty cycle.

* * * * *
    (c) The following power and antenna height requirements apply to 
stations transmitting in the 600 MHz band and the 698-746 MHz band:
* * * * *
    (5) Licensees, except for licensees operating in the 600 MHz 
downlink band, seeking to operate a fixed or base station located in a 
county with population density of 100 or fewer persons per square mile, 
based upon the most recently available population statistics from the 
Bureau of the Census, and transmitting a signal at an ERP greater than 
1000 watts must:
* * * * *
    (9) Control and mobile stations in the 698-746 MHz band are limited 
to 30 watts ERP.
    (10) Portable stations (hand-held devices) in the 600 MHz uplink 
band and the 698-746 MHz band, and fixed and mobile stations in the 600 
MHz uplink band are limited to 3 watts ERP.
* * * * *
    Table 1 to Sec.  27.50--Permissible Power and Antenna Heights for 
Base and Fixed Stations in the 757-758 and 775-776 MHz Bands and for 
Base and Fixed Stations in the 600 MHz, 698-757 MHz, 758-763 MHz, 776-
787 MHz and 788-793 MHz Bands Transmitting a Signal With an Emission 
Bandwidth of 1 MHz or Less.
* * * * *
    Table 2 to Sec.  27.50--Permissible Power and Antenna Heights for 
Base and Fixed Stations in the 600 MHz, 698-757 MHz, 758-763 MHz, 776-
787 MHz and 788-793 MHz Bands Transmitting a Signal With an Emission 
Bandwidth of 1 MHz or Less.
* * * * *
    Table 3 to Sec.  27.50--Permissible Power and Antenna Heights for 
Base and Fixed Stations in the 600 MHz, 698-757 MHz, 758-763 MHz, 776-
787 MHz and 788-793 MHz Bands Transmitting a Signal With an Emission 
Bandwidth Greater than 1 MHz.
* * * * *
    Table 4 to Sec.  27.50--Permissible Power and Antenna Heights for 
Base and Fixed

[[Page 48539]]

Stations in the 600 MHz, 698-757 MHz, 758-763 MHz, 776-787 MHz and 788-
793 MHz Bands Transmitting a Signal With an Emission Bandwidth Greater 
than 1 MHz
* * * * *

0
31. Section 27.53 is amended by revising paragraph (g) to read as 
follows:


Sec.  27.53  Emission limits.

* * * * *
    (g) For operations in the 600 MHz band and the 698-746 MHz band, 
the power of any emission outside a licensee's frequency band(s) of 
operation shall be attenuated below the transmitter power (P) within 
the licensed band(s) of operation, measured in watts, by at least 43 + 
10 log (P) dB. Compliance with this provision is based on the use of 
measurement instrumentation employing a resolution bandwidth of 100 
kilohertz or greater. However, in the 100 kilohertz bands immediately 
outside and adjacent to a licensee's frequency block, a resolution 
bandwidth of at least 30 kHz may be employed.
* * * * *

0
32. Section 27.55 is amended by revising paragraph (a)(2) to read as 
follows:


Sec.  27.55  Power strength limits.

    (a) * * *
    (2) 600 MHz, 698-758, and 775-787 MHz bands: 40 dB[mu]V/m.
* * * * *

0
33. Section 27.57 is amended by revising paragraph (b) to read as 
follows:


Sec.  27.57  International coordination.

* * * * *
    (b) Wireless operations in the 512-608 MHz, 614-763 MHz, 775-793 
MHz, and 805-806 MHz bands are subject to current and future 
international agreements between the United States and Canada and the 
United States and Mexico. Unless otherwise modified by international 
treaty, licenses must not cause interference to, and must accept 
harmful interference from, television broadcast operations in Mexico 
and Canada, where these services are co-primary in the band.
* * * * *

0
34. Section 27.75 is amended by adding paragraph (a)(2) to read as 
follows:


Sec.  27.75  Basic interoperability requirement.

* * * * *
    (a) * * *
    (2) Mobile and portable stations that operate on any portion of 
frequencies in the 600 MHz band must be capable of operating on all 
frequencies in the 600 MHz band using the same air interfaces that the 
equipment utilizes on any frequencies in the 600 MHz band.
* * * * *

0
35. Add subpart N to part 27 to read as follows:

Subpart N--600 MHz Band

Sec.
27.1300 600 MHz band subject to competitive bidding.
27.1301 Designated entities in the 600 MHz band.


Sec.  27.1300  600 MHz band subject to competitive bidding.

    As required by section 6403(c) of the Spectrum Act, applications 
for 600 MHz band initial licenses are subject to competitive bidding. 
The general competitive bidding procedures set forth in 47 CFR part 1, 
subpart Q will apply unless otherwise provided in this subpart.


Sec.  27.1301  Designated entities in the 600 MHz band.

    Eligibility for small business provisions:
    (a) Small business. (1) A small business is an entity that, 
together with its affiliates, its controlling interests, the affiliates 
of its controlling interests, and the entities with which it has an 
attributable material relationship, has average gross revenues not 
exceeding $40 million for the preceding three (3) years.
    (2) A very small business is an entity that, together with its 
affiliates, its controlling interests, the affiliates of its 
controlling interests, and the entities with which it has an 
attributable material relationship, has average gross revenues not 
exceeding $15 million for the preceding three (3) years.
    (b) Bidding credits. A winning bidder that qualifies as a small 
business as defined in this section or a consortium of small businesses 
may use the bidding credit specified in Sec.  1.2110(f)(2)(iii) of this 
chapter. A winning bidder that qualifies as a very small business as 
defined in this section or a consortium of very small businesses may 
use the bidding credit specified in Sec.  1.2110(f)(2)(ii) of this 
chapter.

PART 73--RADIO BROADCAST SERVICES

0
36. The authority citation for part 73 continues to read:

    Authority: 47 U.S.C. 154, 303, 334, 336, and 339.

0
37. Section 73.3700 is revised to read as follows:


Sec.  73.3700  Post-Incentive Auction Licensing and Operation.

    (a) Definitions--(1) Broadcast television station. For purposes of 
this section, broadcast television station means full power television 
stations and Class A television stations.
    (2) Channel reassignment public notice. For purposes of this 
section, Channel Reassignment Public Notice means the public notice to 
be released upon the completion of the broadcast television spectrum 
incentive auction conducted under section 6403 of the Spectrum Act 
specifying the new channel assignments and technical parameters of any 
broadcast television stations that are reassigned to new channels.
    (3) Channel sharee station. For purposes of this section, channel 
sharee station means a broadcast television station for which a winning 
channel sharing bid, as defined in Sec.  1.2200(d) of this chapter, was 
submitted.
    (4) Channel sharer station. For purposes of this section, channel 
sharer station means a broadcast television station that shares its 
television channel with a channel sharee.
    (5) Channel sharing agreement (CSA). For purposes of this section, 
channel sharing agreement or CSA means an executed agreement between 
the licensee of a channel sharee station or stations and the licensee 
of a channel sharer station governing the use of the shared television 
channel.
    (6) High-VHF-to-Low-VHF station. For purposes of this section, 
High-VHF-to-Low-VHF station means a broadcast television station for 
which a winning high-VHF-to-low-VHF bid, as defined in Sec.  1.2200(f) 
of this chapter, was submitted.
    (7) License relinquishment station. For purposes of this section, 
license relinquishment station means a broadcast television station for 
which a winning license relinquishment bid, as defined in Sec.  
1.2200(g) of this chapter, was submitted.
    (8) MVPD. For purposes of this section, MVPD means a person such 
as, but not limited to, a cable operator, a multichannel multipoint 
distribution service, a direct broadcast satellite service, or a 
television receive-only satellite program distributor, who makes 
available for purchase, by subscribers or customers, multiple channels 
of video programming as set forth in section 602 of the Communications 
Act of 1934 (47 U.S.C. 522).
    (9) Pre-auction channel. For purposes of this section, pre-auction 
channel means the channel that is licensed to a broadcast television 
station on the date

[[Page 48540]]

that the Channel Reassignment Public Notice is released.
    (10) Predetermined cost estimate. For purposes of this section, 
predetermined cost estimate means the estimated cost of an eligible 
expense as generally determined by the Media Bureau in a catalog of 
expenses eligible for reimbursement.
    (11) Post-auction channel. For purposes of this section, post-
auction channel means the channel specified in the Channel Reassignment 
Public Notice or a channel authorized by the Media Bureau in a 
construction permit issued after the date that the Channel Reassignment 
Public Notice is released under the procedures set forth in paragraph 
(b) of this section.
    (12) Reassigned station. For purposes of this section, a reassigned 
station means a broadcast television station that is reassigned to a 
new channel in the Channel Reassignment Public Notice, not including 
channel sharing stations, UHF-to-VHF stations, or High-VHF-to-Low-VHF 
stations.
    (13) Reimbursement period. For purposes of this section, 
reimbursement period means the period ending three years after the 
completion of the forward auction pursuant to section 6403(b)(4)(D) of 
the Spectrum Act.
    (14) Spectrum Act. The term Spectrum Act means Title VI of the 
Middle Class Tax Relief and Job Creation Act of 2012 (Pub. L. 112-96).
    (15) Transitioning station. For purposes of this section, a 
transitioning station means a:
    (i) Reassigned station,
    (ii) UHF-to-VHF station,
    (iii) High-VHF-to-Low-VHF station,
    (iv) License relinquishment station, or
    (v) A channel sharee or sharer station.
    (16) TV broadcaster relocation fund. For purposes of this section, 
the TV Broadcaster Relocation Fund means the fund established by 
section 6403(d)(1) of the Spectrum Act.
    (17) UHF-to-VHF station. For purposes of this section, UHF-to-VHF 
station means a television station for which a winning UHF-to-VHF bid, 
as defined in Sec.  1.2200(l) of this chapter, was submitted.
    (b) Post-auction licensing--(1) Construction permit applications. 
(i) Licensees of reassigned stations, UHF-to-VHF stations, and High-
VHF-to-Low-VHF stations must file a minor change application for a 
construction permit for the channel specified in the Channel 
Reassignment Public Notice using FCC Form 301, 301-CA, or 340 within 
three months of the release date of the Channel Reassignment Public 
Notice. Licensees that are unable to meet this filing deadline may 
request a waiver of the deadline no later than 30 days prior to the 
deadline.
    (ii) A licensee of a reassigned station that is reassigned from one 
channel to a different channel within its existing band will be 
permitted to propose transmission facilities in its construction permit 
application that will extend its coverage contour, as defined by the 
technical parameters specified in the Channel Reassignment Public 
Notice, if such facilities:
    (A) Are necessary to achieve the coverage contour specified in the 
Channel Reassignment Public Notice or to address loss of coverage area 
resulting from the new channel assignment;
    (B) Will not extend a full power television station's noise limited 
contour or a Class A television station's protected contour by more 
than one percent in any direction; and
    (C) Will not cause new interference, other than a rounding 
tolerance of 0.5 percent, to any other broadcast television station.
    (iii) The licensee of a UHF-to-VHF station or High-VHF-to-Low-VHF 
station will be permitted to propose transmission facilities in its 
construction permit application that will extend its coverage contour, 
as defined by the technical parameters specified in the Channel 
Reassignment Public Notice, if the proposed facility will not cause new 
interference, other than a rounding tolerance of 0.5 percent, to any 
other broadcast television station.
    (iv) The licensee of a reassigned station, a UHF-to-VHF station, or 
a High-VHF-to-Low-VHF station that, for reasons beyond its control, is 
unable to construct facilities that meet the technical parameters 
specified in the Channel Reassignment Public Notice, or the permissible 
contour coverage variance from those technical parameters specified in 
paragraph (b)(1)(ii) or (iii) of this section, may request a waiver of 
the construction permit application deadline specified in paragraph 
(b)(1)(i) of this section no later than 30 days prior to the deadline. 
If its waiver request is granted, the licensee will be afforded an 
opportunity to submit an application for a construction permit pursuant 
to paragraph (b)(2)(i) or (ii) of this section in a priority filing 
window to be announced by the Media Bureau by public notice.
    (v) Construction permit applications filed pursuant to paragraph 
(b)(1)(i) of this section will be afforded expedited processing if the 
application:
    (A) Does not seek to expand the coverage area, as defined by the 
technical parameters specified in the Channel Reassignment Public 
Notice, in any direction;
    (B) Seeks authorization for facilities that are no more than five 
percent smaller than those specified in the Channel Reassignment Public 
Notice with respect to predicted population served; and
    (C) Is filed within the three-month deadline specified in paragraph 
(b)(1)(i) of this section.
    (vi) Delegation of authority. The Commission delegates authority to 
the Chief, Media Bureau to establish construction periods for 
reassigned stations, UHF-to-VHF stations, and High-VHF-to-Low-VHF 
stations.
    (2) Applications for alternate channels and expanded facilities--
(i) Alternate channels. The licensee of a reassigned station, a UHF-to-
VHF station, or a High-VHF-to-Low-VHF station will be permitted to file 
a major change application for a construction permit for an alternate 
channel on FCC Form 301, 301-CA, or 340 during a filing window to be 
announced by the Media Bureau by public notice, provided that:
    (A) The licensee of a UHF-to-VHF station cannot request an 
alternate UHF channel;
    (B) The licensee of a UHF-to-VHF station that specified the high-
VHF band or the low-VHF band in its UHF-to-VHF bid cannot request a VHF 
channel outside of the assigned band; and
    (C) The licensee of a High-VHF-to-Low-VHF station cannot request an 
alternate high-VHF channel.
    (ii) Expanded facilities. The licensee of a reassigned station, a 
UHF-to-VHF station, or a High-VHF-to-Low-VHF station will be permitted 
to file a minor change application for a construction permit on FCC 
Form 301, 301-CA, or 340 during a filing window to be announced by the 
Media Bureau by public notice, in order to request a change in the 
technical parameters specified in the Channel Reassignment Public 
Notice with respect to height above average terrain (HAAT), effective 
radiated power (ERP), or transmitter location that would be considered 
a minor change under Sec. Sec.  73.3572(a)(1) and (2) or 74.787(b) of 
this chapter.
    (iii) Delegation of authority. The Commission delegates authority 
to the Chief, Media Bureau to:
    (A) Announce filing opportunities for alternate channels and 
expanded facilities applications and specifying appropriate processing 
guidelines, including the standards to qualify for priority filing, 
cut-off protections, and means to avoid or resolve mutual exclusivity 
between applications; and

[[Page 48541]]

    (B) Establish construction periods for permits authorizing 
alternate channels or expanded facilities.
    (3) License applications for channel sharing stations. The licensee 
of each channel sharee station and channel sharer station must file an 
application for a license for the shared channel using FCC Form 302-DTV 
or 302-CA within three months of the date that the channel sharee 
station licensee receives its incentive payment pursuant to section 
6403(a)(1) of the Spectrum Act.
    (4) Deadlines to terminate operations on pre-auction channels. (i) 
The licensee of a license relinquishment station must comply with the 
notification and cancellation procedures in Sec.  73.1750 and terminate 
operations on its pre-auction channel within three months of the date 
that the licensee receives its incentive payment pursuant to section 
6403(a)(1) of the Spectrum Act.
    (ii) The licensee of a channel sharee station must comply with the 
notification and cancellation procedures in Sec.  73.1750 and terminate 
operations on its pre-auction channel within three months of the date 
that the licensee receives its incentive payment pursuant to section 
6403(a)(1) of the Spectrum Act.
    (iii) All reassigned stations, UHF-to-VHF stations, and High-VHF-
to-Low-VHF stations must cease operating on their pre-auction channel 
once such station begins operating on its post-auction channel or by 
the deadline specified in its construction permit for its post-auction 
channel, whichever occurs earlier, and in no event later than the end 
of the post-auction transition period as defined in Sec.  27.4 of this 
chapter.
    (5) Applications for additional time to complete construction--(i) 
Delegation of authority. Authority is delegated to the Chief, Media 
Bureau to grant a single extension of time of up to six months to 
licensees of reassigned stations, UHF-to-VHF stations, and High-VHF-to-
Low-VHF stations to complete construction of their post-auction channel 
upon demonstration by the licensee that failure to meet the 
construction deadline is due to circumstances that are either 
unforeseeable or beyond the licensee's control. Licensees needing 
additional time beyond such a single extension of time to complete 
construction shall be subject to the tolling provisions in Sec.  
73.3598.
    (ii) Circumstances that may justify an extension of the 
construction deadline of a licensee of a reassigned station, a UHF-to-
VHF station, or a High-VHF-to-Low-VHF station include but are not 
limited to:
    (A) Weather-related delays, including a tower location in a 
weather-sensitive area;
    (B) Delays in construction due to the unavailability of equipment 
or a tower crew;
    (C) Tower lease disputes;
    (D) Unusual technical challenges, such as the need to construct a 
top-mounted or side-mounted antenna or the need to coordinate channel 
changes with another station; and
    (E) Delays faced by licensees that must obtain government 
approvals, such as land use or zoning approvals, or that are subject to 
competitive bidding requirements prior to purchasing equipment or 
services.
    (iii) A licensee of a reassigned station, UHF-to-VHF station, or 
High-VHF-to-Low-VHF station may rely on ``financial hardship'' as a 
criterion for seeking an extension of time if it is subject to an 
active bankruptcy or receivership proceeding, provided that the 
licensee makes an adequate showing that it has filed requests to 
proceed with construction in the relevant court proceedings. Any other 
licensee that seeks an extension of time based on financial hardship 
must demonstrate that, although it is not subject to an active 
bankruptcy or receivership proceeding, rare and exceptional financial 
circumstances warrant granting additional time to complete 
construction.
    (iv) Applications for additional time to complete construction must 
be filed electronically in CDBS using FCC Form 337 no less than 90 days 
before the expiration of the construction permit.
    (c) Consumer education for transitioning stations. (1) 
Transitioning stations that operate on a commercial basis will be 
required to air at least one Public Service Announcement (PSA) and run 
at least one crawl in every quarter of every day for 30 days prior to 
the date that the station terminates operations on its pre-auction 
channel. One of the required PSAs and one of the required crawls must 
be run during prime time hours (for purposes of this section, between 
8:00 p.m. and 11:00 p.m. in the Eastern and Pacific time zones, and 
between 7:00 p.m. and 10:00 p.m. in the Mountain and Central time 
zones) each day.
    (2) Transitioning stations that operate on a noncommercial 
educational (NCE) basis have the option to either:
    (i) Comply with the requirements of paragraph (c)(1) of this 
section; or
    (ii) Air 60 seconds per day of on-air consumer education PSAs, in 
variable timeslots, for 30 days prior to the station's termination of 
operations on its pre-auction channel.
    (3) Transition crawls. (i) Each crawl must run during programming 
for no less than 60 consecutive seconds across the bottom or top of the 
viewing area and be provided in the same language as a majority of the 
programming carried by the transitioning station.
    (ii) Each crawl must include the date that the station will 
terminate operations on its pre-auction channel; inform viewers of the 
need to rescan if the station has received a new post-auction channel 
assignment; and explain how viewers may obtain more information by 
telephone or online.
    (4) Transition PSAs. (i) Each PSA must have a duration of at least 
15 seconds.
    (ii) Each PSA must be provided in the same language as a majority 
of the programming carried by the transitioning station; include the 
date that the station will terminate operations on its pre-auction 
channel; inform viewers of the need to rescan if the station has 
received a new post-auction channel assignment; explain how viewers may 
obtain more information by telephone or online; and for stations with 
new post-auction channel assignments, provide instructions to both 
over-the-air and MVPD viewers regarding how to continue watching the 
television station; and be closed-captioned.
    (5) Licensees of transitioning stations, except for license 
relinquishment stations, must place a certification of compliance with 
the requirements in paragraph (c) of this section in their online 
public file within 30 days after beginning operations on their post-
auction channels. Licensees of license relinquishment stations must 
include the certification in their notification of discontinuation of 
service pursuant to Sec.  73.1750.
    (d) Notice to MVPDs. (1) Licensees of transitioning stations must 
provide notice to MVPDs that:
    (i) No longer will be required to carry the station because it will 
cease operations or because of the relocation of a channel sharee 
station;
    (ii) Currently carry and will continue to be obligated to carry a 
station that will have a new post-auction channel assignment; or
    (iii) Will become obligated to carry a station due to the 
relocation of a channel sharee station.
    (2) The notice to MVPDs must be provided in the form of a letter 
notification and must contain the following information:
    (i) Date and time of any channel changes;
    (ii) Pre-auction and post-auction channels;

[[Page 48542]]

    (iii) Modification (if any) to antenna position, location or power 
levels;
    (iv) Stream identification information for channel sharing 
stations; and
    (v) Engineering staff contact information.
    (3) Should any of the information in (d)(2) of this section change 
during the time that the station is transitioning from its pre-auction 
to its post-auction channel, an amended notification must be sent.
    (4) For cable systems, the notification letter must be addressed to 
the system's official address of record provided in the cable system's 
most recent filing in the Commission's Cable Operations and Licensing 
System (COALS) Form 322. For all other MVPDs, the notification letter 
must be addressed to the official corporate address registered with 
their State of incorporation.
    (5) Notification letters must be sent within the following time 
frames:
    (i) For license relinquishment stations, not less than 30 days 
prior to terminating operations;
    (ii) For channel sharee stations, not less than 30 days prior to 
terminating operations of the pre-auction channel;
    (iii) For channel sharee and channel sharer stations, not less than 
30 days prior to initiation of operations on the shared channel; and
    (iv) For reassigned stations, UHF-to-VHF stations, and High-VHF-to-
Low-VHF stations, not less than 90 days prior to the date on which they 
will begin operations on their post-auction channel.
    (v) If a station's anticipated transition date changes due to an 
unforeseen delay or change in transition plan, the licensee must send a 
further notice to affected MVPDs informing them of the new anticipated 
transition date.
    (e) Reimbursement rules--(1) Entities eligible for reimbursement. 
The Commission will reimburse relocation costs reasonably incurred only 
by:
    (i) The licensees of full power and Class A broadcast television 
stations that are reassigned under section 6403(b)(1)(B)(i) of the 
Spectrum Act, including channel sharer stations that are reassigned to 
a new channel in the Channel Reassignment Public Notice; and
    (ii) MVPDs in order to continue to carry the signal of a full power 
or Class A broadcast television station that is:
    (A) Described in paragraph (e)(1)(i) of this section;
    (B) A UHF-to-VHF station;
    (C) A High-VHF-to-Low-VHF station; or
    (D) A channel sharee station.
    (2) Estimated costs. (i) No later than three months following the 
release of the Channel Reassignment Public Notice, all broadcast 
television station licensees and MVPDs that are eligible to receive 
payment of relocation costs will be required to file an estimated cost 
form providing an estimate of their reasonably incurred relocation 
costs.
    (ii) Each broadcast television station licensee and MVPD that 
submits an estimated cost form will be required to certify, inter alia, 
that:
    (A) It believes in good faith that it will reasonably incur all of 
the estimated costs that it claims as eligible for reimbursement on the 
estimated cost form;
    (B) It will use all money received from the TV Broadcaster 
Relocation Fund only for expenses it believes in good faith are 
eligible for reimbursement;
    (C) It will comply with all policies and procedures relating to 
allocations, draw downs, payments, obligations, and expenditures of 
money from the TV Broadcaster Relocation Fund;
    (D) It will maintain detailed records, including receipts, of all 
costs eligible for reimbursement actually incurred; and
    (E) It will file all required documentation of its relocation 
expenses as instructed by the Media Bureau.
    (iii) If a broadcast television station licensee or MVPD seeks 
reimbursement for new equipment, it must provide a justification as to 
why it is reasonable under the circumstances to purchase new equipment 
rather than modify its corresponding current equipment in order to 
change channels or to continue to carry the signal of a broadcast 
television station that changes channels.
    (iv) Entities that submit their own cost estimates, as opposed to 
the predetermined cost estimates provided in the estimated cost form, 
must submit supporting evidence and certify that the estimate is made 
in good faith.
    (3) Final Allocation Deadline. (i) Upon completing construction or 
other reimbursable changes, or by a specific deadline prior to the end 
of the Reimbursement Period to be established by the Media Bureau, 
whichever is earlier, all broadcast television station licensees and 
MVPDs that received an initial allocation from the TV Broadcaster 
Relocation Fund must provide the Commission with information and 
documentation, including invoices and receipts, regarding their actual 
expenses incurred as of a date to be determined by the Media Bureau 
(the ``Final Allocation Deadline'').
    (ii) If a broadcast television station licensee or MVPD has not yet 
completed construction or other reimbursable changes by the Final 
Allocation Deadline, it must provide the Commission with information 
and documentation regarding any remaining eligible expenses that it 
expects to reasonably incur.
    (4) Final accounting. After completing all construction or 
reimbursable changes, broadcast television station licensees and MVPDs 
that have received money from the TV Broadcaster Relocation Fund will 
be required to submit final expense documentation containing a list of 
estimated expenses and actual expenses as of a date to be determined by 
the Media Bureau. Entities that have finished construction and have 
submitted all actual expense documentation by the Final Allocation 
Deadline will not be required to file at the final accounting stage.
    (5) Progress reports. Broadcast television station licensees and 
MVPDs that receive payment from the TV Broadcaster Relocation Fund are 
required to submit progress reports at a date and frequency to be 
determined by the Media Bureau.
    (6) Documentation requirements. (i) Each broadcast television 
station licensee and MVPD that receives payment from the TV Broadcaster 
Relocation Fund is required to retain all relevant documents pertaining 
to construction or other reimbursable changes for a period ending not 
less than 10 years after the date on which it receives final payment 
from the TV Broadcaster Relocation Fund.
    (ii) Each broadcast television station licensee and MVPD that 
receives payment from the TV Broadcaster Relocation Fund must make 
available all relevant documentation upon request from the Commission 
or its contractor.
    (7) Delegation of authority. The Commission delegates authority to 
the Chief, Media Bureau, to adopt the necessary policies and procedures 
relating to allocations, draw downs, payments, obligations, and 
expenditures of money from the TV Broadcaster Relocation Fund in order 
to protect against waste, fraud, and abuse and in the event of 
bankruptcy, to establish a catalog of expenses eligible for 
reimbursement and predetermined cost estimates, review the estimated 
cost forms, issue initial allocations for costs reasonably incurred 
pursuant to section 6403(b)(4) of the Spectrum Act, set filing 
deadlines and review information and documentation regarding progress 
reports, final allocations, and final accountings, and issue final 
allocations to reimburse for costs reasonably incurred pursuant to 
section 6403(b)(4) of the Spectrum Act.

[[Page 48543]]

    (f) Service rule waiver--(1) Waiver requests. (i) A broadcast 
television station licensee described in paragraph (e)(1)(i) of this 
section may file a request with the Chief, Media Bureau for a waiver of 
the Commission's service rules pursuant to section 6403(b)(4)(B) of the 
Spectrum Act during a 30-day window commencing upon the date that the 
Channel Reassignment Public Notice is released.
    (ii) A broadcast television station licensee may request that a 
waiver be granted on a temporary or permanent basis.
    (2) A licensee will have 10 days following a grant of the waiver to 
notify the Commission whether it accepts the terms of the waiver.
    (3) A licensee is required to meet all requirements for receiving 
payment of relocation costs under section 6403(b)(4) of the Spectrum 
Act established by the Commission, including the requirements of 
paragraph (e) of this section, until its waiver request is granted and 
the licensee accepts the terms of the waiver.
    (4) A licensee that is granted and accepts the terms of the waiver 
or a licensee with a pending waiver application must comply with all 
filing and notification requirements, construction schedules, and other 
post-auction transition deadlines set forth in paragraphs (b), (c), and 
(d) of this section.
    (g) Low Power TV and TV translator stations. (1) Licensees of 
operating low power TV and TV translator stations that are displaced by 
a broadcast television station or a wireless service provider or whose 
channel is reserved as a guard band as a result of the broadcast 
television spectrum incentive auction conducted under section 6403 of 
the Spectrum Act shall be permitted to submit an application for 
displacement relief in a restricted filing window to be announced by 
the Media Bureau by public notice. Except as otherwise indicated in 
this section, such applications will be subject to the rules governing 
displacement applications set forth in Sec. Sec.  73.3572(a)(4) and 
74.787(a)(4) of this chapter.
    (2) In addition to other interference protection requirements set 
forth in the rules, when requesting a new channel in a displacement 
application, licensees of operating low power TV and TV translator 
stations will be required to demonstrate that the station would not 
cause interference to the predicted service of broadcast television 
stations on:
    (i) Pre-auction channels;
    (ii) Channels assigned in the Channel Reassignment Public Notice; 
or
    (iii) Alternative channels or expanded facilities broadcast 
television station licensees have applied for pursuant to paragraph 
(b)(2) of this section.
    (3) Mutually exclusive displacement applications. Licensees of low 
power TV and TV translator stations that file mutually exclusive 
displacement applications will be permitted to resolve the mutual 
exclusivity through an engineering solution or settlement agreement. If 
no resolution of mutually exclusive displacement applications occurs, a 
selection priority will be granted to the licensee of a displaced 
digital replacement translator.
    (4) Notification and termination provisions for displaced low power 
TV and TV translator stations. (i) A wireless licensee assigned to 
frequencies in the 600 MHz band under part 27 of this chapter must 
notify low power TV and TV translator stations of its intent to 
commence wireless operations and the likelihood of receiving harmful 
interference from the low power TV or TV translator station to such 
operations within the wireless licensee's licensed geographic service 
area.
    (ii) The new wireless licensees must:
    (A) Notify the low power TV or TV translator station in the form of 
a letter, via certified mail, return receipt requested;
    (B) Indicate the date the new wireless licensee intends to commence 
operations in areas where there is a likelihood of receiving harmful 
interference from the low power TV or TV translator station; and
    (C) Send such notification not less than 120 days in advance of the 
commencement date.
    (iii) Low power TV and TV translator stations may continue 
operating on frequencies in the 600 MHz band assigned to wireless 
licensees under part 27 of this chapter until the wireless licensee 
commences operations as indicated in the notification sent pursuant to 
this paragraph.
    (iv) After receiving notification, the low power TV or TV 
translator licensee must cease operating or reduce power in order to 
eliminate the potential for harmful interference before the 
commencement date set forth in the notification.
    (v) Low power TV and TV translator stations that are operating on 
the UHF spectrum that is reserved for guard band channels as a result 
of the broadcast television incentive auction conducted under section 
6403 of the Spectrum Act may continue operating on such channels until 
the end of the post-auction transition period as defined in Sec.  27.4 
of this chapter, unless they receive notification from a new wireless 
licensee pursuant to the requirements of paragraph (g)(4) of this 
section that they are likely to cause harmful interference in areas 
where the wireless licensee intends to commence operations, in which 
case the requirements of paragraph (g)(4) of this section will apply.
    (h) Channel sharing operating rules. (1) Each broadcast television 
station licensee that is a party to a CSA shall continue to be licensed 
and operated separately, have its own call sign, and be separately 
subject to all of the Commission's obligations, rules, and policies 
applicable to the television service.
    (2) Channel sharing between full power television and Class A 
television stations. (i) A CSA may be executed between licensees of 
full power television stations, between licensees of Class A television 
stations, and between licensees of full power and Class A television 
stations.
    (ii) A Class A channel sharee station licensee that is a party to a 
CSA with a full power channel sharer station licensee must comply with 
the rules of part 73 governing power levels and interference, and must 
comply in all other respects with the rules and policies applicable to 
Class A television stations, as set forth in Sec. Sec.  73.6000 et seq.
    (iii) A full power channel sharee station licensee that is a party 
to a CSA with a Class A channel sharer station licensee must comply 
with the rules of part 74 of this chapter governing power levels and 
interference.
    (iv) A Class A channel sharee station may qualify only for the 
cable carriage rights afforded to ``qualified low power television 
stations'' in Sec.  76.56(b)(3) of this chapter.
    (3) Channel sharing between commercial and noncommercial 
educational television stations. (i) A CSA may be executed between 
commercial and NCE broadcast television station licensees.
    (ii) The licensee of an NCE station operating on a reserved channel 
under Sec.  73.621 that becomes a party to a CSA, either as a channel 
sharee station or as a channel sharer station, will retain its NCE 
status and must continue to comply with Sec.  73.621.
    (iii) If the licensee of an NCE station operating on a reserved 
channel under Sec.  73.621 becomes a party to a CSA, either as a 
channel sharee station or as a channel sharer station, the portion of 
the shared television channel on which the NCE station operates shall 
be reserved for NCE-only use.
    (iv) The licensee of an NCE station operating on a reserved channel 
under

[[Page 48544]]

Sec.  73.621 that becomes a party to a CSA may assign or transfer its 
shared license only to an entity qualified under Sec.  73.621 as an NCE 
television licensee.
    (v) If the licensee of an NCE station operating on a reserved 
channel under Sec.  73.621 becomes a party to a CSA and its license is 
relinquished or terminated, only another entity meeting the eligibility 
criteria of Sec.  73.621 will be considered for reassignment of the 
shared license.
    (4) Required CSA provisions. (i) CSAs must contain provisions 
outlining each licensee's rights and responsibilities regarding:
    (A) Access to facilities, including whether each licensee will have 
unrestrained access to the shared transmission facilities;
    (B) Allocation of bandwidth within the shared channel;
    (C) Operation, maintenance, repair, and modification of facilities, 
including a list of all relevant equipment, a description of each 
party's financial obligations, and any relevant notice provisions; and
    (D) Termination or transfer/assignment of rights to the shared 
licenses, including the ability of a new licensee to assume the 
existing CSA.
    (ii) CSAs must include provisions:
    (A) Affirming compliance with the channel sharing requirements in 
paragraph (h)(4) of this section, the Incentive Auction Report and 
Order, Docket No. 12-268 (FCC 14-50), and the Channel Sharing Report 
and Order, 27 FCC Rcd 4616 (2012); and
    (B) Requiring that each channel sharing licensee shall retain 
spectrum usage rights adequate to ensure a sufficient amount of the 
shared channel capacity to allow it to provide at least one Standard 
Definition (SD) program stream at all times.
    (5) If a channel sharee or channel sharer station's license is 
terminated, the licensees of the remaining channel sharing station or 
stations will continue to have rights to their portion(s) of the shared 
channel. The rights to the terminated portion of the shared channel 
will revert to the Commission for reassignment. The final award of the 
rights to the terminated portion of the shared channel will be 
conditioned on a new channel sharing licensee agreeing to the terms of 
the existing CSA. If the new channel sharing licensee and the licensees 
of the remaining channel sharing station or stations agree to 
renegotiate the terms of the existing CSA, the agreement may be 
amended, subject to Commission approval. If the negotiations to amend 
the agreement are unsuccessful, the remaining station or stations will 
be permitted to continue to operate while the channel remains a shared 
allocation and subject to reassignment.
    (6) If the rights under a CSA are transferred or assigned, the 
assignee or the transferee must comply with the terms of the CSA. If 
the transferee or assignee and the licensees of the remaining channel 
sharing station or stations agree to amend the terms of the existing 
CSA, the agreement may be amended, subject to Commission approval.
    (7) Preservation of carriage rights. A channel sharee station that 
possessed carriage rights under section 338, 614, or 615 of the 
Communications Act of 1934 (47 U.S.C. 338; 534; 535) on November 30, 
2010, shall have, at its shared location, the carriage rights under 
such section that would apply to such station at the shared location if 
it were not sharing a channel.

0
38. Section 73.6012 is revised to read as follows:


Sec.  73.6012  Protection of Class A TV, low power TV and TV translator 
stations.

    An application to change the facilities of an existing Class A TV 
station will not be accepted if it fails to protect other authorized 
Class A TV, low power TV and TV translator stations and applications 
for changes in such stations filed prior to the date the Class A 
application is filed, pursuant to the requirements specified in Sec.  
74.707 of this chapter. The protection of other authorized low power TV 
and TV translator stations and applications for changes in such 
stations shall not apply in connection with any application filed by a 
Class A TV station pursuant to Sec.  73.3700(b)(1).

0
39. Section 73.6019 is revised to read as follows:


Sec.  73.6019  Digital Class A TV station protection of low power TV, 
TV translator, digital low power TV and digital TV translator stations.

    An application for digital operation of an existing Class A TV 
station or to change the facilities of a digital Class A TV station 
will not be accepted if it fails to protect authorized low power TV, TV 
translator, digital low power TV and digital TV translator stations in 
accordance with the requirements of Sec.  74.793(b) through (d) and (h) 
of this chapter. This protection must be afforded to applications for 
changes filed prior to the date the digital Class A station is filed. 
The protection of other authorized low power TV, TV translator, digital 
low power TV and digital TV translator stations shall not apply in 
connection with any application filed by a Class A TV station pursuant 
to Sec.  73.3700(b)(1).

PART 74--EXPERIMENTAL RADIO, AUXILIARY, SPECIAL BROADCAST AND OTHER 
PROGRAM DISTRIBUTIONAL SERVICES

0
40. The authority citation for part 74 continues to read as follows:

    Authority:  47 U.S.C. 154, 303, 307, 309, 336 and 554.


0
41. Section 74.602 is amended by adding paragraph (h)(5) and (6) to 
read as follows:


Sec.  74.602  Frequency assignment.

* * * * *
    (h) * * *
    (5) (i) The licensee of a TV STL, TV relay station, or TV 
translator relay station that operates on frequencies in the 600 MHz 
band assigned to wireless licensees under part 27 of this chapter must 
cease operations on those frequencies no later than the end of the 
post-auction transition period as defined in Sec.  27.4 of this 
chapter. The licensee of a TV STL, TV relay station, or TV translator 
relay station may be required to cease operations on a date earlier 
than the end of the post-auction transition period if it receives a 
notification pursuant to paragraph (h)(5)(ii) of this section.
    (ii) A wireless licensee assigned to frequencies in the 600 MHz 
band under part 27 of this chapter must notify the licensee of a TV 
STL, TV relay station, or TV translator relay station of its intent to 
commence wireless operations and the likelihood of harmful interference 
from the TV STL, TV relay station, or TV translator relay station to 
those operations within the wireless licensee's licensed geographic 
service area.
    (A) The wireless licensee must:
    (1) Notify the licensee of the TV STL, TV relay station, or TV 
translator relay station in the form of a letter, via certified mail, 
return receipt requested; and
    (2) Send such notification not less than 30 days in advance of the 
approximate date of commencement of such operations.
    (B) The licensee of the TV STL, TV relay station, or TV translator 
relay station must cease the subject operation within 30 days of 
receiving the notification pursuant to this section.
    (iii) By the end of the post-auction transition period, all TV STL, 
TV relay station and TV translator relay station licensees must modify 
or cancel their authorizations and vacate the 600 MHz band. 
Applications for TV STL, TV relay and TV translator relay stations in 
the 600 MHz band will not be accepted for filing on or after the end 
date for the post-auction transition period.

[[Page 48545]]

    (6) The licensee of a TV STL, TV relay station, or TV translator 
relay station that operates on the UHF spectrum that is reserved for 
guard band channels as a result of the broadcast television incentive 
auction conducted under section 6403 of the Middle Class Tax Relief and 
Job Creation Act of 2012 (Pub. L. 112-96) must cease operations on 
those frequencies no later than the end of the post-auction transition 
period as defined in Sec.  27.4 of this chapter. The licensee of a TV 
STL, TV relay station, or TV translator relay station may be required 
to cease operations on a date earlier than the end of the post-auction 
transition period if it receives a notification pursuant to paragraph 
(h)(5)(ii) of this section.

0
42. Section 74.802 is amended by revising paragraph (b) and adding 
paragraph (f) to read as follows:


Sec.  74.802  Frequency assignment.

* * * * *
    (b)(1) Operations in the bands allocated for TV broadcasting are 
limited to locations at least 4 kilometers outside the protected 
contours of co-channel TV stations shown in the following table. These 
contours are calculated using the methodology in Sec.  73.684 of this 
chapter and the R-6602 curves contained in Sec.  73.699 of this 
chapter.

----------------------------------------------------------------------------------------------------------------
                                                                        Protected contour
                                               -----------------------------------------------------------------
                Type of station                                                                     Propagation
                                                             Channel               Contour (dBu)       curve
----------------------------------------------------------------------------------------------------------------
Analog: Class A TV, LPTV,.....................  Low VHF (2-6)...................              47        F(50,50)
translator and booster........................
                                                High VHF (7-13).................              56        F(50,50)
                                                UHF (14-51).....................              64        F(50,50)
Digital: Full service TV, Class A TV, LPTV,     Low VHF (2-6)...................              28        F(50,90)
 translator and booster.
                                                High VHF (7-13).................              36        F(50,90)
                                                UHF (14-51).....................              41        F(50,90)
----------------------------------------------------------------------------------------------------------------

    (2) Low power auxiliary stations may operate closer to co-channel 
TV broadcast stations than the distances specified in paragraph (b)(1) 
of this section provided that their operations are coordinated with TV 
broadcast stations that could be affected by the low power auxiliary 
station operation. Coordination must be completed prior to operation of 
the low power auxiliary station.
* * * * *
    (f) Operations in 600 MHz band assigned to wireless licensees under 
part 27 of this chapter. A low power auxiliary station that operates on 
frequencies in the 600 MHz band assigned to wireless licensees under 
part 27 of this chapter must cease operations on those frequencies no 
later than the end of the post-auction transition period as defined in 
Sec.  27.4 of this chapter. During the post-auction transition period, 
low power auxiliary stations will operate on a secondary basis to 
licensees of part 27 of this chapter, i.e., they must not cause to and 
must accept harmful interference from these licensees.

0
43. Section 74.870 is amended by revising paragraph (i) to read as 
follows:


Sec.  74.870  Wireless video assist devices.

* * * * *
    (i) Operations in 600 MHz band assigned to wireless licensees under 
part 27 of this chapter. A wireless video assist device that operates 
on frequencies in the 600 MHz band assigned to wireless licensees under 
part 27of this chapter must cease operations on those frequencies no 
later than the end of the post-auction transition period as defined in 
Sec.  27.4 of this chapter. During the post-auction transition period, 
wireless video assist devices will operate on a secondary basis to 
licensees of part 27 of this chapter, i.e., they must not cause to and 
must accept harmful interference from these licensees.

[FR Doc. 2014-18423 Filed 8-14-14; 8:45 am]
BILLING CODE 6712-01-P