Impairment Notice Raises Key Issues for Incentive Auction, Commenters Say

T-Mobile said getting the initial clearing target right is key to a successful incentive auction. T-Mobile is widely viewed as a likely major bidder in the auction, though the possibility it would be in the middle of a merger with Dish Network while the auction is in progress is a new wild card (see 1506040051). “If the Commission chooses an initial spectrum-clearing target that is too low, the 600 MHz auction will deliver less spectrum for wireless broadband services than the market demands, and many broadcasters that might have preferred to move their spectrum to higher-valued uses in exchange for cash payments may prove unable to do so,” T-Mobile said. A target that's too high would be less damaging, but still could cause problems, the carrier said.

The FCC’s proposed approach on Canada and Mexico is reasonable, T-Mobile said. “The Public Notice explains that the simulations presented are ‘illustrative,’ not definitive,” the carrier said. For Canada, the simulations assume the FCC won't need to protect vacant Canadian TV station allotments because Industry Canada has proposed “just such an outcome” in its ongoing "Consultation on Repurposing the 600 MHz Band," T-Mobile said. “Should Canada act on its stated intention, the resulting harmonized spectrum will obviate the need for the Commission to protect any Canadian television allotments whether occupied or vacant because the Canadian broadcast band will no longer conflict with the post-auction 600 MHz band in the United States.” Mexico is trickier, T-Mobile acknowledged. Since the Instituto Federal de Telecomunicaciones, that country’s regulator, has yet to take steps “the simulations take the conservative view that the Commission will need to protect all Mexican television allotments from interference by broadband operations in the United States even if those allotments are currently vacant,” the carrier said. This presents a limitation for the simulations, “but a reasonable one,” T-Mobile said.

The PN raises more questions than it answers, NAB said. Commenters “are entitled to more transparency into the Commission’s plans for the auction,” ATBA said. Both groups pointed to the lack of modeling involving the Mexican border as a particular problem with the FCC's release. “Scenarios modeling nominal impairment budgets that do not account for interference from Mexican stations are simply misleading,” ATBA said. Since AT&T has been able to account for interference from Mexico in its modeling, the FCC should be able to as well, NAB said. “Plainly, it is possible at least to estimate Mexican impairments at this time,” NAB said.

The FCC should “reject a needlessly complex approach to calculating impairments,” NAB said. The agency should adopt NAB's proposal with AT&T, which treats border regions differently from the rest of the country, NAB said. The FCC “should not use foreign impairments as a means of masking new impairments created by reassigning domestic television stations to channels in the wireless band,” NAB said.

The simulation information provided by the FCC is “an excellent first step in allowing interested stakeholders the opportunity to better understand the amount of impairments that may be expected on 600 MHz licenses,” CTIA said in its comments. CTIA said the FCC should “continue to investigate” various alternatives to the “20 percent impairment” proposal the FCC offered in its “Auction 1000 Public Notice.” “CTIA and its members are also working to examine this issue, and CTIA is not endorsing a particular alternative standard at this time,” the wireless association said. The FCC needs to move quickly to develop an improved view of impairments tied to Mexico, the group said. “It is critically important that the Mexican television impairment data be confirmed and updated expeditiously. Potential auction participants need this information well in advance of the incentive auction to understand the impairments expected from Mexican television broadcast stations.” CTIA urged the FCC to release all the raw data behind the simulation, rather than just a “snapshot.” Release of the data would allow interested parties “the opportunity to fully analyze all the decisions and outcomes associated with impairments,” CTIA said.

More work remains to get the simulation model right, Sprint said. The FCC “should move forward with a wider range of simulations that include adjustments to various procedures and parameters, including clearing targets, impairment placements, broadcaster participation levels, and bidding category definitions,” Sprint said.