October 24, 2014 / 4:41 PM / 5 years ago

U.S. delays 'incentive' airwaves auction to early 2016

WASHINGTON (Reuters) - The U.S. Federal Communications Commission expects a major auction of low-frequency airwaves to be pushed back to early 2016 from mid-2015 because of its complexity and a pending court challenge, an FCC official said in a blog post on Friday.

The FCC is working on rules for the so-called incentive auction, in which wireless carriers would get the first opportunity since 2008 to purchase airwaves that are considered the “beach-front property” of radio spectrum for their reach and strength.

The auction is regarded as the FCC’s most complex undertaking to date, balancing numerous economic, engineering and political considerations, including the need to woo broadcasters to give up the airwaves in the first place.

The delay gives the FCC more time to sway TV station owners to participate and T-Mobile US Inc to argue for bidding restrictions on larger rivals AT&T Inc and Verizon Communications Inc.

The National Association of Broadcasters, concerned about the potential impact on TV stations, has petitioned the U.S. Court of Appeals for the District of Columbia Circuit to review elements of the FCC’s planned auction process.

The court has pushed back the deadline on final briefs in the case until late January 2015.

“We are confident we will prevail in court, but given the reality of that schedule, the complexity of designing and implementing the auction, and the need for all auction participants to have certainty well in advance of the auction, we now anticipate accepting applications for the auction in the fall of 2015 and starting the auction in early 2016,” Gary Epstein, who chairs the FCC’s Incentive Auction Task Force, wrote in the blog post.

The NAB rejected the notion that its lawsuit was the cause of the delay.

“We look forward to a speedy resolution of our legal challenge and a successful auction that preserves access to free and local TV for every American,” NAB spokesman Dennis Wharton said in a statement.

The FCC plans a road show this fall to convince TV station owners to participate in the auction, for example by going off the air or sharing frequencies with another station.

Wireless carriers said the auction delay was unfortunate, but they added that they welcomed the effort to get it right.

Although all large carriers are expected to participate, AT&T so far has been the only one to pledge a specific amount, at least $9 billion.

BTIG analyst Walter Piecyk, in a note, said the delay could “re-open the door for T-Mobile and Sprint to argue for more favorable bidding conditions, particularly given that they have abandoned their merger discussions.”

Verizon, AT&T, T-Mobile and satellite provider Dish Network Corp also plan to bid in the FCC’s AWS-3 auction, which is scheduled for Nov. 3.

The anticipated start of the incentive auction was pushed back once before, to mid-2015 from 2014, because of its complexity.

Reporting by Alina Selyukh; Editing by Chizu Nomiyama, Andre Grenon and Paul Simao

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