OFFICE OF
THE CHAIRMAN
FEDERAL COMMUNICATIONS COMMISSION
WASHINGTON
March 15,2011
The Honorable John D. Dingell
U.S. House ofRepresentatives
2328 Rayburn House Office Building
Washington, D.C. 20515
Dear Congressman Dingell:
As a follow up to our exchange at the Subcommittee's hearing on February 16,2011, I'd
like to take the opportunity to provide you with additional information regarding the
Commission's proposed approach to incentive auctions.
First, an incentive auction is a market-based mechanism that enables participants to
determine the amount ofspectrum that can be cleared. In the case oftelevision spectrum, our
proposed plan is that broadcasters could voluntarily decide to contribute some - or all - oftheir
spectrum and could set a minimwn price for the sale of such contributions. The market will
determine - through offers ofwilling broadcasters to sell and offers of commercial wireless
providers to buy - the amount ofspectrum that can be cleared. Our plan does not propose that
the FCC will forcibly reclaim broadcasters' spectrum to meet an artificial target. Our proposal
for voluntary broadcaster participation would also allow a broadcaster to choose to stay on the
air and share a channel with one or more other broadcasters in its market, so that all stations can
keep their entire programming lineups and enjoy strengthened financial positions from the
infusion ofauction proceeds.
For a voluntary incentive auction to free up spectrwn for mobile broadband, we will need
to offer for bid contiguous blocks ofspectrum that are available across all regions ofthe Nation.
Allowing television stations to remain on frequencies interspersed throughout the auctioned
spectrum would not only cause interference to both television viewers and mobile broadband
conswners, but also make the resulting non-contiguous spectrwn less suitable for wireless
services, thereby greatly reducing the value ofthe recovered spectrum. Therefore, to ensure the
spectrum broadcasters voluntarily contribute to an incentive auction can meet the needs of
mobile broadband consumers, we will need to assign new frequencies to some broadcast stations
through a realignment process sometimes called repacking.
We fully intend to develop a realignment plan that entails the minimum nwnber of
frequency changes possible. Our proposal includes reimbursing broadcasters for any costs
incurred in relocating and minimizing any loss ofover-the-air TV viewers. We want to limit any
inconvenience to broadcasters and maintain a strong over-the-air television broadcast service.
It is also important to keep in mind that the realignment that will occur after an incentive
auction will be different from and less complicated than the one that happened during the DTV
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transition. The majority ofstations would not experience any changes at all, and stations that do
need to change to a different channel could do so within their same VHF or UHF band and
maintain their existing service area unless they voluntarily choose to modify it. Consumers
would not need to obtain converter boxes; they would simply need to rescan their TV receivers
or converter boxes for the new channels. In addition, digital technology allows stations to use
virtual channel numbers, so even ifa station's actual channel number changes through
realignment, it can continue to have its former channel number display on television screens and
set-top boxes.
Demand for wireless broadband is growing rapidly, and I believe incentive auctions are
one ofthe most effective means to meet growing consumer demand and spur U.S. global
competitiveness. I look forward to working with you on this proposal to ensure that it is a win
for broadcasters, a win for consumers, and a win for the innovation, job creation and economic
growth that will result from additional mobile broadband services.
Please let me know ifI can be offurther assistance.