Absence of DRP Could Lead to More Money for Some Stations, Symons Says

Leaving dynamic reserve pricing out of the incentive auction is likely to lead to the FCC paying higher prices to some stations, Incentive Auction Task Force Vice Chairman Howard Symons said at a Hudson Institute event Monday. DRP, which would have allowed the FCC to freeze the prices of some stations or repack them in the wireless band, was included in earlier auction plans to allow the commission to offer higher opening bid prices. A draft order on circulation and also on the agenda for the July 16 commissioner meeting would do away with DRP (see 1506170052).

The draft version of the auction procedures public notice does away with DRP at the request of Chairman Tom Wheeler, Symons noted. Asked if DRP has been replaced by some other mechanism to lower auction prices, Symons said that the FCC could “run a successful auction without it.”

The benefits of not using DRP may outweigh the risks of including it, Symons said. The wide opposition to DRP and its creation of more impairment in the wireless band led to Wheeler's deciding that it shouldn’t be included in the draft procedures item, Symons said. “DRP was a crude device to lower prices paid to broadcasters and we are very glad that it’s gone,” said Expanding Opportunities for Broadcasters Coalition Director Preston Padden in an interview.

If the FCC approves the three auction items set for its July open meeting -- the procedures PN, the reserved spectrum holdings order and the competitive bidding rules -- the commission will be on track to hold the auction in Q1, Symons said. The three auction-related proceedings outstanding -- the low-power TV NPRM, the interservice interference rules and the Part 15 rules on unlicensed interference -- are expected to be resolved “by the fall,” Symons said.

Symons recently completed a tour of 30 broadcast markets as part of FCC outreach efforts to encourage broadcaster participation. Commission officials met with “close to two-thirds of all auction-eligible broadcasters,” as part of the road show effort, Symons said.

The FCC is “well-along” in completing the coding of its auction software that will administer the forward and reverse auctions, Symons said. He also said negotiations over cross-border interference with Mexico and Canada are “on track.”