The U.S. Court of Appeals for the D.C. Circuit on Friday rejected a lawsuit from broadcasters that challenged some of the procedures of the Federal Communications Commission’s (FCC) upcoming airwaves auction.
The decision removes one roadblock that will allow the agency to move ahead early next year with the auction, which is meant to free up more spectrum to help satisfy the increasing demand from mobile phones. Initially scheduled for mid-2015, the auction was delayed because of the court challenge.
A three-judge panel on the court rejected arguments from the National Association of Broadcasters (NAB) that some of the FCC’s decisions on the auction are arbitrary and capricious and conflict with the Spectrum Act, which was passed in 2012 to set up the first-of-its-kind auction.
“This decision provides the commission and all stakeholders with the certainty necessary to proceed apace toward a successful auction in the first quarter of next year,” FCC Chairman Tom Wheeler said.
The auction pushes broadcasters, who own a large share of the country’s spectrum, to sell it off to wireless providers like Verizon and AT&T. About three-quarters of people in the United States own smartphones, and demand for spectrum has grown rapidly in the past decade.
The auction would take place in multiple parts. The FCC would hold a “reverse auction” with broadcasters to see what price they would demand for their spectrum rights. The agency would then hold an auction with wireless companies to purchase those rights.
Broadcasters who do not want to sell would be moved to a smaller band of spectrum to continue operating. This “repackaging” process paid for by the wireless auction would still allow mobile companies to take a valuable portion of that spectrum.
The broadcast industry has taken particular issue with the repackaging plan, which it says can significantly harm television broadcasters.
The industry has questioned the FCC’s methods for determining the area and number of customers served by each license. The law requires the FCC to make all reasonable efforts to preserve broadcasters’ previous coverage area when they are repackaged to new channels.
“We're disappointed with today's ruling, which we believe fails to hold the FCC to the letter of the law passed by Congress,” said NAB Executive Vice President Dennis Wharton. “Nonetheless, we remain committed to working with policymakers to ensure a successful auction that protects the interests of broadcasters, whether they participate or not, and does not disenfranchise our tens of millions of viewers.”
The wireless industry applauded Friday’s decision as a win for wireless consumers, noting that the court upheld the entire FCC order dealing with the incentive auction.
“We are thankful that the court addressed these issues quickly and look forward to a successful and timely incentive auction that delivers access to more spectrum as soon as possible to be able to meet ever increasing mobile broadband demand,” said Meredith Attwell Baker, the president of CTIA-The Wireless Association.