Preparing FCC Incentive Auction Participants

Preparing FCC Incentive Auction Participants

Brad Miller, Margarita Patria, Denys Zalizetsky, Kwijoo Lee
Auctions & Competitive Bidding

CRA has developed auction simulation software tools that can be used by TV broadcasters participating in the Federal Communications Commission’s incentive auctions scheduled to start in Q1 2016.  In the incentive reverse auction, TV broadcasters will be bidding to be paid to free up their TV channel bandwidth, by voluntarily moving to another TV channel band, by channel-sharing with another broadcaster, or by exiting their channel completely.  If they choose not to participate in the auction, or choose to drop out of the auction, they will be “re-packed” by being moved to another channel.  The freed-up spectrum then will be re-purposed in the FCC’s incentive forward auction in which wireless providers will bid to purchase the spectrum.  The re-assignment of the channel bandwidths will result in better, more economically efficient use of the spectrum. The FCC has estimated that individual stations may receive compensation nearing $600 million for selling their spectrum in the reverse auction.

One of CRA’s tools is the Blocking Set Generator which can be used to assess the relative importance of each TV station.  A second CRA tool is the Auction Simulation Tool that simulates the FCC’s incentive reverse auction round by round.  It establishes winning bidders (and the round they are “frozen”) and non-winning bidders (and the round they dropped out of the auction).  These tools have been used to assist a TV broadcaster group preparing for and planning to participate in the FCC’s incentive reverse auction.  CRA also has a Bid Tracking Tool for real-time bidding strategy support as well as other tools that would be helpful for both incentive reverse auction and incentive forward auction participants.  The CRA team on this project includes Brad Miller, Margarita Patria, Sam Dailey, Denys Zalizetsky, and Kwijoo Lee.  CRA’s Auctions & Competitive Bidding Practice offers a full menu of bidder support services.