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Eric DeSilva Featured in Law360’s Preview of FCC’s Incentive Auction Process 

Law360
February 3, 2016

Eric W. DeSilva, a partner in Wiley Rein’s Telecom, Media & Technology Practice, was quoted extensively in yesterday’s Law360 feature story on the Federal Communications Commission’s (FCC) first-of-its-kind incentive auction. The process involves TV broadcasters’ voluntary relinquishment their spectrum licenses in exchange for payments that will be generated from the FCC’s auction of those licenses to wireless broadband companies, the article stated. The wireless companies are increasingly in need of additional low-band spectrum, which can travel long distances and penetrate buildings. On March 29, broadcasters will make their initial bid commitments and alert the FCC if they are willing to go off the air completely, channel share, or move to a different frequency.

“Basically, they’ve got the structure of the auction,” said Mr. DeSilva. “The big decisions have been made. Right now, I think it’s all about implementation and execution. This is an incredibly complex thing the FCC is doing.”

Law360 noted that three to four weeks after the March 29 deadline, the FCC will have used the information gathered from the broadcasters’ initial bid commitments to determine the initial spectrum clearing target, which is the amount of spectrum the agency will aim to clear in the reverse auction. “When they announce it, that's going to be an indication of if they’ve got big broadcast participation,” said Mr. DeSilva. “If they set a clearing target of 126 megahertz, that means a lot of broadcasters have been pulled in. If the FCC comes out and the clearing target is much lower, that’s an indication that maybe the FCC didn’t pull in as many broadcasters as it wanted.”

Setting the clearing target will also enable the bidders in the forward auction to determine how much they want to make in upfront payments, according to the publication. The total amount of payments that come in will give the FCC a sense of the appetite for spectrum in the forward auction, Mr. DeSilva added.

“If those amounts of money come in and [the total is] not a significant multiple of the number of licenses they have available at the clearing target, they can say it’s not necessarily going to be a competitive auction,” concluded Mr. DeSilva. “If it’s a high multiple, it’s an indication there is a high demand and the auction will become very competitive.”

To read the full article, please click here.