Incentive auctions: only in the US?
Jan 29, 2014 by PolicyTracker

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TagsBlog, Broadcasting, Digital dividend, Mobile

The US makes a big announcement on incentive auctions tomorrow (Thursday) but will this innovative new format catch on elsewhere? This seems doubtful.

With only a few 800 MHz digital dividend auctions still pending in Europe, the big news in this field is in the US. The H bock auction is continuing and tomorrow (Thursday) the Incentive Auction Task Force is making an eagerly awaited presentation at the FCC’s Open Commission meeting. National and international interest is huge: will the latest announcement reveal the final format?

However, I can’t help wondering whether incentive auctions will remain a US phenomenon. 

Regulatory insiders say the ownership of the country’s broadcast spectrum is a legal grey area. Were broadcasters given it in perpetuity or does the state own it, meaning the FCC could legally take it back? 

In such an uncertain atmosphere, the FCC wants to avoid a case which it might lose. An incentive auction is attractive because broadcasters are voluntarily relinquishing spectrum, so they could have no recourse to the courts.

In most other countries, TV spectrum does belong to the state; so why hold an auction to take it back? Some broadcasters may not take part, leaving gaps or the problem of repacking. Far easier to recover the spectrum, assign new bands, then negotiate compensation in the time-honoured fashion.

You have to salute the ingenuity of the incentive auction, but outside the US, isn’t it a solution in search of a problem?