Incentive Auction Marches On – Online Tutorial on Broadcaster Reverse Auction Process, and Notice on Who Can Receive Auction Payments

With the January 12 deadline for the Form 177 incentive auction filings by broadcasters coming ever closer, there is more information from the FCC providing guidance to broadcasters on their participation in the process. The folks at the FCC running the auction posted an article on the FCC blog yesterday, promising an online tutorial available to walk broadcasters through the auction process. This is in addition to the webinar the FCC will be conducting next Tuesday to discuss the initial FCC filing by which TV broadcasters indicate their initial interest in auction participation – see our post here.

In addition, the FCC issued a public notice last week acknowledging that broadcasters can designate who will receive their payments for relinquishing their spectrum after the auction – acknowledging that payments need not be made directly to the station licensee. While only one payee can be designated, this ability to direct payments to someone other than the licensee may facilitate the use of a “qualified intermediary” which may have tax implications for some stations interested in participating in the auction. It may also facilitate some Channel Sharing Agreements, by allowing payments to be made to escrow agents who can disburse the funds as directed by the agreement. The FCC urges, as do we, that interested stations consult their tax advisors on how these payments should be structured to make sure that they get accurate advice on how to maximize tax benefits from the auction.