FCC_-_Statement_of_Work_-_Incentive_Auction_-_Outreach_Program.pdf

FEDERAL COMMUNICATIONS COMMISSION

STATEMENT OF WORK

Broadcaster Auction Education and Outreach Support Services

Broadcast Incentive Auction

1.0 BACKGROUND

1.1 The 2010 National Broadband Plan proposed a Broadcast Incentive

Auction (“Incentive Auction”) as a voluntary, market-based means of repurposing broadcast spectrum by encouraging existing broadcast television licensees to voluntarily relinquish their spectrum usage rights in exchange for a share of the proceeds from an auction of new licenses to use the repurposed spectrum to provide mobile broadband services.

1.2 Congress, in passing the Middle Class Tax Relief and Job Creation Act of

2012 (“Spectrum Act”) in early 2012, authorized the FCC to conduct incentive auctions.1 In October 2012, the FCC launched a proceeding to hold the world’s first incentive auction of broadcast spectrum, implementing the Spectrum Act and acting on the vision first outlined in the Commission’s National Broadband Plan. In May 2014, the Commission adopted rules to implement the Incentive Auction. These rules provide the essential framework for the Incentive Auction.

1.3 The Incentive Auction will be a groundbreaking event for the broadcast television, mobile wireless, and technology sectors of the U.S. economy.

This innovative and unprecedented process brings market forces to bear on many of the most important decisions about spectrum reallocation (e.g., how much spectrum, and in what markets should spectrum, be reallocated). The Incentive Auction proceeding is an important component of the Commission’s ongoing efforts to make additional licensed and unlicensed spectrum available for broadband. The spectrum reclaimed through the auction will promote economic growth; enhance America’s global competitiveness; increase the speed, capacity and ubiquity of mobile broadband service; and accelerate the smartphone and tablet-led mobile revolution, benefitting consumers and businesses throughout the country.

1.4 The Incentive Auction will consist of a “reverse auction” and a “forward auction.” Television licensees who voluntarily relinquish spectrum usage rights in the “reverse auction” will receive a share of the proceeds from the sale of repurposed spectrum to wireless users in the “forward auction.”

For purposes of making available spectrum to carry out the forward auction, the Spectrum Act authorizes the Commission to reorganize (“repack”) the television stations that elect to remain on the air.2

1 Middle Class Tax Relief and Job Creation Act of 2012, Pub. L. No. 112-96, §§ 6402, 6403, 125 Stat. 156 (2012) (“Spectrum Act”).

2 Id. § 6403(b)(1).

1.5 The Incentive Auction will present a significant financial opportunity for broadcasters who wish to relinquish spectrum rights. It is worth emphasizing, however, that broadcaster participation in the auction is wholly voluntary. Broadcasters that choose not to participate will continue providing the public with free over-the-air television service.

1.6 Should a broadcaster decide to participate in the Incentive Auction it will have the following options to choose among: (1) relinquish its spectrum rights and going off the air; (2) channel-share with another broadcaster; or

(3) move to a lower spectrum band. To maintain the confidentiality of bidders and bidding, the identity of broadcasters that express interest in and participate in the Incentive Auction must be kept confidential until the auction closes and, with respect to participants whose bids are not selected, for an additional two years. Therefore, the Contractor must be sensitive to the need for privacy in providing education and outreach opportunities and events.

1.7 Extensive broadcaster education and outreach is an important component to making the Incentive Auction a success. It is likely that the scope of the Incentive Auction will be in the tens of billions of dollars, considering payments to broadcasters in the reverse auction and proceeds from the forward auction. The FCC therefore needs the expertise of a firm experienced with performing education and outreach regarding complex investments in this range to ensure that broadcasters get the information they need in a form that will enable them to make knowledgeable decisions regarding participation in the Incentive Auction.

2.0 SCOPE

2.1 The FCC will select a contractor to assist the Commission with outreach to broadcast station owners to educate them about the Incentive Auction and the auction process, which will enable broadcasters to decide whether to participate and to understand their options should they choose to participate. The Incentive Auction offers broadcast station owners unique financial opportunities to monetize the value of their spectrum usage rights. To assess these opportunities, the contractor shall provide broadcasters with information needed to understand: the background and operation of the Incentive Auction, which is a complex and novel undertaking; the options available to broadcasters under the Incentive Auction, including channel sharing; and the valuation that could be attributed to the spectrum currently held by broadcasters if that spectrum is reallocated for mobile broadband use. This complex information shall be presented clearly and comprehensively.

2.2 This Statement of Work (“SOW”) supports outreach and education for potential broadcast participants, including the creation and implementation of an Outreach Plan; reviewing and updating outreach materials; and advisory services related to outreach and education. The Outreach Plan shall be designed to inform and educate broadcast station owners and investors about the opportunities provided by the Incentive Auction, including: how the Incentive Auction will work; options for broadcaster participation in the reverse auction; and the presentation of financial information related to the estimated value of the spectrum usage rights that broadcasters would tender in the auction. The Outreach Plan shall include group presentations as well as presentations to individual broadcasters and their investors. Outreach efforts shall include in-person presentations as well as webinars and conference calls. It is anticipated that some presentations shall be made by FCC personnel; some by the contractor;

and some by a combination of FCC and contractor personnel, with more detail on the identity of presenters (FCC and/or contractor) to be established in the Outreach Plan. Each outreach event will require at a minimum two contractor personnel—one to present and one to take notes and set up presentations as appropriate, regardless of whether any FCC personnel is present for the event. The FCC will attend a minimum of the first five trips and will be present at a minimum of the first three webinars.

Before the contractor conducts any outreach events or webinars, the contractor will perform a demonstration of the presentation subject to review and approval by FCC personnel.

2.3 Travel for the in-person presentations is expected to include a minimum of

15 trips, up to a total of 30 trips, and occur over a six-to eight week period.

This includes private and public meetings with individual and groups of broadcasters and their investors and bankers, as well as presentations at conferences and workshops that may include providing education to related stakeholders, such as broadcast and wireless industry associations, potential bidders for spectrum licenses, and public interest groups.

2.4 The contractor shall review and update existing outreach materials and shall create new materials to reflect additional updates as policy and procedural documents are released by the FCC. Work performed by the contractor shall utilize work already performed by or for the FCC, including the FCC’s estimated valuation of spectrum usage rights and existing outreach materials. For example, presentations about channel sharing shall include information from the Catalogue of Potential Expenses and Estimated Cost produced by Widelity, Inc. (Widelity Report); these are either publicly available or will be provided as Government Furnished Information (GFI) upon request. The FCC has the right to distribute and alter all contractor-provided materials.

3.0 PERFORMANCE REQUIREMENTS

3.1 The contractor shall provide all labor, materials, and supervision to provide program management support described below to support the development, administration, and management of the outreach program.

The contractor shall manage and administer all services provided under this contract as coordinated with the COR. The contractor shall perform the program management functions, including the technical and business management functions that are necessary to execute the total effort required by this contract.

3.2 The contractor shall maintain timely knowledge of the FCC’s policies and procedures related to the Incentive Auction, including but not limited to existing public documents listed on the Broadcast Incentive Auction Website http://wireless.fcc.gov/incentiveauctions/learn-program/index.html), as well as additional public documents that will be issued between the start of the contract period and the start of the Incentive Auction, particularly documents that establish rules and procedures for broadcaster participation in the Incentive Auction or otherwise relevant to broadcasters. At a minimum, the FCC will be releasing a document asking for comment about details related to the implementation of the Incentive Auction, followed by a document adopting the procedures, terms and conditions that potential bidders will need to follow to participate in the auction. In addition, there shall be other policy and procedural documents released that pertain to areas of interest to broadcasters, such as inter-service interference protections from wireless devices.

3.3 The contractor shall assign tasks to personnel who have extensive experience and background in the areas, and on the topics, for which they are made responsible, and at a level of responsibility comparable to (or greater than) that required for this effort. For example, FCC anticipates staff with expertise in the following areas will be necessary: media and communications industry; financial analysis and asset valuation; business reorganizations, mergers, or other transactions, such as IPOs, involving companies valued above $1 billion dollars; demonstrated ability to advise federal government agencies; outreach and education; and specific expertise in communicating complex information to investors and other owners that results in an informed decision regarding participation in a transaction.

3.4 The Contractor agrees that it has not advised, sought to advise, represented, or acted as agent for broadcasters, their investors, or other potential auction participants with respect to the Incentive Auction, nor has its subofferors, affiliates, or other business entities over which the Offeror has control participated in such activities. The Contractor also agrees not to advise, seek to advise, represent, or act as agent for broadcasters, their investors, or other potential auction participants with respect to the Incentive Auction for the duration of this contract and for a period of 5 years after contract closeout. The Contractor agrees to apply this restriction to its subcontractors under this contract and to affiliates or other business entities over which Contractor has control. Compliance with these restrictions are a continuing material performance obligation that survive contract closeout, the breach of which may subject the Contractor to termination for cause, including breach damages for amounts previously paid.

3.5 Personnel

3.5.1 The contractor shall use a mix of personnel for creation and implementation of the Outreach Plan that includes senior personnel with a depth and currency of experience in working on projects of a similar nature and scope as the Incentive Auction; mid-level personnel with the experience and expertise to support and substitute for senior personnel, including a depth and currency of experience in working on projects of a similar nature and scope as the Incentive Auction; and junior personnel who have the experience and expertise to efficiently undertake the research, initial drafting, and organizational aspects of the creation and implementation of the Outreach Plan.

3.5.2 The Contractor shall provide the following Key Personnel to support this effort, in a number to be determined by the contractor.

If more than one such person in each category is offered by the contractor, all such personnel will be considered key:

3.5.2.1 Partner/Director: Minimum fifteen years of experience in investment banking, with at least five of those years at a managing director or senior partner level; demonstrated experience leading a team on a minimum of fifteen IPOs (initial public offerings), mergers, acquisitions, and/or financing transactions, of which at least three were valued at over $1 billion each; and, experience working in the communications/media industries/high-tech industries as evidenced by working on at least five transactions.

3.5.2.2 Vice President: Minimum ten years of experience in

investment banking or seven years of experience and a graduate degree in business, law, or engineering/computer science; demonstrated experience in a senior role leading a team on a minimum of ten IPOs (initial public offerings), mergers, acquisitions, and/or financing transactions, of which at least three were valued at over $500 million each.

3.5.2.3 Senior Associate/Associate: Minimum five years of

experience in investment banking or two years of experience and a graduate degree in business, law, or engineering/computer science; demonstrated experience as an associate or senior associate on a minimum of five IPOs (initial public offerings), mergers, acquisitions, and/or financing transactions.

3.6 Creation of Outreach Plan

3.6.1 The contractor shall create the Outreach Plan using its own expert knowledge and experience and the list of markets and broadcasters identified and provided by the Commission as most important to the succes of the Incentive Auction. When creating the Outreach Plan the contractor, based on its own expert knowledge and experience, may go beyond the required elements listed below in order to produce the most effective plan for outreach.

3.6.2 At a minimum, the Outreach Plan shall include the following elements:

3.6.2.1 A plan for selecting (in conjunction with FCC incentive auction personnel) and contacting 500 or more broadcast station owners (on an individual or small group basis), and major investors in selected stations and station groups, prior to the commencement of the Incentive Auction, with follow-up as necessary and appropriate;

3.6.2.2 How the contractor will provide multi-level outreach and educational opportunities by FCC personnel and/or contractor, including but not limited to in-person presentations to public and individual audiences; webinars;

and conference calls;

3.6.3 A plan that details the following components of the proposed travel, including but not limited to: trip name; cities to be visited;

projected dates; number and type of meetings or presentations to be given; identity of presenters (i.e., “FCC personnel” and/or “contractor”); and estimated expenses. As shown below, for illustrative purposes only, a single trip may include multiple nearby cities:

Examples of Potential Trips – For Illustrative Purposes Only

Trip Name Examples of Cities to be Visited Central New England Coast

Manchester, NH; Boston, MA; Providence, RI, Worcester, MA

Illinois – Wisconsin Madison, WI; Chicago, IL; Champaign & Springfield-Decatur, Il; Indianapolis, IN

Northern California San Francisco-Oakland- San Jose, CA; Sacramento- Stockton-Modesto, CA; Chico-Redding, CA

Southeastern Texas Houston, TX; San Antonio, TX; Austin. TX; Waco- Temple-Bryan, TX

Mid-Atlantic Richmond-Petersburg, VA; Washington, DC;

Hagerstown, MD; Baltimore, MD

3.6.3.1 A description of workshops and/or conferences that the FCC and/or contractor should offer and/or attend, including presentations for educating related stakeholders such as broadcast and wireless industry associations, potential bidders for spectrum licenses, investors and bankers, and public interest groups;

3.6.3.2 Strategies to educate decision-makers at public television stations that have different organizational structures than commercial broadcasters and may lack the same financial incentives as commercial broadcasters to participate in the Incentive Auction;

3.6.3.3 How the contractor shall present the details about the channel-sharing option, including details on the pilot project(s) that have been authorized by the Commission and provide assistance in facilitating introductions to potential channel sharing partners in the same market;

3.6.3.4 How the contractor shall maintain confidentiality of

potential auction participants while they are performing the contracted outreach activities; and

3.6.3.5 How to encourage broadcasters to seek guidance from the

FCC regarding the implementation of the Incentive Auction.

3.7 Implementation of the Outreach Plan and Road Shows

3.7.1 The contractor shall implement the outreach plan, including the “road shows” (i.e., live informational exchange sessions with broadcasters and investors, either in person or via electronic media, designed to convey Incentive Auction alternatives and decision-making information described in the Outreach Plan), once it has been approved by the COR and CO.

3.7.2 Road Show Planning. In advance of the outreach trips, the contractor shall prepare detailed plans that include location of group and/or individual meetings; method of advance notification to broadcasters regarding the meetings, including the opportunity for private meetings; identification of any specific points or arguments that should be emphasized because they are likely to be of importance in the market(s) to be visited and the broadcasters who are expected to attend the meetings; logistics regarding travel between cities; and any other factors identified by the contractor as relevant to planning for the trips. The location of the trips shall be planned in conjunction with FCC Incentive Auction personnel, as indicated in 3.6.2.3 above. The location of trips proposed by the contractor in its Outreach Plan shall be confirmed or revised on the basis of input from the COR in conjunction with other Incentive Auction personnel identified by the COR.

3.7.3 Road Show. For each city included on a road show, outreach is anticipated to consist of one small conference of 25 to 50 people, and an additional six to eight private meetings with four to ten individuals. Owners of and investors in broadcast stations are the primary communities of interest. Other potentially interested entities are broadcast and wireless industry associations, potential bidders for spectrum licenses, and public interest groups.

3.7.4 Road Show Follow-Up. After the road show, contractor will follow up with broadcast station owners and investors (on an individual or small group basis), and major investors in selected stations and station groups to answer questions and provide additional information as requested.

3.8 Outreach Materials

3.8.1 The contactor shall support the Incentive Auction Task Force and the implementation of the approved Outreach Plan by reviewing existing outreach materials and proposing updates as needed, and upon request shall create and produce updated print, electronic, and video educational materials about the Incentive Auction, including new materials to reflect policy and procedural documents that are released by the FCC.

3.8.2 In support of the foregoing, the contractor shall be required to:

3.8.2.1 Develop conceptual designs and layouts for publications and presentations as needed to update outreach materials;

3.8.2.2 Provide copywriting and technical writing services for publications and presentations as needed to update outreach materials;

3.8.2.3 Create customized materials for outreach to specific

candidate broadcasters that discuss each of options to participate in the Broadcast Incentive Auction (see paragraph 1.6) as it relates to each candidate; and,

3.8.2.4 Prepare background materials, presentation materials and press kits as needed for press conferences or press interviews to update outreach materials.

3.9 Advisory Services

3.9.1 The contractor shall provide advice to the Commission on how most effectively to present the options and financial opportunities available to broadcasters through the Incentive Auction. As the contractor and the FCC gain experience with initial outreach efforts, the contractor shall recommend any modifications to the Outreach Plan or suggest other changes or improvements to the agency’s Incentive Auctions communications that would be necessary or helpful to improve its effectiveness.

3.9.2 The FCC may seek the advisory services of the contractor to:

(1) Obtain an outside point of view on critical issues involving broadcasters and financing related to the Incentive Auctions;

(2) Obtain advice regarding developments in the broadcasting marketplace and emerging identities of interest in Incentive Auctions in that marketplace;

(3) Obtain the opinions, special knowledge, or skills of noted experts; or

(4) Support and improve the operation of FCC’s external communications program regarding the Incentive Auctions.

3.10 Status Reports

3.10.1 Bi-Weekly Status Report. The contractor shall submit a written biweekly (every 2 weeks) status report to the Contracting Officer (“CO”) and the COR. The biweekly status report shall provide a summary of accomplishments and overall status of tasks including the advisory services provided by the contractor. Status reports shall contain programmatic and financial information. Status reports shall be submitted via e-mail to the CO and the COR.

Working with the COR, the contractor shall create a draft of the format for the status report to the COR for his approval. Future status reports shall conform to the approved format.

3.10.2 Weekly Implementation Report. During the implementation and road show phase of the contract, the contractor shall provide a weekly planning report of potential travel, conference calls, presentations and similar activities in the upcoming four weeks, as well as a report of the travel, conference calls, presentations and similar activities that have occurred over the previous week.

Working with the COR, the contractor shall create a draft of the format for the weekly planning and tracking report to the COR for his approval. Future reports shall conform to the approved format.

3.10.3 Trip Approval Report. The contractor shall obtain approval for trips from the COR before travel costs are incurred. All travel requests and travel must be documented in accordance with Federal Travel Regulations.

4.0 DELIVERABLES

4.1 All products delivered under this contract shall be approved by the CO and

COR and shall be issued as Incentive Auction Task Force, Media Bureau, Wireless Telecommunications Bureau, or Commission products, as specified by the COR, or, if requested by the CO or COR, under the contractor’s name and logo or co-branded with one or more of Commission entities listed above in this paragraph.

4.2 All deliverables shall be delivered to and approved by the CO and COR via email or other agreed-upon mechanism. The CO will express her approval via email. A copy of each transmittal letter shall be forwarded to the CO for inclusion in the contract file.

4.3 Written documents shall be concise and clearly written. The contractor shall ensure accuracy, functionality, completeness, professional quality, and overall compliance with government guidelines and requirements of all deliverables. All deliverables developed for this project shall become the property of the Government, may be used by the Government without prior permission of the contractor, and shall not be used by the contractor for any other purposes. All broadcaster-specific information or documentation, with no exceptions, shall be treated as confidential and proprietary during and after the completion of work under this contract.

4.4 Schedule of Deliverables

SOW

Section Deliverable Due

3.5 Creation of

Outreach Plan

Preliminary outline for Outreach Plan components within 14 days from the start of the contract. Draft final Outreach Plan within 14 days of the acceptance of the preliminary outline by the CO or COR. Final Outreach Plan will be due within 7 days of any edits/corrections of the Draft Final Outreach Plan.

3.7 Outreach

Materials -

Updates

If drafts of updated outreach materials are requested by COR, they are due within 7 days of receipt of the new information; final documents are due within 3 business days of acceptance by the CO or COR.

3.9 Advisory

Services

Advisory services shall not exceed 240 hours (Base Period) and 200 hours (Option Period)/per service period of contractor time from partners and/or senior associates for a total of 800 hours for the option periods. The nature of the services shall be included in the bi-weekly report.

3.10.1 Status Report Bi-Weekly Status Report: Draft of Status Report within 7 days from the start of the contract. Use of status report must start within 7 days from the approval of the format by the COR.

3.10.2 Weekly

Planning and

Tracking Report

Weekly Implementation Report: Draft of Status Report within 21 days from the start of the contract. After approval of the Planning and Tracking Report by the COR, use of the report must start within 7 days from the approval of Outreach Plan.

5.0 Reserved.

6.0 Period of Performance

This is a four month base period of performance, from late-September 2014 ending late- January 2015. The base period will be followed with four (4) one-month option periods extending through May 2015.