Incentive Auction Ending At $18 Billion

The FCC said that with the results of today’s rounds of the forward auction, the bidding has satisfied the requirements of the incentive auction’s Final Stage Rule, meaning that the auction will successfully conclude in Stage 4. Outgoing FCC Chairman Tom Wheeler said: "The auction will provide $10.05 billion to broadcast television licensees who participated and billions towards deficit reduction."

Stage 4 of the FCC’s forward auction effectively ended Wednesday afternoon with wireless operators bidding $17.7 billion for the 84 MHz of TV spectrum up for grabs. Participating broadcasters will receive $10 billion, with the rest going to reducing the government’s deficit.

The FCC said that with the results of today’s rounds of the forward auction, the bidding has satisfied the requirements of the incentive auction’s Final Stage Rule, meaning that the auction will successfully conclude in Stage 4.

Bidding will continue in Stage 4 until there is no excess demand in any market and following the close of the clock auction, the commission will conduct an assignment phase where winning wireless bidders may bid for specific blocks.

Participating broadcasters will receive $10 billion.

To provide bidders with additional time to bid in the first round after the spectrum reserve has been implemented, Round 3 will be extended to six hours. It will be held tomorrow, Jan. 19, from 10 a.m. until 4 p.m. ET. As previously announced, there will not be any bidding on Friday, Jan. 20.

On Monday, Jan. 23, the auction will resume and once again use the following two-round bidding schedule: 10-noon ET and 2-4 p.m. ET.

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FCC Chairman Tom Wheeler commented: “The word’s first spectrum incentive auction has delivered on its ambitious promise. Reaching the Final Stage Rule means the benefits of the auction are indisputable. We will repurpose 70 MHz of high-value, completely clear low-band spectrum for mobile broadband on a nationwide basis. On top of that, 14 MHz of new unlicensed spectrum — the test bed for wireless innovation — will be available for consumer devices and new services. The auction will provide $10.05 billion to broadcast television licensees who participated and billions towards deficit reduction. 

“There is still a long road ahead to successfully implement the post-auction transition of broadcast stations to their new channels and bring the new wireless and unlicensed spectrum to market. This will be an extremely important task for my successor and the new commission; I wish them well.”

Preston Padden, the executive director of the now disbanded Expanding Opportunities For Broadcasters Coalition, said: “When this process began, the carriers proclaimed their urgent need for 600 MHz spectrum. But, there was great concern whether broadcasters could be brought to the auction. In part through the work of the EOBC, the broadcasters showed up. But, interest among the carriers declined. In the end, the carriers left 42 MHz of 600 MHz spectrum on the table — spectrum broadcasters were willing to sell. A full post mortem will take time. But it appears that delay, complexity and shifting carrier priorities led to a result that was less than it could have been.”

NAB EVP of Communications Dennis Wharton said: “NAB looks forward to the close of the incentive auction, and to working with the FCC and Congress to develop a repacking plan and transition schedule that protects viewers and avoids service disruptions.”



Comments (9)

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Ellen Samrock says:

January 18, 2017 at 6:56 pm

The scuttlebutt is that a lot of the noncoms settled for 50% and a move to VHF, which might explain the low 10B amount for participating broadcasters in stage 4. As predicted, Tom Wheeler is putting a smiley face sticker on what is basically a failed auction, given its stated goals. I doubt the FCC will attempt anything like it again. But at least the auction is concluding on Wheeler’s watch. That means he and the Dems own this turkey. The rest of us can move on to 3.0 and better times.

Andrea Rader says:

January 19, 2017 at 4:05 am

So much for “spectrum scarcity.” The FCC bought it hook, line and sinker. The NAB was right.

David Siegler says:

January 19, 2017 at 9:40 am

At the beginning of this auction wasn’t the estimated revenue to the treasury in the $28B range? Right now they are looking at about $7B in profit. I wonder what our incoming president would do if one of his companies under-delivered by 75%. “You’re Fired!” comes to mind.

    LeeAnne Villodas says:

    January 19, 2017 at 9:50 am

    Bill You are right on with one exception. The $7B profit is actually $5B as there are the repack costs and overhead that needs to be added to the $10B cost to acquire the spectrum.

    Veronica Serrano Padilla says:

    January 19, 2017 at 5:13 pm

    The incoming president would just file for bankruptcy once again…

    Wagner Pereira says:

    January 19, 2017 at 10:03 pm

    Just like the Airlines, American Car Companies and once high flying tech companies such as @home which pioneered home broadband.

    Veronica Serrano Padilla says:

    January 20, 2017 at 6:49 am

    Is “Airlines” the name of a company? How about “American Car Companies?” No, this means they should not be capitalized. Being an “insider” you should be smart enough to know this. Guess you’re not. This is for you: http://jlbenet.com/wp-content/uploads/2013/07/IMG_1399-e1440438276607.jpg

Gregg Palermo says:

January 19, 2017 at 10:53 am

$7B is revenue for underutilized spectrum is a lot of money unless you play the “it should have been more” game. And it is a game.

Paul Hoagland says:

January 19, 2017 at 5:45 pm

So the FCC screwed with a business that already is not healthy in order to realize a whopping $7B…which they will spend while you are sleeping tonight (Fed spends $121,067 every second and that is in 2011 dollars). Even a tv broadcaster should be able to figure out that deal sucks. Of course, that doesn’t take into account the favor they did for those wonderful folks at the ISP’s.


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