The process will begin again with round 4 of the reverse auction most likely on Dec. 13. NAB President Gordon Smith's reaction: "The results of the latest round of the TV auction leave us scratching our heads, given the decade-long refrain of a spectrum crunch. We look forward to the next round."
No Movement In Round 3 Of Forward Auction
The latest round of bidding by wireless interests on broadcast spectrum began today and promptly ended with no movement.
The latest round needed to to raise about $42.3 billion to avoid Stage 4 of the auction. At $19,676,240,520, it fell far short. Now the FCC will lower its target and begin again, with stage 4 of the reverse auction probably set to begin on Dec. 13. The commission said it will make that announcement on Friday, Dec. 9.
Commenting, Wells Fargo analyst Marci Ryvicker said today’s news “means that this auction is NOT going as well as the FCC had planned. We do NOT think it is because spectrum in general has lost its value — we think it’s because the timing of this particular auction was ill-planned.” The good news, Ryvicker added, “is that should this thing fail, it is likely going to do so sooner rather than later. And we wonder if the whole regulatory landscape might change the broadcasters’ desire to even ”sell” their spectrum. Meaning, if there is a good chance that [under the Trump administration the ownership] cap will be lifted and the local ownership rules eliminated, some of these broadcasters might want to keep their valuable spectrum for deals, as well as ATSC 3.0.
NAB President and CEO Gordon Smith had this reaction: “The results of the latest round of the TV auction leave us scratching our heads, given the decade-long refrain of a spectrum crunch. We look forward to the next round.”
Preston Padden, the executive director of the now disbanded Expanding Opportunities For Broadcasters Coalition, said: “This is not an auction. It is a joke and an abuse of the broadcasters, the FCC and the public who will be put through a disruptive repacking process that increasingly looks unjustified. The question is why the carriers lobbied so hard for a statute to authorize an auction of spectrum they don’t want. The carriers now have twice walked away from blocks of spectrum they told Congress was “vital” and for which they predicted bidding as high as $48 billion.”
And PwC Strategy& Principal Dan Hays had this analysis: “The relatively quick completion of the third stage of the forward auction comes as no surprise given pre-auction indications from potential purchasers and the current state of the mobile industry in the United States. Despite strong commitments to date from buyers in the forward auction, top-line proceeds may struggle to make it north of $20 billion as operators’ capital spending priorities have seemingly shifted away from spectrum at this time.
BRAND CONNECTIONS
“It is clear is that the next stage of the auction will need to continue to peel back the cost of broadcaster’ spectrum. With a more dramatic, 24 MHz drop in demand — from 108 MHz in the third stage to just 84 MHz in the upcoming fourth stage, a significant reduction in the cost to clear broadcasters is likely, bringing the auction to a close after the start of the new year,” Hays concluded.
Comments (2)
Ellen Samrock says:
December 5, 2016 at 2:40 pm
So where is this spectrum crunch that the Chicken Little crowd insists is looming? If it exists, it’s clear that low band 600 MHz spectrum isn’t fulfilling it. The other question is that since the Dems have been promising a vacant channel set aside of free spectrum in every market along with white spaces, why should companies pay for any of this low band spectrum when they have the promise of getting it for nothing? Those who concocted and promoted the incentive auction whined that broadcasters and the NAB were out to sabotage its success. But the truth is that the wireless providers themselves aren’t that interested and they are the ones deciding the outcome.
David Siegler says:
December 6, 2016 at 3:05 pm
Many of us in the industry have said that the issue for the wireless providers isn’t a shortage of spectrum but a capacity limitation from the underlying methodologies they use to connect devices.