FCC

Spectrum Auction Fails to Meet $88.3 Billion Target

FCC will have to reset at 114 MHz 8/30/2016 5:26 PM Eastern

The FCC said Tuesday that the forward portion of the broadcast incentive auction has now closed, after round 27, without meeting the conditions necessary to extend it to a Round 28 or to meet the $88.3 billion target bidders needed to to cover the cost of payments to broadcasters.

 

If fell far short of that, generating only $23,108,037,900 in total bids and netting just $22.45 billion after bidding credits and discounts.

 

Bidding had slowed appreciably, and showed signs it would clearly not hit the $88.3 billion mark -- the FCC's magic number.

 

The FCC has not yet announced when it will start Stage 2, which means going back to broadcasters at the lower clearing target.

 

The auction was planned for multiple rounds, but having to go back to a reverse auction and then a second stage forward auction will add to the time frame and mean fewer broadcasters will get a big payday, though the prices could go up for the spectrum given that supply is being reduced.

 

The FCC will likely start stage 2 of the reverse auction next week. It has to leave at least five days between stages, but probably won't take much more than that.

 

The original reverse auction took four weeks, so that is probably a good gauge for the stage 2 reverse. The stage 1 forward auction took two weeks.

 

In the next five days the FCC will release new information on a new spectrum target and when the reverse auction will begin. It will also put out a refresher tutorial for broadcasters.

 

The FCC will be buying fewer stations in the reverse auction this time around. Some stations will be getting lower prices, and some of those could drop out, deciding they don't want to sell at that price.

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