FCC

FCC: Reverse Auction Stage 4 to End Jan. 13

Agency boosts bidding pace to make date 1/04/2017 3:15 PM Eastern

The FCC is again increasing the pace of bidding in the reverse portion of the incentive spectrum auction, with a target end date of Friday, Jan. 13.

 

So far, broadcasters have not had much luck getting wireless providers and other forward auction bidders, which include Comcast, to collectively pay their clearing price. The reverse portion is now in its fourth round, with wireless companies not coming close to the first three price points.

 

Currently, there are three rounds of bidding per day of an hour per round.

 

Starting Jan. 10, the FCC will increase that to four one-hour rounds per day.

 

At that rate, the FCC's base clock will have reached zero on Jan. 13, round 52. It could take an additional two rounds depending on whether the final bidding status of any VHF station was not settled by then. If so, the FCC will add a couple more rounds on that day to make sure it wraps up Jan. 13.

 

The FCC increased the rounds from two to three on Dec. 19.

 

In the reverse auction, broadcasters compete to give up spectrum for an FCC payout, in this case 84 MHz. When that payout number is established, stage four of the forward auction begins, where wireless bidders have to at least meet that figure.

 

Bidding in stage four of the reverse auction began Dec.13, only days after wireless bidders again failed to bid up their original price points, leaving the gap between ask and offer at $20 billion.

 

Stage three of the reverse auction ended with the broadcasters asking $40,313,164,425 for 108 MHz of spectrum (the "clearing target"), but bidders only offering $19,676,240,520. In stage two, the price was $55 billion for 114 MHz, but forward auction bidders, who had only ponied up $22 billion in stage one toward an opening price of $86 billion for 126 MHz, did not budge, simply reducing their demand rather than up the price, a strategy they repeated in round three.

 

The FCC has nine different spectrum targets. So there remains an opportunity for a meeting of the financial minds, but as each spectrum target drops, broadcasters continue to question the urgency of trying to transfer that spectrum from broadcasters to wireless companies.

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