FCC Speeds Up Spectrum Auction

Current bidding tops $12 billion, with still a long way toward goal

In an effort to speed up the spectrum incentive action process -- and to encourage more bidding -- the FCC starting Tuesday (Aug. 23) will increase the number of daily rounds in the forward portion of the auction to three and cut the bidding time per round in half.

The bidding has so far been conducted in two, two-hour rounds per day (10 a.m-12 p.m. and 2-4 p.m.), but Tuesday will shift to three, one-hour rounds per day (10-11 a.m., 1-2 p.m. and 4-5 p.m.).

As of the end of Round 8 Monday (Aug. 22), a total of $12,043,700,000 had been bid, up from $11,526,999,000 bid in round seven.

Net of discounts and bidding credits, Round 8 has brought in $11,490,000,000 toward the $88,379,558,704 needed to cover the $86-plus billion the FCC has promised to pay broadcasters for the 126 MHz of spectrum they agreed to give up for re-auctioning for wireless broadband, plus about $2 billion in auction expenses and paying broadcasters to relocate after the auction.

The bid total has been moving up at a pace of $400 million-$500 million per round.

There are 416 geographic areas being bid on, with the FCC increasing the prices on that spectrum by 5% in each round to winnow the field of bidders and collect enough to close the auction, which will only happen when that $88.379 billion figure is met and a minimum price in the top 40 markets is reached, irrespective of what clearing target the FCC eventually meets.

The commission has set a number of such targets. For example, if it does not raise enough in the forward auction, it will lower the target from 126 MHZ to 114 MHZ, then continue the reverse auction at that lower spectrum -- and payout -- target, then hold another forward auction to try to cover that lower amount.

Most observers see the auction having at least a couple of stages and the spectrum clearing target being lowered at least once and perhaps more times. The auction was designed to let the marketplace set the ultimate spectrum target and price for clearing.