Broadcasters Price Spectrum at $40 Billion

The third stage of the FCC’s broadcast incentive spectrum auction closed Dec. 1 after 52 rounds, with broadcasters’ new asking price now $40.3 billion for 108 MHz of spectrum. That’s less than half broadcasters’ original asking price, though it was for more spectrum. Preston Padden, who formerly represented TV stations eyeing the auction, called the price “a genuine bargain for the carriers and other bidders.”

Stage three of the forward auction begins Dec. 5, with all eyes on whether those bidders, wireless companies and others, will beat, meet, or at least approach that total. Beating or meeting it means the auction can close and the FCC can start the process of repacking TV stations into smaller space.

One analyst had his doubts. “At $40.3B, we believe that the cost is still far beyond the appetite of mobile network operators,” said Dan Hays of PwC Strategy & Consulting. “This makes a fourth stage of the auction a virtual certainty. Even more disturbing is…the large gap between the forward and reverse auctions could persist, and perhaps be an early indicator of a potential eventual failure to successfully complete the auction altogether.”

So far, forward auction bidders (primarily wireless companies looking to use the spectrum for broadband) have failed to come near broadcasters’ two asking prices—$86 billion for 126 MHz and $55 billion for 114 MHz, offering $22B both times.

John Eggerton

Contributing editor John Eggerton has been an editor and/or writer on media regulation, legislation and policy for over four decades, including covering the FCC, FTC, Congress, the major media trade associations, and the federal courts. In addition to Multichannel News and Broadcasting + Cable, his work has appeared in Radio World, TV Technology, TV Fax, This Week in Consumer Electronics, Variety and the Encyclopedia Britannica.