FCC's Forward Auction Starts Late July at Earliest

It looks like the forward portion of the broadcast incentive auction—the one where wireless companies and others bid for broadcast spectrum reclaimed in the reverse auction—can't start for at least four weeks and likely closer to the first week of August.

Barring a pause or slowdown in the proceedings (which would only lengthen the timeline), the reverse portion of the auction will end June 29, either in the morning or the afternoon.

The FCC's public notice on the auction says that the forward auction will begin "on the second business day after the close of bidding in the reverse auction, but no sooner than 15 business days after the release of the Qualified Bidders PN [public notice]."

That public notice can't come out until the bidders have been qualified, which can't happen until at least July 1 at 5 p.m., the deadline for submitting the upfront payments without which no bidder can be qualified.

So, the next businesses day after that would be July 5, and 15 businesses days after that would be July 26.

That is, of course, giving the FCC almost no time to process and verify the qualified bidder payments. Then there are the mock auctions and bidder education that also needs to happen after the forward bidders have been qualified.

So, an early August start looks like the best guess with the auction likely to last at least a couple of months.

What is less clear is whether the forward auction will yield enough to pay for the reverse auction, plus the auction expenses and TV station repack expenses that will come in at about $2 billion. The FCC will not reveal how much upfront money the forward auction bidders are putting up—which equates with how many blocks of spectrum they can bid on.

Estimates, and they are all only guesstimates, on how much the FCC is going to have to pay broadcasters to give up 126 MHz of spectrum have ranged from $30 billion-$40 billion to as much as $80 billion or $90 billion.

If the forward auction does not cover that outlay, the reverse auction resumes at a lower clearing target—114 MHz—which means fewer stations to pay off. That would likely push the auction into the first part of calendar 2017. The FCC has always signaled there could well be more than one round of the reverse portion of this first-ever double-sided auction.

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.