Lucky 13: AWS-3 Auction Pushes Past $12 Billion

With $12,259,404,600 bid after 13 rounds, the FCC's auction of 65 MHz of advanced wireless services spectrum has already pushed past the total reserve price of $10.587 billion — though there are two separate reserves — and announcement of its successful meeting of the largest reserve price could come as early as Tuesday.

It is not clear whether that $12 billion-plus total means both tranches of spectrum have exceeded the reserve--which is unlikely--or just one has been met, or will be met by the end of the next round later Tuesday. That is because the 1695-1710 MHz license reserve is $580 million, while the paired 1755-1780 MHz/2155-2180 MHz licenses reserve is $10.07 billion.

The FCC had made no announcement at press time, so it may be that it is close on the $10.07 billion reserve but not there yet. The caveat is that the bidding totals provided by the FCC are gross amounts that don't include bidding credits, which could reduce the actual take, perhaps even enough to leave the reserve result still in doubt, even given the gross total.

But after round 11, with $8.9 billion bid, 80-85% of the paired bands' $10.07 billion reserve had been met, while only a little over 20% of the unpaired $580 million reserve.

In round 13 concluding mid-day Tuesday (the auction started Nov. 13, so the number may be lucky for the FCC) a total of $1,744,111,500 more had been bid than in the preceding round, comprising 865 new bids for 1,296 of 1,614 licenses available.

AWS-3 is the second of three spectrum auctions mandated by Congress to fund the FirstNet interoperable broadband network, as well as local first responders, advanced 911, R&D, and deficit reduction.

The first auction, of H block spectrum, collected $1.564 billion toward that goal (FirstNet alone is $7 billion), but the FCC is already predicting that the AWS-3 auction will raise most if not all of that $7 billion, putting less pressure on the third auction, the broadcast incentive auction, scheduled for 2016.

The FCC has to pay auction expenses out of that AWS-3 total, and moving and relocation costs for the government agencies who are giving up or sharing spectrum. In its AWS-3 transition plan, the National Telecommunications & Information Administration estimated total relocation and sharing costs for the 1695-1710 MHz band at $527.1 million and for the 1755-1780 MHz band at $4.576 billion. The spectrum at 2155-2180 MHz is in FCC hands and ready for 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.