Round 26: Spectrum Auction Bids Up Fraction of a Percent

Related: Auction Fails to Meet $88.4 Billion Target

With bids for spectrum in the forward portion of the FCC spectrum auction continuing to creep up, more markets saw demand no longer exceed supply, and at prices lower than the current FCC ask.

The total bidding in round 26 was $23,058,536,900, which was only $70 million, or a fraction of a percent raise, over  the $22,985,963,900 bid total in round 25

The FCC continues to raise the price, but the bids in the top markets are no longer following in lockstep.

Related: Court Decision Raises Edge Provider Regulation Issues

The net total for round 26 was $22.4 billion, which will have to total $88.4 billion--now highly unlikely--for the FCC to close and finish the auction.

More likely the 62 bidders in the forward auction will not pony up that much and the FCC will have to lower its target for clearing spectrum from 126 MHz to 114 MHz and see of that total drives enough demand to cover a lower spectrum-clearing cost figure than $88.4 billion.

One thing working in the FCC's favor is that decreasing supply should raise the prices of the beachfront spectrum, which is clearly in demand, just apparently not at the price the FCC had to pay broadcasters to clear it.

Related: D.C. Court Rejects Spectrum Auction Challenge

In round 25, there were still two top 10 markets—Los Angeles and Houston—where demand exceeded supply. In round 26 there were none in the top 10.

In fact, among the top couple of dozen PEA's (the FCC divided the licenses into 416 partial economic units), only in one of two Cleveland PEAs was there excess demand (bids for 5 licenses with only one available), and only there was the FCC getting its most recent asking price.

The FCC has been raising the price by 10% per round in an effort to try and find where bidders are actually going to tap out, which it seems to be succeeding in doing.

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.