If the early rounds are any indication, it will be a long road to the $88 billion-plus the FCC needs to generate in bids on 126 MHz of reclaimed broadcast spectrum to pay those broadcasters and cover other expenses.
The auction is actually structured to go multiple rounds, and the FCC will likely have to reduce that spectrum target at least once—to 114 MHz initially.
With six rounds completed in the forward portion of the auction—wireless companies and others bidding on 126 MHz of reclaimed broadcast spectrum—$11,059,842,000 has been bid. Minus bidding credits and discounts, that means the FCC has raised $10,520,000,000 towards the $88,379,558,704 it needs to cover the cost of 1) paying broadcasters for their 126 MHz worth of spectrum, 2) paying them to move off that spectrum, and 3) paying for the auction itself. The bidding also has to meet certain price benchmarks in the top 40 geographic market areas before it can close the auction.
Round six bidding was up $400-plus million over round five, when the total was $10,587,290,987, which netted out after discounts and bidding credits to $10,050,000,000.
If the FCC does not meet that top market price or cover the $88-plus billion, it will lower its spectrum clearing target to 114 MHz and continue the reverse auction at the lower payout, then take a second crack at covering that with a new forward auction.
The FCC is currently holding two two-hour bidding rounds per day but could increase or decrease that. The forward auction began Aug. 16.
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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.