The total amount bid for broadcast spectrum in the forward auction continued to rise by greater increments as the FCC finished off the first day of more, shorter, rounds per day.
At the end of round 12 at 5 p.m. Aug. 23, a total of $14,440,301,000 had been bid, which was a net $13.820 billion after discounts and bidding credits. (Initially this round was incorrectly identified in the story as 11).
That total was up over $650 million from the $13,789,320,987 bid in round 11 (net $13.190 billion minus discounts and bidding credits). The round 10 total had been up over $600 million from the previous round.
The FCC increased the number of rounds from two to three starting Tuesday, and reduced the time to bid from two hours to an hour in each round. Previously, dollar bidding totals had been going up at a clip of $400 million-$500 million per round. It has been raising the asking price for the spectrum blocks by 5% each round.
Bidders also must bid on at least 95% of their bidding units in each round, though they can make strategic shifts among all the available blocks.
The $13.190 billion figure is the one that will eventually have to total at least $88,379,558,704 to cover the cost of paying broadcasters, paying for the auction, and paying for TV station relocations after those bidding in the auction get access to the spectrum.
If it falls short, the FCC will reduce the amount of spectrum it is buying from broadcasters and then hold a second forward auction to try and cover that lesser amount.
The FCC has multiple targets down to 70 MHz to get more for the spectrum in the forward auction than it has paid in the reverse portion, which is the only way it can close the auction.
The FCC has divided 126 MHz of spectrum reclaimed from broadcasters into 416 partial economic areas (PEAs). there are 62 parties bidding on that spectrum for mobile broadband, including Comcast, Dish, and AT&T.
At the current pace of $600 million-$650 million per round and three rounds per day, it would take another couple of months for the forward portion to reach that break-even figure and the auction to close.
But the FCC is prepared to lower its spectrum-clearing target from 126 MHZ to 114 MHz if it does not reach $88.379 billion and return to the reverse auction, where it would pay broadcasters less, then see if a second stage of the forward auction would cover that amount. It has several other lower targets--down to 70 MHz--as further fallback positions.
The FCC can also speed or slow the process by increasing or decreasing its spectrum asking price in each round, adding more rounds, or cutting back on them.
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.
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