Stage Three of FCC Reverse Auction Reaches Midpoint
During all the sturm und drang over Donald Trump's stunning presidential upset and calls from Republicans for the FCC chairman to ramp down his agenda, one thing they were not looking to preempt or delay was the broadcast spectrum incentive auction.
While the political world was shifting on its axis, the reverse auction has been humming along and Wednesday reached what is expected to be roughly the midpoint, round 26 of an expected 52. There could be a couple more rounds depending on how the bidding goes, but round 27 is also Wednesday, so the FCC is at least at the midpoint of stage three of reverse bidding, where the FCC reduces the price of spectrum until no broadcaster is willing to go any lower to give it up.
To recap, so far, broadcasters' stage one price for exiting 126 MHz was $86.4 billion, but bidders in the forward auction—wireless companies and others bidding on that reclaimed spectrum—only offered $22.4 billion.
The FCC intentionally set the opening broadcaster offers high and constructed the auction for multiple rounds to let the marketplace, TV station sellers and wireless carriers agree on an ultimate price point. So far, the first two stages of both the reverse and forward portions of the auction have seen the two sides far apart in price, and the FCC has now twice reduced the spectrum clearing target given that forward auction bidders have not met the asking price.
In stage two of the reverse auction, broadcasters' clearing price for 114 MHz was $56.5 billion, while forward auction bidders only offered $21.5 billion and that auction only went one two-hour round, with bidders simply lowering their demand rather than raising their price.
Stage three of the reverse began Nov. 1 and, with breaks for the long Thanksgiving Holiday—no bidding Nov. 23-25—will likely not be over until Dec. 1.
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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.