FCC bumps auction prices again as bids hit $19.6B

FCC HQ
FCC headquarters

The FCC bumped up the incremental price increases for each round of bidding as the incentive auction plodded toward completion.

Beginning Friday, the price will increase each round by 15%, up from the 10% increases that had been in place through Thursday. Additionally, the agency said bidders must use 100% of their current eligibility in each round, up from the previous 95%, forcing them to spend all the bidding credits in each round that they had previously committed to.

Bidders committed to spend slightly more than $19.6 billion as of completion of Thursday’s final round as activity continued to center on smaller markets. The auction of 600 MHz airwaves passed the $19.45 billion mark Tuesday morning after the FCC increased the number of rounds per day from four to six in another move to spur activity.

Bidders are vying for 70 MHz of spectrum divided into seven 10 MHz blocks in each market. The auction met both components of the “Final Stage Rule” last month, eliminating the need to return to TV broadcasters a fifth time to negotiate for their airwaves. So the forward auction could end any day.

The event must continue until there are no new bids for airwaves in any market, however.

Last week, the auction became the FCC’s second-biggest spectrum selloff in terms of revenue, behind the AWS-3 auction that ended in January 2015 after generating nearly $45 billion in bids. But the ongoing auction of 600 MHz airwaves has largely been viewed as a disappointment: TV broadcasters had set an initial clearing cost at a staggering $86.4 billion for 126 MHz at the outset of the incentive auction last May, but that figure was lowered dramatically—as was the amount of spectrum made available—in subsequent rounds.

Both components of the Final Stage Rule were met last month, though, and forward bidding in Stage 4 could end any day, as Walter Piecyk observed via Twitter. "FCC spectrum auction +75 million today," Piecyk tweeted late Wednesday. "The end is near."

The identities of winning bidders won’t be released until after an assignment phase that could last several weeks as bidders haggle over specific spectrum blocks in the markets in which they’ve been awarded airwaves. The FCC must also issue a Channel Reassignment Public Notice detailing the repacking process before winners can be announced.

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