FCC ups rounds in incentive auction to spur 'anemic' bidding

FCC HQ
FCC headquarters

Forward bidding in the final stage of the FCC’s incentive auction “is proceeding at an anemic pace,” BTIG Research said, pushing back the expected time when bidders will once again be able to discuss potential spectrum deals.

And on Thursday, the FCC boosted the number of rounds per day in an effort to spur activity.

Beginning Monday, the commission will switch from the current schedule of two two-hour rounds per day to four one-hour rounds, although increments per round remain unchanged. Bidders hoping to pick up TV broadcasters’ 600 MHz airwaves had committed $18.5 billion through round 11, which ended Thursday.

The bidding amount has increased only 4% over the past week, BTIG noted, and the most active bidding has been in markets outside the top 40.

“There has not been bidding in the top 40 markets since Round 5 when activity in Chicago and Cleveland ended,” Walter Piecyk of BTIG Research wrote (reg. req.). “Two markets have excess supply of spectrum. San Diego has five winning bidders for seven available blocks of spectrum. Los Angeles has six winning bidders for seven available blocks. Both markets entered Stage 1 of the auction with limited supply of 4 and 5 blocks, respectively.”

The forward auction will close only when demand is equal to or less than supply of all 832 market licenses.

The FCC also updated information on the “assignment phase” of the auction, which will follow the end of the forward auction. Bidders thus far have bid only on generic blocks in each market; during the assignment phase they will bid for specific frequencies.

The recent slowdown in bidding led BTIG to push back its projected timeline for the entire event.

“As you can see, the ripple effect of this action pushes the end of the anti-collusion period to March 31” rather than March 15, which had been BTIG’s previous estimate. “That will not be welcome news for an industry that has been unable to discuss strategic transactions for over a year and now operates under an administration many believe, rightly or wrongly, that anything goes.”