Incentive auction meets criteria, will end after Stage 4

spectrum
The incentive auction of 600 MHz spectrum will have total proceeds of $18.2 billion, far surpassing TV broadcasters’ asking price of $10 billion.

The incentive auction of 600 MHz spectrum will end—finally—at the close of Stage 4.

Bidders met both components of the “Final Stage Rule” during the second round of forward bidding in Stage 4 Wednesday afternoon, with total proceeds of $18.2 billion, far surpassing TV broadcasters’ asking price of $10 billion. The spectrum price also increased to $1.257 per MHz/pop, topping $1.25 per MHz/pop in the top 40 markets, which is the second criterion for allowing the auction to end.

The forward auction will continue through Stage 4 before wrapping up and moving to an assignment phase during which bidders can bid on specific blocks in specific markets. (Forward auction bids during the main event were for generic 10 MHz blocks.) A total of 84 MHz of spectrum will be released for wireless use.

Sponsored by Blue Planet, a division of Ciena

NaaS demystified. What's behind the latest evolution and how can CSPs benefit from closed-loop automation and open APIs to help deliver new 5G-based services.

Blue Planet® powers OSS and network transformation with a state-of-the-art, holistic NaaS framework.

“The world’s first spectrum incentive auction has delivered on its ambitious promise,” FCC Chairman Tom Wheeler said in a prepared statement. “We will repurpose 70 MHz of high-value, completely clear low-band spectrum for mobile broadband on a nationwide basis. On top of that, 14 MHz of new unlicensed spectrum—the test bed for wireless innovation—will be available for consumer devices and new services. The auction will provide $10.05 billion to broadcast television licensees who participated and billions towards deficit reduction.”

That sum is a far cry, though, from the $45 billion in bids generated by the landmark AWS-3 auction, which ended in early 2015. 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.

Stages 2 and 3 lasted only a single round, in fact, indicating that carriers and would-be wireless service providers may be less interested in 600 MHz than they once were. TV broadcasters set a clearing cost last week of just more than $10 billion for up to 84 MHz of airwaves, falling far short of the $40.3 billion set in Stage 3.

The assignment phase is likely to last “several weeks,” according to BTIG Research, and the FCC must issue a Channel Reassignment Public Notice detailing the repacking process before winners can be announced. BTIG predicts the names of winning bidders will be released around March 1, and the anticollusion period could end roughly two weeks later, enabling bidders to once again negotiate deals involving spectrum.

“While further bidding in the reverse auction will no longer be required, preparation for and execution of the assignment phase of the forward auction could take several more weeks,” said Dan Hays of PwC in a statement to media. “Once that is done the real work to repack hundreds of broadcast licensees and free up 70 MHz of spectrum for mobile networks will begin.”

Suggested Articles

The win is a breath of fresh air for Nokia, which has struggled this year with loss of contracts in China and competition from Samsung.

T-Mobile on Tuesday turned on the mid-band frequencies for 5G in 121 new locations.

Incredibly, as a result of the settlement, the whistleblower will receive more than $40 million of the $116 million proceeds from AT&T and Verizon.