John Malone's Liberty Global drops out of FCC's 600 MHz incentive auction

The FCC published its final list of participants for the upcoming 600 MHz incentive auction of TV broadcasters' unwanted airwaves, showing 99 completed applications. Notably absent from the list is Liberty Spectrum, a subsidiary of Liberty Global.

As reported by Bloomberg BNA, Liberty Spectrum was among the initial 104 entities that applied to participate in the auction, according to the list the FCC published in March. Of those 104 applicants, 69 had filed complete applications and 35 had filed incomplete applications. There were a handful of notable names on the list of entities that had filed incomplete applications, including AT&T and Liberty Spectrum. Those entities had until April 6 to file a complete application to bid in the auction.

Only five of the 35 entities missed that deadline, and Liberty Spectrum is the most notable. According to Bloomberg BNA, an FCC spokesman said that Liberty Spectrum had decided against participating in the auction shortly after it filed its initial, incomplete application.

Liberty Global is the world's largest international cable company with 27 million customers, mainly in Europe. American billionaire John Malone is the company's chairman. Through the Liberty Broadband unit he controls, Malone will own 18 percent of "New Charter," which is the U.S. cable company that will be created through the combination of Charter Communications, Time Warner Cable and Bright House Networks. That blockbuster cable merger is expected to officially close in the coming days following recent regulatory approvals.

The other four entities that didn't file complete applications in the FCC's incentive auction are Lisa Wendl, G-Wire, Laboral Data Systems and Oracle executive Thomas Kurian, who didn't return requests for comment to Bloomberg BNA.

T-Mobile (NYSE:TMUS), AT&T (NYSE: T), Verizon (NYSE: VZ), Dish Network (NASDAQ: DISH) and Comcast (NASDAQ: CMCSA) are among the high-profile companies that have been approved to bid in the FCC's upcoming auction. The agency recently announced it will auction 126 MHz during the event, the maximum amount it could gather from TV broadcasters. That amount of spectrum is surprisingly high, and indicates Verizon, AT&T and T-Mobile likely will be able to walk away with as much spectrum as they want -- if they're willing to pay for it.

The FCC's incentive auction will be split into two parts: the reverse auction and the forward auction. The reverse auction involves the FCC paying TV broadcasters to give up their spectrum, with the lowest bid winning. That auction starts May 31.

Then, after the reverse auction is over, the forward auction will start, likely sometime in June. The forward auction will be a standard spectrum auction where bidders (which will remain anonymous until the end of the auction) will bid for spectrum blocks around the country, and the highest bid wins. The forward auction will need to raise enough money from bidders to pay TV broadcasters for the spectrum they relinquished during the FCC's reverse auction.

Analysts at Wells Fargo estimated that AT&T could spend up to $10 billion on a 2x10 MHz chunk of nationwide spectrum during the incentive auction, and T-Mobile will bid as much as $8 billion and Verizon could bid as much as $5 billion. Analyst estimates for total bids during the event have ranged from $80 billion to $25 billion.

For more:
- see the FCC's list of completed applications
- see this Bloomberg BNA article
- see this B&C article

Special Report: 600 MHz incentive auction primer: Who will bid, when it will happen, how it will work, and how much money it will raise

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