600MHz auction bids reach USD18.6bn; bidding increments to increase next week

26 Aug 2016

According to the Federal Communications Commission (FCC), the 600MHz Broadcast Television Spectrum Incentive Auction (‘Auction 1002’), which commenced on 16 August, has generated total bids worth USD18.579 billion after 18 rounds of bidding. Round 19 is scheduled to commence today (Friday 26 August). As expected, spectrum allocations covering New York and Los Angeles have attracted the highest bids thus far, followed by the likes of Chicago, San Francisco, Baltimore-Washington, DC, Philadelphia, Boston, Dallas and Miami.

Going forward, as of Monday 29 August the FCC will use a 10% increment to set new ‘clock prices’ for all spectrum lots in each round of bidding. The move comes at a time when industry insiders have cast doubts over the likelihood of the auction reaching its target (see below). Currently, the ‘clock price’ for each round is set by adding a fixed 5% increment to the previous round’s ‘posted price’.

TeleGeography notes that the current Auction 1002 ‘Forward Auction’ was preceded by a ‘Reverse Auction’ between the FCC and the TV broadcasters that held the 600MHz spectrum. This process saw the ‘clearing cost’ for 126MHz of spectrum established at USD86.423 billion, significantly exceeding analyst expectations. If that figure is not met in the Forward Auction the FCC will reduce the amount of spectrum it will free up and resume bidding with TV broadcasters in a second stage of the Reverse Auction.

United States, Federal Communications Commission (FCC)