FCC Boosting Auction Per-Round Spectrum Price Increases to 10%

Move should speed proceedings

The FCC is doubling the asking price increases for spectrum in the forward auction to 10% per round, up from the 5% per round it has been implementing so far.

The change will take effect as of Monday, Aug. 29. The FCC can raise the increments anywhere from 1% to 15% per round.

The forward auction is a "clock" auction where the FCC increases the price of the 416 available geographic spectrum licenses in each round. Upping the price increase is one way of speeding the process, which is important particularly if the FCC can't raise enough to pay broadcasters and has to lower its spectrum target in a second take on the reverse auction then hold a second forward auction after that.

As of the end of round 16, the bidding stood at a total of $17,149,091,000, which net of bidding credits and discounts means the FCC has raised $16.49 billion toward the $88,379,558,704 it needs to cover broadcaster payments and auction costs.

That is up from the $16,391,244,000 and $16,391,244,000 net in round 15, when the FCC met the first of two benchmarks for closing the auction.

In the forward auction, 62 parties are eligible to bid on 416 PEAs (partial economic areas). Those include Comcast, Dish and AT&T. They are bidding on broadcast spectrum the FCC reclaimed from broadcasters in the reverse auction.

If, as most observers speculate, bidders do not pony up enough to meet that $88.379 billion benchmark at the 126 MHz clearing target in this, stage one, of the auction, the FCC will lower its sights to 114 MHz, pay broadcasters less in a continuation of the reverse auction, and hope to cover that lower figure in a new forward auction.

The FCC has set nine spectrum-clearing targets ranging from the current high of 126 MHz to 42 MHz—depending on how the marketplace values the spectrum.

If the auction goes to a second stage, it could push into calendar year 2017.