AWS-3 Auction Powering Toward $20 Billion - Broadcasting & Cable

AWS-3 Auction Powering Toward $20 Billion

Reserve of $10 billion recedes in rearview mirror
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After 16 rounds, the FCC's AWS-3 auction appears to be a runaway success.

Having already met its $10.07 billion reserve price for the vast majority of licenses up for auction three rounds ago, the auction hit new heights Wednesday with $18,567,380,500 bid so far and a whopping $2,137,174,300 bid in the latest round alone on 949 new bids.

It took only three days—the auction launched Nov. 13—to exceed the key reserve figure (there is a separate, $580 million, reserve on an unpaired block of 15 MHz of spectrum, but whether or not it is met that will not hold up the auction). It is unclear whether it had been met at press time, though after round 15 only some 30% of the licenses in that block had been bid on.

More than half of that $2 billion in new bids came in New York alone.

One broadcaster called the strong bidding great news—it relieves pressure on the upcoming broadcast incentive auction to raise money for FirstNet, the interoperable broadband first responder network, and other purposes.

So far, there have been bids on 1,315 of the 1,614 license up for auction, a total of 65 MHz of advanced wireless spectrum (hence the AWS). There are 70 qualified bidders including AT&T, Verizon Wireless and T-Mobile.

The AWS-3 auction may now officially be a success, or at least a partial one, but it won't be over until there are no bids or bid waiver requests in a round for either the paired or unpaired spectrum.

AWS-3 is the second of three spectrum auctions mandated by Congress to fund the FirstNet interoperable broadband network, as well as local first responders, advanced 911, R&D, and deficit reduction.

The first auction, of H block spectrum, collected $1.564 billion toward that goal (FirstNet alone is $7 billion), but the FCC is already predicting that the AWS-3 auction will raise most if not all of that $7 billion, putting less pressure on the third auction, the broadcast incentive auction, scheduled for 2016.

The FCC has to pay auction expenses out of that AWS-3 total, and moving and relocation costs for the government agencies who are giving up or sharing spectrum.

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