CBO Projects $25B Net Gain from Incentive Auction - Broadcasting & Cable

CBO Projects $25B Net Gain from Incentive Auction

Bases that on midpoint of $10 billion-$40 billion sliding scale
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In response to questions from Communications Subcommittee member Sen. Dean Heller (R-Nev.), the Congressional Budget Office has estimated that the broadcast incentive auction will net $25 billion for the treasury, net of payments to broadcasters, a $1.75 billion relocation fund and auction expenses.

The FirstNet first responder network's $7 billion price tag and other statutory obligations have already been covered by the AWS-3 auction's $40 billion-plus take with billions to spare.

CBO said that $25 billion estimate was the midpoint of a range of $10 billion-$40 billion for the auction, a range it said was based on the expectation that spectrum made available from broadcasters could range from a low of only 20 MHz to over 100 MHz; that anywhere from 25% to 75% of the proceeds would be used to pay broadcasters to clear the spectrum, and assuming the prices paid are on par with those paid in the AWS-3 for that wireless spectrum.

The FCC has targeted an early 2016 time frame for conducting the broadcast incentive auction, but CBO says that might slip. If it were in 2016, CBO said it would expect the money to be available for deficit reduction within a year, but given that the FCC may need more time to resolve "technical, financial, and legal issues that are still pending at the FCC and in the courts," gives a three-year spread of 2017-2019 for the funds' availability.

The FCC has been sued by broadcasters over some parts of the auction framework, for example, with a decision not likely to come for several more weeks, and potential new auction-tweaking FCC action needed if the court sides with those broadcasters.

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