FCC Could Boost Reverse Auction Round Total

Commission increased number of rounds after couple of weeks in first stage
Author:
Publish date:
Social count:
0

The reverse portion of the FCC's incentive auction moved into its second week Tuesday as the FCC tries to get a bid dollar total for 114 MHz of spectrum that wireless companies will be willing to cover in the forward auction.

The FCC is not sharing any information about the ongoing bidding, as it does with the reverse auction, but bidding began in stage two of the reverse auction Sept. 13 with a single four-hour round, followed by two two-hour rounds per day since.

If past is prologue, the commission will soon—perhaps as early as this week—announce it is moving to three rounds per day as bidders get more comfortable with the process. Given that there has already been one stage of reverse bidding, those bidders should be even more comfortable with the process.

In stage one, the FCC announced June 8 it was moving to three rounds of the forward auction after starting that auction May 31.

But if and when the FCC does go to three rounds, it will be even more important for stations whose bids from the previous stage of the reverse auction have not been unfrozen yet to monitor the action.

The FCC has gone out of its way to remind broadcasters to keep their eyes trained on that "unfreeze" point. "Bidders with stations that begin Stage 2 with the status of 'Frozen – Pending Catch-Up' [stations frozen in the first stage, but only frozen in stage 2 until the point at which they froze in stage 1] must be on their toes, as this status can change from one round to the next and will change by the end of the new stage," they said. "Remember – if a station’s status changes to 'Bidding,' and the bidder fails to submit a bid for that station, the system interprets this as a bid to drop out and could lead to the station exiting the auction."

The FCC also said it would let the public know if it decides to change up the number of rounds per day to speed—or theoretically slow—the auction and will signal when stage two is complete—when either the FCC has all the stations it needs to clear 114 MHz, which can take no more than 52 rounds given that the FCC is starting at a fixed price—whatever a station's winning price was in phase 1—and reducing it by the greater of 1) 5% of the previous round's price or 2) 1% of the original price, in each round.

In stage one of the reverse auction, at a 126 MHz clearing target, the FCC had to pay $86 billion-plus, which proved too rich for those forward auction bidders (they ponied up a little over $20 billion) though the FCC always planned for the possibility—more like probability—of multiple rounds.

Related