Round one of stage four of the forward auction ended at noon on Wednesday with forward auction bidders finally getting off their hands and ponying up $17.7 billion, easily covering the broadcasters' asking price of $10 billion plus another $2 billion for costs, or $12 billion total, but failing to meet the top-40 market price benchmark that would have meant the auction had met the criteria for closing in stage four after bidding in all markets had ended.
Supply exceeded demand in dozens of markets—seven blocks are available in each of the 416 partial economic units. In many markets there was demand for eight blocks and in some cases as many as 17 or 18.
There were six markets in the top 40 where demand exceeded supply, which are the key markets for closing the entire auction, or at least meeting the final stage rule that will allow it to close.
That price benchmark is $1.25 per MHz POP (see the FCC for an explanation of how the price is determined) in the top 40 PEAs (partial economic units). At the $17.2 billion figure, the price is now $1.2239 per POP.
The spectrum auction ain't over 'til it's over, which is when the final stage rule is met, but the fact that forward auction bidders are back bidding again and the number is up to $17.7 billion ($17,749,517,087 to be exact) is definitely progress.
The forward auction will now proceed to a second round, which starts at 2 p.m. That is progress over the previous three stages, when the forward auction bidders did not raise their prices but instead just lowered their demand and the forward auction ended after the first round--a stage ends when demand does not exceed supply in any PEA.
The auction could go on for weeks, or could end quickly depending on the bidding in the top 40 PEAs. Say, if Los Angeles, where there are still two available blocks, suddenly got bids on those two. That could raise the per-POP price to the $1.25 benchmark in one fell swoop.