Spectrum Auction: Round 21 Edges Up

FCC preps to start raising the bid prices more sharply next week
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In round 21, as of 5 p.m. Friday, Aug. 26, of the FCC's forward portion of the spectrum incentive auction, the total finished off the week at $20,568,397,000, which translates to a net $19.890 billion afer discounts and bidding credits.

That is up from the $20,058,375,000 total and $19.4 billion net in round 20.

That net figure is the one to watch. That figure must ultimately equal or surpass $88,379,558,704 to cover broadcasters payments and moving expenses and auction expenses if the auction is to close after stage 1, in which 126 MHz is being auctioned in 416 geographic license parcels to 62 qualified bidders, including Comcast, AT&T, Dish and T-Mobile.

The FCC raises the price for the spectrum blocks up for bid by 5% each round, but is upping that to 10% per round on Monday (Aug. 29) to speed the bidding. The FCC is setting a new price each round, which is the highest bid it is entertaining in each round. In the top markets, with the most demand, that FCC price is the bid price. In markets with less demand, the bids can be and are lower.

If the FCC does not raise enough to cover the $88-plus billion figure, it will move to stage 2 of the auction, where it will lower the spectrum clearing target from 126 MHz to 114 MHz, continue the reverse auction at that lower figure--winnowing out some of the broadcasters that would have been paid at the higher spectrum-clearing total--then try to cover that new figure in a new forward auction.

The FCC has nine possible spectrum clearing targets down to a low of 42.

The FCC announced late Friday the Labor Day weekend scheule. Bidding will end at 2 p.m. on Friday, Sept. 2, with only two rounds that day (10-11 a.m. and 1-2 p.m.)--and resume at 10 a.m. on Tuesday, Sept. 6, with its three-round schedule.

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