FCC: Auction Stage 2 Starts Sept. 13, Targets 114 MHz

Only provisional winners can participate in reverse auction August 31, 2016
WASHINGTON—Stage 2 of the TV spectrum incentive auction will commence Sept. 13 with a clearing target of 114 MHz, the Federal Communications Commission said Wednesday morning in a Public Notice. Stage 1 of the auction concluded Tuesday after 27 rounds of bidding stalled at around $22.45 billion, well short of the $88 billion needed to close the auction at a clearing target of 126 MHz.

The action will begin again Tuesday, Sept. 13 at 10 a.m. ET with broadcasters tentatively selling their spectrum in another reverse auction. Participation in Stage 2 will be limited to those broadcasters with one or more stations reaching the status of “frozen—provisionally winning.” Broadcasters who dropped out in Stage 1, either voluntarily or because they were not needed, ” will not be eligible to participate in Stage 2, the commission said:

“Once a station has exited the auction, either in the previous stage or during any round in the current stage, the station will no longer be offered prices nor be allowed to place bids in the reverse auction... At the beginning of a new stage, the auction system will re-evaluate the bidding status of each station that was ‘frozen – provisionally winning’ in the prior stage of the reverse auction in light of the reduced clearing target. If a station did not exit the auction in the previous stage and the auction system determines it is needed in Stage 2, the station’s initial option in the new stage will be identical to that station’s currently held option at the end of the previous stage.”

That is, bidding will restart at the frozen—provisionally winning price. A Stage 2 bidding procedures tutorial will be made available online Thursday, Sept. 1. “We strongly recommend that all reverse auction bidders review the new tutorial,” the PN stated.

The FCC said its auction system set a 114 MHz clearing target for Stage 2. “Under the band plan associated with this spectrum clearing target,” it said, “90 megahertz, or nine paired blocks, of licensed spectrum will be offered in the forward auction on a near-nationwide basis,” versus 10 paired blocks in Stage 1. The remaining unpaired spectrum will serve as buffer zones between up- and downlink wireless services, and between wireless and broadcast licensees. The 114 MHz band plan tops the TV band out at Channel 31.

These nine paired blocks will again be divided according by the 416 partial economic areas by which wireless licenses are geographically defined. The 114 MHz clearing target band plan yields 3,693 individual blocks of spectrum for auction versus 4,048 under the 126 MHz clearing target. Of those 3,693, all but five are considered Category 1, which means there will be zero to 15 percent “impairment” associated with them. “Impairment” here refers to interference from broadcast operations. Of the 3,688 Category 1 blocks, the commission said 99.8 percent were “zero impaired.” The other five PEA-level blocks of spectrum that will be auctioned are considered Category 2, or impaired between 15 and 50 percent.

The commission said 51 blocks of spectrum will not be offered in Stage 2 because they will be impaired beyond 50 percent.

The base clock price will “reset to $900 per unit of volume for Stage 2 of the reverse auction,” the commission said. “The price decrement for round 1 of Stage 2 of the reverse auction will be 5 percent of the reset base clock price.”

Bidding in the clock phase of Stage 2 forward auction bidding will commence on the next business day after the close of bidding in the reverse auction.


For more, see our Spectrum Auction silo.

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