FCC to Restart Auction at Lower Clearing Target

Round 27 results failed to trigger round 28 August 30, 2016
WASHINGTON —The Federal Communication Commission is restarting the TV spectrum incentive auction at a lower clearing target. The commission threw in the towel on clearing 126 MHz of TV spectrum Tuesday afternoon after 27 rounds of bidding failed to “meet the conditions to trigger an extended round,” according to the FCC’s Public Reporting System. The forward portion of the auction, in which wireless providers bid on surrendered TV channels in 416 geographic “partial economic areas,” commenced Aug. 16 with a revenue goal of more than $88 billion. After 11 days of bidding, the 62 parties vying for the spectrum had committed bids totaling around a quarter of that—$22.45 billion in net proceeds after discounts for rural and small business entities.

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“The incentive auction will continue with Stage 2 at a lower clearing target,” the commission stated without clarifying just what that target might be. The commission designed the auction with multiple band plans based on 11 possible clearing targets, with 126 MHz being the original goal at the outset of the auction. The next lowest clearing target would be 114 MHz, with the TV band ending in Ch. 31, but the commission could feasibly drop it further.

The commission said it would release a public notice detailing the clearing target and the start date of Stage 2, when participating broadcasters will once again provisionally sell their spectrum in a reverse auction. The State 1 reverse auction resulted in aggregate sales of $86 billion, which the forward auction had to cover in addition to funding a $1.75 billion broadcaster relocation fund and the administrative costs of holding the auction—around $88 billion.

The commission said Stage 1 results would remain posted until Thursday, Sept. 1, 5 p.m. ET. Bidders who wish to download their results files will have to do so before then. Forward auction bidders who remained eligible after the last round of Stage 1 will have access to the auction system for Stage 2, the commission said. Impairment data will be available to these bidders shortly before Stage 2 of the reverse auction begins, the commission said.

Forward auction bidders also were reminded that they remain subject to the commission’s quiet period rules “prohibiting certain communications in connection with commission auctions until either the completion of the incentive auction as announced by the commission by public notice, with respect to communications with broadcasters, or until the deadline for a down payment of winning bids, with respect to other forward auction applicants and related parties. All applicants remain subject to the prohibition regardless of developments during the auction process, regardless of whether they qualified to bid or remain eligible to bid in the forward auction.”

For more, see our Spectrum Auction silo.

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