FCC Sets Procedures and Opening Bids for 700 MHz Auction

The FCC last week outlined filing requirements, minimum opening bids, reserve prices, upfront payments and other procedures for Auctions 73 and 76, covering spectrum above TV channel 51 that will become available when analog TV is shut down in February 2009 in a 122 page Public Notice (DA 07-4171).

A total of 62 MHz of 700 MHz spectrum will be offered in Auction 73. Block C, consisting of 22 MHz of spectrum in the 746-757 MHz and 776-787 MHz bands, has attracted the most interest as it includes 12 regional economic area licenses that could be combined to offer nationwide coverage. It also comes with the requirement that the licensee offer access to devices and applications from other companies, provided they don’t disrupt the network.

The Public Notice describes how the market value of each of the five blocks being auctioned was calculated. In the Aug. 24, 2007 RF Report I described the minimum price the FCC put on each block in terms of cost per 6 MHz, as an indication of what a TV channel might be worth if they could be used for services other than broadcasting. The FCC kept the same minimum opening bids described in that article, with the exception that licenses for rural areas (CMAs 307-734) will have minimum opening bids not greater than $0.10/MHz-pop.

The actual rates are based on results from Auction 66. Refer to the Public Notice for details on these rates. For example, licenses covering geographic areas for which a corresponding Auction 66 license was unsold will have a minimum opening bid of $0.01/MHz-pop. Licenses that don’t cover the Gulf of Mexico and do not cover areas that were offered in Auction 66 will also have a minimum opening bid of $0.01/MHz-pop.

This auction will be key test of how much spectrum in the UHF TV bands is worth. Based on the amount of press the auctions have received, it seems likely the FCC minimum bids will be met and exceeded. While this auction does not directly affect broadcasters, if the spectrum brings in more money than expected it may affect how returned analog spectrum is used. Will the FCC allow two-way services on returned analog channels? What impact would a high value on UHF TV spectrum licenses have on the white space device debate? If white space devices are allowed in the spectrum, it could make unused channels less desirable for other services.

Auction 73 will start Thursday, January 24, 2008. RF Report will have updates on the auction as it progresses.