Can the FCC’s spectrum auction conclude successfully?

Recently, the Federal Communications Commission began stage three of its forward spectrum auction, immediately following the close of the second round. There, broadcasters asked for $40 billion to vacate a portion of the electromagnetic spectrum and make it available for mobile wireless services. Since the FCC-managed auction began earlier in 2016, the price tag has been reduced from an original ask of $86 million. As the price dropped, the FCC began to narrow the range of potential spectrum that it would auction in order to maintain some equilibrium between supply (by broadcasters) and demand (by wireless providers). The current round for bidding encompasses 108 megahertz (MHz) of spectrum instead of the original 126Mhz that was originally offered at the higher price tag.

So far, the wireless operators seem to be holding firm in refusing to meet the minimum price that broadcasters have set for selling this currently-used spectrum. They have indicated a willingness to pay $22 billion for the spectrum, or roughly half of the broadcasters’ target. It is highly unlikely that they now will increase their bids for even less spectrum than was offered in earlier bidding rounds.