Wireless Companies Won't Bid Up TV Spectrum

Stage three of the forward portion of the Federal Communications Commission's spectrum auction began and ended Dec 5 when forward auction bidders again refused to up their prices for reclaimed broadcast spectrum. In fact, the total after stage three was lower—$19,676,240,520—because the FCC reduced the amount of spectrum and the bidders simply reduced their demand along with it. That means the FCC will lower its spectrum-clearing target and proceed to stage four of the reverse auction.

The FCC said that stage four of the reverse auction will likely start Dec 13. It will provide details on Dec 9, including what the new clearing target will be. Stage three of the reverse auction ended last week with the broadcasters' new asking price now $40,313,164,425 for 108 MHz of spectrum (the "clearing target"). In stage two, the price was $55 billion for 114 MHz, but forward auction bidders, who had only ponied up $22 billion in stage one toward an opening price of $86 billion for 126 MHz, did not budge, simply reducing their demand rather than up the price. They did the same Dec 5, signaling broadcasters will have to drop their prices yet again, and wireless companies will get access to even less spectrum, in stage four. The FCC has nine different spectrum targets. Stage three of the reverse auction launched Nov. 1 at a 108 MHz clearing target. The next target is 84 MHz, which some see as the potential equilibrium point between broadcasters' asks and forward bidders' offers, perhaps around a $30 billion number.