Bids in the forward phase of the FCC’s ongoing incentive auction reached a key milestone this week with gross revenues of $16.39 billion, thus satisfying the $15.9 billion mark prescribed by the FCC as the first component of the auction’s final stage rule. The $16.39 billion bid tally was posted at the end of Round 15 on Wednesday. By the end of Round 18 yesterday, total gross bids had reached nearly $18 billion. Under FCC rules, the gross bid benchmark of $15.9 billion corresponds to a broadcast spectrum clearing target of 84 MHz, which would leave 70 MHz available for commercial wireless use. To satisfy the second prong of the final stage rule (i.e., the maximum clearing target of 126 MHz, which would leave 100 MHz available for wireless carriers), the forward auction must generate additional gross revenues to cover the $86.4 billion clearing cost set by broadcasters during the reverse phase of the incentive auction, plus an additional $2 billion in auction-related expenses.
Earlier this week, the FCC sped up the pace of bidding activity with three-per-day rounds. The agency also announced yesterday that it would start raising minimum bid prices by 10% (instead of by 5%) in each round. Since the opening round on August 16, which garnered gross bids of nearly $8.5 billion, the per-round auction bid total has risen by an average of about $560 million. Bidding is expected to continue well into the fall.