Yesterday, the broadcast industry ended the second stage of the reverse phase of the incentive auction, setting a new clearing cost of $54.6 billion. Wireless carriers must reach that target to gain access to the revised net allotment of 114 MHz of spectrum that will be on the block during the upcoming second stage of the auction’s forward phase. FCC officials confirmed that the second stage of the forward auction will begin on Wednesday, October 19. The new clearing cost represents a significant reduction from the $88.4 billion which had been set in June for wireless industry access to 126 MHz of surrendered broadcast spectrum in the 600 MHz band. Total bids in the initial stage of the forward auction, which ended in August, did not exceed $23 billion. Because a portion of the revised 114 MHz allotment will be reserved for guard bands and unlicensed users, the 99 eligible bidders in the forward auction will compete for a net allotment of 90 MHz.
Despite the significantly reduced clearing cost, at least one analyst predicted yesterday that additional incentive auction stages will take place beyond the second round before wireless carriers meet the price requirements of the broadcast industry. Maintaining that the auction “is going exactly as planned,” however, Preston Padden, the executive director of the Expanding Opportunities for Broadcasters Coalition, emphasized that the incentive auction “was not designed for speed but rather to find the equilibrium point between spectrum sellers and buyers.” Executives connected to the wireless industry and the National Association of Broadcasters declined comment.