Late yesterday, the FCC confirmed prospects for a conclusion of the 600 MHz incentive auction during Stage Four, after wireless industry participants in the auction’s forward phase posted total gross bids of $18.2 billion, which would cover both the broadcast industry’s most recent asking price of $10 billion and the FCC’s final stage target of $1.25 per MHz/pop. Stage Four of the incentive auction began last month as broadcasters reopened the “reverse” phase to set a new spectrum clearing price that wireless carriers would be required to pay to access a gross spectrum allotment of 84 MHz (or 70 MHz net). The reverse phase of Stage Four ended last Friday after 53 rounds, during which broadcasters surprised experts in setting a new clearing target of just $10 billion, which represents a 75% reduction off of the Stage Three reverse phase target of $40.3 billion. Like Stage Two, Stage Three of the forward auction—which had provided wireless carriers with access to a gross spectrum allotment of 108 MHz (80 MHz net)—ended after a single round of bidding which failed to meet the broadcast industry’s clearing target or the final stage rule.
However, events of the Stage Four forward auction, which began Wednesday with two daily rounds, proved vastly different, with bidders satisfying the $10 billion clearing target plus an additional $2 billion in auction and repacking expenses through gross bids of $17.7 billion during the first round. By the end of bidding activity late yesterday, forward auction participants had also met the auction’s final stage rule with total bids of nearly $18.3 billion, which also surpassed the FCC’s target of $1.25 per MHz/pop in the top 40 markets. Although both elements of the FCC’s final stage rule have been met, activity in the forward auction will continue at a rate of two rounds each weekday (with the exception of Inauguration Day, which is a federal holiday) until no new bids are posted.