On Tuesday, the FCC kicked off the fourth stage of the reverse auction with shorter daily rounds which the agency hopes will inject new energy into the incentive auction process. As stated in a public notice issued last Friday, the FCC will conduct two daily rounds of reverse auction bidding between December 13 and December 18, with each round to close after one hour instead of two as per previous practice. Effective December 19, the FCC will boost the number of daily rounds to three. During Stage Four of the reverse auction, broadcasters will set a new clearing cost for their surrendered spectrum assets in the 600 MHz band, and the wireless industry must meet or exceed that price to conclude the incentive auction process and to avoid implementing additional auction stages with reduced spectrum availability. At the end of Stage Three, total bids offered by wireless carriers did not reach the $40.3 billion price tag set by broadcasters for a gross spectrum allotment of 108 MHz (80 MHz net). The gross spectrum clearing target for Stage Four is 84 MHz, which leaves a net allotment of 70 MHz for wireless industry participants in the forward auction.
Owing to progressive reductions in spectrum availability at each stage of the incentive auction, spectrum offered for sale during Stage Four will be completely unimpaired for the first time, and no broadcast stations will have to be relocated to the wireless spectrum bands, guard bands or the duplex gap which forms the buffer between wireless uplink and downlink channels. Analysts believe the absence of impaired spectrum at this stage could spur more aggressive bidding during the forward auction as the potential for post-auction interference has been significantly reduced. Activity in the reverse auction will be suspended between December 23 and January 2, ensuring that the incentive auction process which began in March will continue into the early months of 2017.