Bidding began at 10 AM Tuesday in the reverse phase of the FCC’s history-making incentive auction. During the current phase broadcast industry participants will determine the prices at which they will relinquish their spectrum assets to the wireless industry. Based on initial applications in which broadcasters stated their intention to voluntarily surrender all or part of their licensed channels, the FCC has set an initial spectrum clearing target of 126 MHz for the incentive auction. If fulfilled, that target would provide wireless carriers with access to 100 MHz and leave an additional 26 MHz of “guard band” spectrum to be used by unlicensed Wi-Fi and other devices. One analyst told the press that in order for the reverse phase of the auction to satisfy the 126 MHz target, auction proceeds must reach at least $37 billion, which would equate to 89 cents per MHz/pop for broadcasters and $1.18 per MHz/pop for wireless industry bidders.
Although the identity of the reverse auction participants and their bid prices are being withheld by the FCC, the agency started with a single six-hour round of clock phase bidding on Tuesday and followed with a second four-hour round on Wednesday. Thereafter, the FCC will proceed with a pair of two-hour rounds each day until the reverse auction reaches 52 rounds or the 126 MHz clearing target is met. If the auction fails to reach the 126 MHz target, bidding will recommence at the next-lowest clearing target of 114 MHz, which would result in less spectrum for wireless carriers during the upcoming forward auction and lower proceeds for that event.
The FCC and other experts expressed confidence that the reverse auction phase will wrap up by month’s end to allow the forward auction to begin shortly after the July 4th holiday. If that schedule holds, FCC Chairman Tom Wheeler has signaled that the forward auction—which will go on until all available spectrum or bids are exhausted—could extend into October.