The FCC on Friday released the opening bid prices for the upcoming reverse auction of broadcaster spectrum, giving potential participants the first peek into how much the government is willing to pay for their airwaves.
“For all practical purposes, we’ve fired the starting gun,” FCC Chairman Tom Wheeler said in a statement. “The release of final opening bid prices – combined with the detailed application procedures and other data released yesterday – provides broadcasters with all of the information they need to decide whether to apply to participate in the auction. Commission staff stand ready to educate and assist applicants as they prepare.”
Senior FCC officials said Friday the numbers on the chart represent the official highest figures the government will bid on each chunk of spectrum. Due to the reverse auction’s structure, bids will decrease from the given starting points with each round.
The chart released Friday includes price options for three different broadcaster movement scenarios: moving off-air, moving to low VHF and moving to high VHF, with the highest figures offered for stations to move off the airwaves. The highest price on the chart is for New York’s WCBS-TV to move off-air, for which the government is offering a maximum bid of $900,000. The chart also includes several stations with the designation “not needed,” which officials said means the government can meet its clearing target for open spectrum without having to purchase those particular airwaves.
Officials said the opening bid prices released Friday are final and were set at a level the government deemed sufficient to encourage participation in the proceedings. However, the officials admitted the government has neither requested nor received feedback from broadcasters on the prices released Friday. Broadcasters, they said, had their chance to chime in back when the formula for calculating opening bid prices was opened up for public comment. Officials said the final prices were released now to allow broadcasters the mandated 60 days consideration ahead of the application deadline.
According to the FCC guidelines, broadcasters interested in participating in the auction will have until December 18 to file a non-binding application, with a final participation decision due by the start of the reverse auction on March 29, 2016. Late applications for the reverse auction will not be accepted. Forward auction participants declare their desire to participate within the January 14-28, 2016 application window.
At the start of the reverse auction, senior FCC officials said the number of bidding rounds would remain low to allow broadcasters to acclimate themselves to the process (though there will be training and information sessions prior to its start). The reverse auction is set to be a maximum of 52 rounds.
Once the reverse auction is complete, the government will then take the spectrum acquired in the reverse auction and sell it to telecommunications companies in a forward auction. The auction will end once the profits from the forward auction exceed the government’s spending on broadcaster spectrum in the reverse auction.
Senior FCC officials said Friday they believe the auction may take as little as two to three months, with the auction closing in the second or third quarter of 2016.
READ MORE: Incentive Auction 101: A Spectrum Stampede Survivor’s Guide
Filed Under: Telecommunications (Spectrum)