Stage 4 of the FCC’s reverse auction headed into rounds 35-37 on Monday, continuing its chug toward an expected close at the end of this week.
In an announcement on the auction dashboard, the FCC noted the auction is expected to close on Friday, but noted there will be a shakeup in the number of rounds per day before that time. The proceedings, which have been moving at a pace of three one-hour rounds per day, will add an additional round Tuesday, Wednesday, and Thursday for a total of four. Friday will include up to five rounds (rounds 50-54), though the commission noted the base clock price is expected to reach $0 in round 52.
Though the FCC didn’t include a projected start date for the Stage 4 forward auction in its note, history would imply that the gap won’t be that substantial. Back in December, only five days – two of which were over the weekend – elapsed between the close of the reverse auction and the start of forward auction bidding.
The close of the reverse auction will reveal the number forward auction bidders have been waiting for with bated breath: the Stage 4 clearing cost.
Since the auction began, the clearing cost for forward auction participants has dropped from $86.4 billion for 126 MHz of spectrum to $40.3 billion for 108 MHz of airwaves – but those targets have proved handily out of reach for forward auction bidders. Only 84 MHz of spectrum is expected to be up for grabs in Stage 4.
Though broadcasters have been blamed for keeping prices high, FCC Incentive Auction Task Force Senior Advisor Charles Meisch explained the clearing cost is instead a function of the number of station licenses the Commission needs to buy and the price the Commission needs to pay to purchase those stations. More on his explanation can be found here, but the important thing to note is that twice as many UHF channels will become available between Stages 3 and 4 as were freed up between Stages 1 and 2, when there was a 37 percent drop in the clearing cost.
And according to speculation from BITG’s Walter Piecyk back in December, that could mean the Stage 4 clearing cost dips below $25 billion.
Piecyk forecasted a Stage 4 forward auction could close by the end of January, with a potential Stage 5 forward auction wrapping up by mid-March.
Filed Under: Telecommunications (Spectrum)