After multiple delays and a lot of wrangling between broadcasters and regulators, the FCC’s 600 MHz incentive auction finally kicked off Tuesday night.
At 6 p.m. ET, the window closed for participating broadcasters to make their initial bids in the reverse auction, wherein the the FCC will price out the available spectrum in a reverse bidding process to see how much broadcasters are demanding for their swaths of spectrum. Prices will start high and will decrease round by round.
A list of participating broadcasters was not immediately available.
The Congressional Budget Office (CBO) estimates net proceeds from the auction will hit $25 billion, which is the middle of its $10 billion to $40 billion proceed range for the auctions.
The CBO anticipates anywhere from 20 MHz to 100 MHz of spectrum being cleared for the incentive auctions.
The proceed range reflects that the portion of auction proceeds paid to broadcasters might range from 25 percent to 75 percent. The CBO also based its estimates on the prices paid in the AWS-3 auction, which sold licenses covering 65 MHz of nationwide spectrum for nearly $42 billion.
The auction was delayed multiple times. In 2014, FCC Chairman Tom Wheeler pushed back the auction to mid-2015 from their anticipated 2014 start date. The reason at the time was to provide more time for policy decisions, developing auction procedures and testing the auction software.
In a statement released Tuesday, Wheeler said the auction would free up more capacity to meet Americans’ skyrocketing demand for wireless data while also preserving broadcast TV services.
“As we get on with the business of conducting the auction, I would be remiss if I didn’t acknowledge the many people whose leadership helped get it off the ground. Thanks to Congress, which had the foresight to authorize this auction,” Wheeler said in the statement. “Thanks to my predecessors and colleagues here at the Commission for their thoughtful deliberation on all of the key decisions made during the last four years. And my sincere thanks to the men and women of our world-class Incentive Auction team – today is a testament to the great work they do every day in service to the American people.”\
In a blog on the National Association of Broadcaster’s (NAB) website, Rick Kaplan, the NAP’s executive vice president of strategic planning, said that a successful auction would mean “a huge amount of money will change hands and technology and spectrum policy will be shaped for the future.”
Kaplan credited the current FCC staff with its work on the auction, as well as former FCC Chairman Julius Genachowski who Kaplan credited with first presenting the incentive auction concept as part of the National Broadband Plan, to Wheeler.
Kaplan noted that “not every solution can be elegant and there remains disagreement about whether each one will prove successful, but the FCC staff is now able to push the “start” button and the initial spectrum clearing target will be revealed.”
He also admitted to the uncertainties inherent in the process.
“What happens next is anyone’s guess, but the FCC staff can certainly be proud that they worked incredibly hard under tight timelines to bring us to the doorstep of this exciting auction,” Kaplan wrote.
The FCC estimates that its initial clearing target and a band plan will be announced within the next three to four weeks. A specific date for bidding in the forward auction will be provided to each applicant that is qualified to bid by a confidential status letter after the initial clearing target is announced.
Filed Under: Industry regulations