The latest pair of 600 MHz incentive auction bidding rounds continued to show strong demand for spectrum licenses covering larger markets
The Federal Communications Commission attracted another $1.7 billion in “winning” bids for the 100 megahertz of 600 MHz spectrum assets up for grabs as part of its ongoing incentive auction proceedings.
The latest activity was through a pair of bidding rounds, which after three total rounds had pushed the auction’s total in net bids to $9.7 billion. That amount is still well short of the roughly $86 billion expected to be needed in order to meet the current financial demand for that spectrum from television broadcasters.
Through three rounds of bidding, 10 licenses for bid centered on New York City remain the priciest, with 33 bids placed at $148.8 million per 10-megahertz spectrum block. With demand for those licenses well above the supply, bidding on those licenses could see prices continue to climb.
In terms of demand outstripping supply, the five licenses centered on Los Angeles available in the auction continued to see 20 bids placed at a price of $110.3 million per license. Interest in the 10 available Chicago-based licenses also remained robust, with 28 bids placed in round three at $54.6 million per block.
Among the larger markets, the 10 license blocks centered on San Francisco witnessed a significant drop off in activity, with just 19 bids placed in round three at $52.4 million per block, which was down from the 29 bids placed in the opening round. However, demand is still outstripping supply, so prices on those licenses should continue to climb.
Similar to recent spectrum auctions, the FCC is only releasing bidding information on markets and not on which bidders have placed those bids. The current auction includes 62 qualified bidders, including the likes of Verizon Wireless, AT&T Mobility, T-Mobile US, U.S. Cellular and C Spire.
The FCC managed to clear a total of 126 megahertz of spectrum from television broadcasters as part of the reverse auction at a clearing target price in excess of $86 billion. Factoring in additional clearing and administrative charges, the bidders will need to post winning bids in excess of $88 billion in order for the current forward auction results to count. That amount came in well above expectations, leading many to note the FCC will likely need to conduct additional bidding stages in order to hit financial levels in line with bidding demand.
The FCC is still on track to hold a pair of bidding rounds per day through the end of this week.
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