With the FCC 600 MHz incentive auction stage one abruptly hitting the skids, Wireless 20/20 provides some insight into what comes next
The Federal Communications Commission’s 600 MHz incentive auction proceedings came to an unexpected halt this week as forward-bidding activity dropped below the level needed to continue the proceedings.
The auction did manage to hit more than $23 billion in total “winning” bids, but at a slowing pace of less than $1 billion in new winning bids per round was not expected to come near the more than $88 billion in total auction proceeds to pay television broadcasters the $86 billion they wanted for the spectrum assets being offered up or the fees needed to clear and repackage license holders.
Just prior to the stoppage of stage one forward bidding, we spoke with Berge Ayvazian, senior analyst at Wireless 20/20, to discuss the proceedings. As part of the discussion, Ayvazian noted the significant disparity between total forward auction bids and the amount of money television broadcasters were seeking in terms of financial compensation for spectrum.
Ayvazian said it might take some significant politicking by FCC Chairman Tom Wheeler to reset the bar in terms of what broadcasters should expect in terms of auction proceeds in order to get the auction back on track towards a more likely conclusion. Further complicating the issue is the auction’s next move towards its stage two process, which will lower the amount of spectrum targeted to be made available to the mobile telecom space, which in turn would need to move in unison with a much lower amount of total proceeds expected by broadcasters.
Tangentially, Ayvazian explained ongoing work by the FCC and mobile operators in targeting higher spectrum bands to support “5G” services could also further depress potential bidding for low-band spectrum.
Make sure to check us out again next week when we are scheduled to speak with Guenther Ottendorfer, COO of technology at Sprint, to discuss the carrier’s recent three-channel carrier aggregation roll out in Chicago.
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