Total ‘winning’ bids top $12B through nine rounds of bidding in FCC 600 MHz incentive auction, with pace set to increase
Another day, another billion dollars in the bank for the Federal Communications Commission as part of its ongoing 600 MHz incentive auction proceedings, which through round nine had accumulated more than $12.6 billion in total “winning” bids, and just over $12 billion in net bids.
Bidding activity is set to have its first shake-up since early in the proceedings as beginning today the FCC will move from a pair of two-hour bidding rounds to a trio of one-hour rounds until further notice. The auction’s first day of bidding included just a single six-hour round that managed to attract more than $8 billion.
For most of the larger markets up for bid, bidding demand continues to outstrip supply, which in turn will continue to drive up the cost of each license. Bidding activity in the auction should come to a close once the number of bidders for available licenses matches the supply of licenses. The FCC is offering up various blocks of spectrum across 428 partial economic areas, with each block containing 10 megahertz of spectrum.
Following round nine, licenses centered on New York City, Los Angeles and Chicago each had more than double the amount of bids for licenses than licenses available. However, some markets, Honolulu, and Syracuse and Rochester, New York, had fewer bids for licenses than licenses available. Of course, bidders also could be parking bidding eligibility in other markets that can be used on those markets at some point in the future.
Of course, current bidding activity could become pointless if winning bids fail to meet the $88.4 billion in net proceeds needed to both reimburse television broadcasters for the spectrum and pay for the cost to move those broadcasters to different channels. The FCC itself has admitted it might not be able to hit that target in the auction’s current plan to free up to 100 megahertz of spectrum for the mobile telecom space, which could result in a second stage of bidding involving a lesser amount of total spectrum.
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 has 62 qualified bidders, including the likes of Verizon Wireless, AT&T Mobility, T-Mobile US, U.S. Cellular and C Spire.
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