The forward auction portion of the Incentive Auction got started on Tuesday with more than $10.1 billion bid for the 600 MHz spectrum after three rounds of bidding. The forward auction has a long way to go to raise enough money to cover the total cost of clearing the spectrum set by the reverse auction at $88.4B.
After each round, the FCC will determine if the bids reflect competitive prices and if they will cover the auction costs and the costs to move the broadcasters off the spectrum.
The forward auction must raise enough money to cover broadcaster clearing costs, $207 million to cover the FCC’s costs for conducting the auction, and $1.75 billion for the TV Broadcaster Repacking Fund. In all, $88.4 billion must be bid.
If those target numbers are met, the forward auction will go into its final phase where the spectrum reserve is triggered and bidding rounds continue until winners are declared. But, if the final stage rule is not met during the forward auction of a stage, which is very possible, the Incentive Auction will reset with a lower spectrum target for clearing. Another reverse auction will be held followed by another forward auction.
More than 60 entities are taking part in the Forward Auction, including the Big 4 carriers and several regional, including Pine Belt Cellular, Sagebrush Cellular and Union Telephone Company.
Rural Carriers Ask for a Bidding Break
Almost half of the participants have received the rural service provider bidding credit. The Rural Wireless Association (RWA) and NTCA – The Rural Broadband Association (NTCA) have requested the FCC suspend the bidding from Sept. 7-9 and Sept. 26-28, when both groups will be holding meetings. Alternately, the associations requested that the bidding at least be limited to one round per day during those time periods.
“The associations’ members have limited personnel resources to dedicate to auction participation. In many cases, the leaders that attend industry events to conduct their companies’ business are the same individuals named as their companies’ authorized bidders in Auction 1002,” the NTCA and RWA said in their request.