FCC Sets Starting Bids for Stations in Reverse Incentive Auction

The FCC has released a list of opening bid prices for thousands of TV stations as it prepares for a voluntary spectrum auction next year to free up airwaves for wireless use.

“For potential Incentive Auction participants, today is a watershed moment”, said FCC Chairman Tom Wheeler in a statement. The FCC will hold a “reverse auction” with broadcasters to see what price they would demand for their spectrum rights. That will be followed by the forward auction of the recovered spectrum to wireless carriers, they said. Due to the reverse auction’s structure, bids will decrease from the given starting points with each round. They are given the option to move entirely off the air, which would command a high price.

The USA set a $608 million opening bid for Twenty-First Century Fox Inc.to move WWOR-TV in New York to different airwaves to make room for smartphones, regulators said Friday.

Speaking in a briefing with reporters, a senior FCC official said the commission has not yet received any concrete feedback on the final opening bid prices for broadcasters. Since Sprint (NYSE: S) has decided not to participate, it appears T-Mobile USA (NYSE:TMUS) will be the only Tier 1 carrier that can bid on reserve-eligible spectrum in the top five largest U.S. markets. However, the officials admitted the government has neither requested nor received feedback from broadcasters on the prices released Friday.

The commission had provided estimated opening prices in a Greenhill II report back in February, but this is the real thing. Applications will not constitute a binding commitment, but after December 18, no other station will be able to apply to participate in the auction. Carriers wishing to participate in the forward auction can show their interest between the 14 January to the 28 January. Once everything is set by March 29 it will take the FCC a few weeks to set the initial clearing target for how much broadcast spectrum it is going to receive and the band plan. The greater Columbus community benefits daily from the art and science programming that WOSU so adeptly offers while Ohio State students, faculty and staff frequently take part in programming opportunities. The auction, which is described as an “incentive auction”, is reliant on a number of broadcasters selling spectrum to the carriers, but there is an additional layer of complexity as the broadcasters still require spectrum. The entire process should be wrapped by the late second or early third quarter of the year, they said.

Most of those bids will drop, but broadcasters at least now know the most they could possibly get for their spectrum.