Most US TV stations will have to alter their usage of broadcast spectrum, resulting in channel changes, shared tech, and, in some cases, buyouts

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2017.01.18, Wednesday

Incentive Auction to End After Stage 4

[Source: Broadcasting & Cable]

The FCC will be able to close the spectrum auction, and at an 84 MHz spectrum total some had suggested was the last clearing target for a successful auction.

The second round of stage 4 of the forward portion of the FCC incentive auction ended Wednesday afternoon (Jan. 29) with bidders raising their ante to  $18,208,164,08, but more importantly $1.2570 per POP.  The total could still go up, but it is now enough to close the auction once there is no more bidding.

Round one of the forward auction ended at noon Wednesday (http://www.broadcastingcable.com/news/washington/forward-auction-bidders…) with bidders offering $17.7 billion ($17.2 net of bidding credits), which more than covers broadcasters asking price of $10 billion plus the $2 billion or so in auction and repacking costs. But it was still just under three cents short of the $1.25 per MHz pop in the top 40 markets (actually PEAs or “partial economic areas”) that would satisfy the second benchmark and allow the auction to close.

That per-POP price is essentially a minimum price the government will take for the spectrum in top markets in order to get what it considers a fair market price. So, the auction could only close when that fair top market price was met and the broadcaster-plus-costs total was exceeded.

The spectrum auction aint over ’til it’s over, but the final stage rule has now been met, with forward auction bidders having bid enough to both cover the broadcasters’ ask (the second compontent necessary to close the auction), and at a the $1.25 per MHz POP price in the top 40 markets that meets that second component of the so-called final stage rule.

The auction will continue until there is no more bidding in any market.

After the auction closes, the next step will be for the FCC to hold a second, mini, auction among the winning bidders for the exact frequencies they will be getting–they were bidding for generic 10 MHz blocks in the main part of the auction.

It remains to be seen how happy broadcasters are at a payout of some $60 billion less than their first ask. That means a lot fewer payouts since broadcasters are only giving up 84 MHZ of spectrum rather than the initial 126. But winning bidders will still be getting a big

payday, and the less spectrum broadcasters have to move out of, the easier the repack should be and the less chance of interference to either broadcasters or wireless operators.

The auction began May 31.

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