$86.4 Billion Price Tag for Auction

Posted on June 30th, 2016 by

After nearly a month of bidding by TV stations, the FCC’s reverse auction ended on June 29, 2016. The “provisional winners” in the reverse auction will receive a total of $86.4 billion to either go off the air, go to a low VHF channel, or go to a high VHF channel. That figure far exceeds most estimates of what the spectrum would “cost” for bidders in the forward auction.

The forward auction will start in coming days, and over the next several weeks, the FCC is going to find out of the spectrum is worth that much. If not, the FCC will reset to a lower clearing target then conduct stage two of the auction. Stage two will have both a reverse and a forward auction, but on the reverse side, only those stations that were provisional winners at the end of stage one will remain eligible to participate. So stations that never played, opted out after playing for a while, or were told that they were no longer needed, don’t have to worry about taking another joy ride.

This is why the FCC uses the term “provisional winner”. Those with that status after the reverse auction will only become paid up winners at the promised figure if the forward auction generates enough dollars. If not, provisional winners will get to find out in stage two if they remain provisional winners.

How long will the stage one forward auction last? That’s the big question, and there are only guestimates at this point. We believe the reverse auction went faster than the FCC had anticipated, but the amount of time it will take the FCC to bring bidders up to $86.4 billion (or find out they won’t bid that high) in the forward auction is difficult to say given the number of variables in play.

Oh, and don’t forget, the FCC needs to finalize and adopt a repacking plan during all of this auction madness… and decide how and when to let ATSC 3.0 become reality… and figure out their system for reimbursing repacked TV stations post auction. Seems the “busy” meter at the FCC is pegged at the moment. Wouldn’t you agree?