TV Auction Stage Four (Sigh)

Posted on December 29th, 2016 by

Yes, it’s true. The Stage Three Forward Auction lasted less than a day, failed to meet the final stage test, and catapulted the TV Incentive Auction to Stage Four. Broadcasters are now participating in the reverse auction portion of Stage Four, which has a clearing target of 84 Mhz – 24 Mhz, or four TV channels, less than the Stage Three clearing target of 108 Mhz.

Reverse auction rounds in Stage Four, which began December 13, 2016, have initially been only one hour each, and the FCC kept a 3-rounds-per-day pace until Friday, December 23rd, when only two rounds were conducted. Bidding was then suspended until January 3, 2017, when the FCC will resume activity with three one-hour stages per day. We’re on round 23 now, and by January 7th, the reverse auction will have completed round 34.

If the FCC keeps that pace, the Stage Four reverse auction will finish sometime during the second or third week of January, with the Stage Four Forward Auction kicking off at the end of January 2017. If the final stage rule is not met, the FCC will reset everything and Stage Five will commence. In its originally announced possible band plans, the next band plan would have a 78 Mhz clearing target, followed by another at 72 Mhz. Which one the FCC chooses is their choice, though thus far, they have only moved to the next possible band plan and clearing target.

Many auction prognosticators previously predicted that supply would meet demand at the 84 Mhz clearing target (where TV would thereafter exist on channels 2-36), though some have recently questioned the likelihood of that occurring given new information that wireless bidders in the forward auction may only be willing to pay $20 billion for the repurposed spectrum.

While the auction trudges along, much is happening behind the scenes, in anticipation of the auction’s end. The FCC has reminded TV stations to confirm that its address information is correct in FCC databases. It has also asked all stations to update their FRN information in the new CORES system, noting that there is a new feature that must be activated for stations to receive auction funds from the FCC. There is even a YouTube webinar on how to navigate the new features. Those funds can come from successful participation in the auction or by way of reimbursement for the expenses of some stations having to change channels during a post-auction repack of the TV spectrum, so all stations should complete the information requested. The final repack rules have not yet been published — we’re waiting for that as well.

Anti-collusion rules remain in effect. Be sure who you’re talking to, and if it is another broadcaster, be very careful to avoid disclosing auction status or bidding strategy. Also be cautious with public statements about your station.