Gary Epstein

Feb 10 marks the end of all clock phase bidding in the incentive auction. This is a noteworthy event for winning bidders and an appropriate moment to appreciate the auction’s success in using market forces to allocate spectrum to its highest and best use. With $19.6 billion in forward auction clock phase gross winning bids, the incentive auction will generate the second highest total proceeds of any Commission spectrum license auction in its 20-plus year history.

The public stands to gain substantial economic benefits from mobile broadband utilizing the 84 megahertz of spectrum repurposed by this auction. In addition, the auction will provide more than $6 billion to the US Treasury for deficit reduction, more than $10 billion to broadcasters that chose to relinquish spectrum usage rights, and up to $1.75 billion for other broadcasters that incur costs in changing channels. And, for winning stations that will remain on the air through channel sharing or changing bands, auction proceeds will provide an infusion of capital for them to reinvest in programming and other activities. This is also a good time to lay out in greater detail what lies ahead in the coming months.

On September 13 at 10:00 AM ET bidding resumes in the Incentive Auction with the opening of Stage 2. We wanted to take a moment to preview what happens next and describe how this stage will be different from Stage 1. For Stage 2, the Auction System set the clearing target at 114 megahertz, the next-highest target that meets the Commission’s standards for setting a clearing target in a stage (explained in the Bidding Procedures Public Notice). Compared to the 126 megahertz clearing target, the 114 megahertz clearing target generally clears nine blocks of spectrum in each partial economic area (PEA) instead of 10 blocks and adds two additional channels to the TV band. Adding more channels to the TV band allows more stations to be repacked in their pre-auction band. Thus, some stations that were provisionally winning after Stage 1 will become “unfrozen” in Stage 2 and will be presented decreasing price offers during the bidding rounds. This process will result in lowering the overall costs of clearing spectrum for wireless use.

On Tuesday, August 16th, the Incentive Auction will enter the first stage of forward auction bidding, in which bidders will compete to win new 600 MHz Band licenses for mobile broadband use. Because this is a new auction design, we wanted to give you a preview of how the process will unfold and how the public can keep track as the auction moves through the bidding rounds. First, we will offer a mock auction on August 11th and 12th. Throughout the forward auction, the public will be able to obtain information about the results of bidding on our Public Reporting System (PRS). You can view the upcoming schedule of bidding rounds on the Dashboard of the PRS as well as track progress toward meeting the two prongs of the final stage rule that determines whether the auction will close at the current clearing target. In addition, the Forward Auction section of the PRS will provide a Product Status screen that will offer details on bidding activity for each product. Unlike the reverse auction, in which there is a limited number of possible rounds, forward auction bidding rounds for a stage can continue without limit so long as demand outpaces supply for any product. As such, we cannot predict when the forward auction will conclude. Until it does, we invite you to watch along with us as the forward auction clock phase bidding in the first-ever Incentive Auction gets underway.