FCC Spectrum Auction Stage 3 Set At $40.3B

The FCC spectrum auction that's been active for a few months now is entering what is supposed to be the final phases, and a target for the bidding in stage 3 of the auction has been set. The reverse portion of the auction, when the whole saga began, ended up setting a bidding target of about $86.4 billion, and thus far, the two forward auction stages that have been completed have not come as close to meeting that goal as regulators and spectrum holders would like. Thus, the third portion of the forward auction will need to hit $40.3 billion in order to meet the total target set in the reverse auction.

The first and second stages of the auction both fell short of their targets, earning $23 billion and $21.5 billion respectively. In order to end the auction at this stage, the third round of bidding would have to drum up at least $40.3 billion, which all projections are pointing to as extremely unlikely. At this point, many are saying that the remaining cost left in the auction is above what mobile network operators, the main bidders, are willing to pay. Unfortunately, since spectrum holders already went through a reverse auction to determine a floor for the total auction proceedings, the chances of the spectrum holders relenting on price is quite low. It doesn't help that the amount of available spectrum diminishes with each stage, driving down the value proposition for bidders. This means that a fourth stage of the forward auction will likely have to happen, and even then, the minimum may not be met, resulting in a total failure that would set the auction all the way back to the reverse stage. If the fourth stage fails and the auction goes back to square one, having to lower the prices for their precious spectrum holdings will be a tough pill to swallow for the likes of TV and radio broadcasters, who are mostly being forced by the FCC to give up their spectrum.

The bands on offer fall in the 600MHz range, which is prime territory for mobile LTE networks - the spectrum is known as "low-band", and it can travel far, penetrate buildings, and give very good speeds. While it would take some tweaking to be 5G-ready, the spectrum could prove invaluable to a carrier building out their current network. While two stages of the forward auction have thus far been completed, nobody has technically paid out anything yet, meaning that the auction could very well reset with the only consequence being lost time. Given the fact that the 5G charge is in full swing, of course, this would make the spectrum even less valuable to carriers, who would be less focused on bolstering their LTE offerings at that point. If the spectrum holders refused to relent on pricing, the FCC would have a vicious cycle and regulatory nightmare on their hands, forcing them to favor one side or the other, or give up on the auction altogether.

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Daniel Fuller

Senior Staff Writer
Daniel has been writing for Android Headlines since 2015, and is one of the site's Senior Staff Writers. He's been living the Android life since 2010, and has been interested in technology of all sorts since childhood. His personal, educational and professional backgrounds in computer science, gaming, literature, and music leave him uniquely equipped to handle a wide range of news topics for the site. These include the likes of machine learning, voice assistants, AI technology development, and hot gaming news in the Android world. Contact him at [email protected]
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