TV Spectrum Auction Enters Next Stage With New Bidding, Lower Prices

The first stage of the FCC reverse auction of television spectrum concluded as many analysts had predicted: Sellers’ opening bid prices were more than $60 billion higher than what the forward auction buyers were willing to pay.

We believe it’s unlikely that the second stage of the auction will succeed at matching sellers’ prices to buyers’ offers. The reverse auction, which adjusts to lower demand for spectrum by clearing fewer channels at lower prices, might continue into third and fourth stages through next spring.

Based upon a Public Media Company analysis, the total potential compensation for public television spectrum drops from a projected $6.8 billion, which would be generated if the auction were to close in the current Stage 2 clearing level of 114 MHz, to $5.9 billion at a clearing target of 108 MHz. At what we believe would be the worst-case scenario of a final clearing target of 84 MHz, which would be set in Stage 4, total compensation for public TV would be far lower and shared between only a handful of stations. READ MORE ON CURRENT…