TV Stations Lower The Threshold For Bids In FCC’s Broadcast Spectrum Auction


Wireless broadband companies and TV stations are coming together in their views about how much broadcasters’ airwave spectrum is worth. But they still have a way to go before reaching agreement based on the second round of bidding that closed today in the FCC’s important spectrum auction.

Stations indicated that they’re willing to accept $54.6 billion for 114 MHz of spectrum, down from $88.4 billion for 126 MHz in the first round in the so-called “reverse” auction that took place in August.

The next round is due to begin on Wednesday.

The new, lower price “is still well beyond striking distance for the budgets of mobile network operators,” says Dan Hays, a principal at PwC’s Strategy&.  “A third stage of the auction, and perhaps even a fourth, is now all but a certainty.”

Still, the complicated process also includes a signal about how much potential buyers — phone companies and possibly others such as Comcast and Dish Network — might be willing to pay. That, Hays adds, seems to vindicate broadcasters “effectively calling the bluff of the wireless industry and demanding that they come to the table ready to pay up.”

Wells Fargo Securities’ Marci Ryvicker considers the results a “positive surprise” for broadcasters. It “debunks the bear case” for TV station owners “which is that the auction will outright fail.”

The process could wrap up by early 2017, and possibly by the end of this year, Morgan Stanley’s Benjamin Swinburne says. He expects bidders to offer as much as $29 billion for 70 MHz of spectrum.

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