The FCC last week announced that Stage 3 of the reverse auction portion of the FCC Incentive Auction is now complete, and the amount necessary to be paid to TV stations to vacate the required spectrum in this stage is $40,313,164,425.  This represents a drop from the $54,586,032,836 clearing cost that resulted from Stage 2 reverse auction bidding.  In order for the auction to close, and the TV stations who had “provisionally winning bids” in this stage of the reverse auction to get the amounts that they bid, the forward auction will have to raise this sum, plus the $1.75 billion for the costs of repacking other TV stations plus the amounts necessary to cover the FCC’s auction costs.  That means that the forward auction would need to raise about $42.3 billion to avoid Stage 4 of the auction.  If we had to go to Stage 4, the FCC would further reduce the amount of the TV band that they would try to reclaim to repurpose for wireless uses.  The forward auction is scheduled to commence on Monday, December 5 and we will see if it is successful in meeting the closing price – and we may know quickly if this round goes anything like the short forward auction during Stage 2.

While all of this is going on, the rules on prohibited communications (about which we wrote here), remain in effect.  Thus, TV stations that filed initial applications to participate in the auction remain prohibited from communicating any information about their auction participation – even information that they have already dropped out of the bidding or that the FCC has told them that their stations will not be needed in the reverse auction.