On Friday, the FCC released a new report by the investment bankers advising them on the incentive auction, Greenhill and Company. This report summarizes proposed auction procedures, but also sets out, on a market-by-market basis, the expected opening bids to be offered to TV broadcasters for the surrender of their spectrum so that the spectrum can be repurposed for wireless broadband use. And these numbers are high – seemingly meant to attract broadcasters to consider possible participation in the auction process. The opening numbers suggested by this report range from a high offer of $870 million in New York City, to a couple of million even in the smallest TV markets.
While this report, and the table of expected opening offers that is part of that report, are in a format similar very to the Greenhill report that was released several months ago (about which we wrote here), those two reports actually represent two very different numbers. The report released in the Fall set out prices that stations willing to surrender their frequencies might be expected to actually receive in an incentive auction. The numbers in this report are merely the opening offers that will be made to stations to surrender their spectrum. If these numbers attract more broadcasters willing to surrender their spectrum than the FCC needs to meet their spectrum-clearing targets (as they quite well may given the numbers being proposed), then the Commission will lower the offer in subsequent rounds of the auction, and the FCC will continue to lower the bids until they receive willing sellers of just the right amount of spectrum necessary to clear the FCC’s targets (which are yet to be set) for spectrum to be resold to wireless users.
Continue Reading FCC Releases Tentative Amounts for Opening Offers to TV Stations to Surrender their Spectrum in the Incentive Auction – and the Numbers Are High