FCC Likely To Get Enough Spectrum Auction Bids From AT&T, Others To Clear Its First Benchmark

The Federal Communications Commission’s 600 MHz incentive auction has entered its 13th round of bidding. So far, the Commission has managed to bring in more than $15 billion and is getting close to one of the two benchmarks established to close the auction.

While the FCC expects to meet the $15.9 billion figure later on Wednesday, it's still substantially far from the second benchmark of $88.37 billion. In fact, FCC Chairman Tom Wheeler said the institution might need to conduct reverse auction stages (as it has in the past) if the forward auction bidding does not reach the second benchmark.

“Until the forward bidding concludes, we will not know whether the demand meets the large supply offered by broadcasters. Depending upon that response, it’s possible that we would need to move to additional stages to find the level where demand meets supply. The commission intentionally designed the auction to account for the possibility that supply and demand might not match at the initial clearing target. It’s something we planned for, and we’re fully prepared to implement if the need arises,” Wheeler explicated.

Right now, the offering comprises various blocks of spectrum, spread across 428 partial economic areas. Each block contains 10 megahertz of spectrum, for a total of 600 megahertz.

Wireless 20/20 analyst Berge Ayvazian added, “The FCC will need to attract big bucks and several new bidders if the 600 MHz forward auction is going to be completed before the end of 2016… Carrier war chests have been stretched in recent years and together AT&T Inc. T, T-Mobile US Inc TMUS and Verizon Communications Inc. VZ may bid as much as $30 billion. So it may be up to newcomers such as Comcast Corporation CMCSA to reach the clearing cost of more than $86 billion, and a second stage of the reverse auction may be needed later this year."