FCC issues initial bids for first phase of spectrum auction

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Opening bids released Friday pave the way for the FCC’s upcoming spectrum auction, scheduled to start in March 2016.

The congressionally mandated auction will free up broadcast spectrum for use by wireless providers for the growing number of mobile devices. Television executives must decide whether to relinquish all spectrum and go off the air, sell a portion and channel-share with another station, move from UHF to VHF, or not participate.

Among the larger opening bid prices for public television spectrum are $775 million for New Jersey Public Television and $672 million for WLIW, both operated by WNET in New York City. On the opposite coast, PBS SoCal in suburban Los Angeles was assigned an opening bid of $581 million.

But stations probably won’t see that much cash. “Because the FCC is conducting a reverse auction, all of the figures being reported are maximum initial bids that are expected to fall significantly during the auction process,” PBS noted in talking points sent to stations Oct. 9 and acquired by Current.

A reverse auction means the FCC will first purchase spectrum from stations, then, in a subsequent forward auction, sell the spectrum to wireless providers.

“There’s a pretty large gap between the opening bid prices released today and what the FCC is likely to receive from carriers in the second auction,” said John Lawson, whose Convergence Services consultancy is advising stations on the auction.

The FCC bid list also identified stations in several markets, including Albuquerque, N.M., and Las Vegas, that will not need to sell spectrum to meet demand. As expected, demand is greatest along the East and West coasts.

Starting bids vary depending on whether a station would relinquish all spectrum or move to a low or high VHF signal. Opening bids for channel-sharing will be determined later.

Stations that want to participate must file with the FCC by 6 p.m. Dec. 18, with the auction set to begin March 29, 2016.

“For potential incentive auction participants, today is a watershed moment,” said FCC Chair Tom Wheeler in a statement. “For all practical purposes, we’ve fired the starting gun.”

Wheeler said that bids released today and application procedures issued Thursday provide broadcasters with “all of the information they need” to decide on whether to participate.

In a background call with reporters Friday, a senior FCC official told Current that once the auction begins, stations will receive advance notification of the number of bidding rounds per day.

“We want to start conservatively so stations have time to digest the figures” and become familiar with the bidding process, the official said.

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