AWS-3 Auction: Now $43.8 Billion

Posted by Sam Churchill on

The FCC’s AWS-3 spectrum auction has now racked up provisional winning bids now topping $43.8 billion. There are also signs that the auction will end shortly, reports Fierce Wireless. The auction for 65 MHz of spectrum, some of which would be shared by incumbant users, started Nov. 13.

At the close of round 94 today, the total provisional winning bid amount came in at $43.814 billion. The auction will continue until there are no new bids or waivers in a given round.

The auction has already quadrupled its reserve price and tripled some pre-auction estimates. According to analysts at Jefferies, after 91 rounds, the paired spectrum in the AWS-3 auction was at $2.65 per MHz-POP and unpaired spectrum at 50 cents per MHz-POP.

Proceeds will pay for FirstNet, the interoperable first responder network as well as for deficit reduction.

The success of the AWS auction bodes well for Treasury, and the big broadcast TV auction next year (FCC NPRM). That auction will put some 120 MHz of UHF TV channels (near Channels 30-50) on the auction block. The FCC more recently indicated it was planning on selling only 84 MHz. TV group owners (who never really “owned” the spectrum in the first place), will get a piece of the action for selling their slot and moving their channel to UHF Channel 29 or below.

The FCC proposed this month that the TV auction would meet an average price per MHz-POP benchmark of $1.25 for “Category 1 licenses” in the 40 largest license areas by population, with about 84 MHz of spectrum being cleared in the auction.

The FCC earlier assumed 100 MHZ of spectrum would sell at about $1.50 per megahertz POP with a forward auction revenue of $45 billion. That figure now looks overly conservative. The TV auction could have nearly twice the amount of paired spectrum as the current AWS auction (100 MHz vs 50 MHz) and generate twice the Mhz/Pop.

The MHz/pop figure is derived by multiplying the number of megahertz associated with a license by the population of the license’s coverage area. For nation-wide coverage you’d multiply times 300 million Americans.

Will next year’s TV auction generate in excess of $100 billion? Perhaps. But somebody’s going to have to pay for it.

Posted by Sam Churchill on Monday, December 15th, 2014 at 11:38 am .

Leave a Reply