FCC Airwaves Auction Fails Again to Draw Enough Bids
December 05 2016 - 3:50PM
Dow Jones News
The U.S. government's massive airwaves auction again failed to
move forward Monday after a single two-hour round of bidding didn't
generate enough demand.
The complex process will now move into its fourth stage with
another cut to the supply of available licenses, and the auction
which kicked off in May likely won't conclude until next year.
This is the third time the FCC hasn't drawn enough interest from
cellphone operators like AT&T Inc., Verizon Communications Inc.
and Comcast Corp. in buying the licenses for airwaves now used by
television broadcasters. FCC officials have said the auction is
designed to run multiple rounds.
The auction aims to free up spectrum for wireless services by
repurposing broadcaster's licenses for cellular use. The airwaves
the government is seeking to free up are ideal for wireless and are
capable of sending signals great distances and penetrating deep
into buildings. With growing smartphone use especially for
data-heavy video watching, the country's biggest wireless operators
need more spectrum to support that traffic.
In the auction process, if demand doesn't exceed supply in the
biggest markets, then the stage will end. In this stage's lone
round of bidding, participants only offered to pay $19.7 billion
for the licenses, below the auction's threshold to continue. The
third stage also ended with a sole round of bidding in October.
The FCC will now go back to television broadcasters for a fourth
time, cutting the number of licenses it will buy from stations
while also likely reducing the price the agency pays for those it
does acquire.
After each failed stage, the FCC had to substantially lower the
amount it is seeking to buy from broadcasters. Last week, the FCC
agreed to spend $40.3 billion to buy station licenses, down from
$54.6 billion in the second round and well below the initial round
of $86.4 billion.
The FCC first tried to draw bids for 100 megahertz of licenses
and has lowered the cleared amount by 10 megahertz each round. It
will now likely be cut to 70 megahertz in the next attempt.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
December 05, 2016 15:35 ET (20:35 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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