FCC Airwaves Auction Fails to Draw Enough Bids, Again
20 October 2016 - 7:20AM
Dow Jones News
The latest stage of the U.S. government's massive airwave
auction unexpectedly ended Wednesday after a single round of
bidding, triggering a new stage of the complex process that aims to
free up spectrum for wireless services.
Bidding for the airwave licenses closed Wednesday after two
hours because of lack of demand, according to the Federal
Communications Commission website. This is the second time the FCC
has failed to draw enough interest from cellphone operators like
AT&T Inc., Verizon Communications Inc. and Comcast Corp. in
buying the licenses it agreed to acquire from television
broadcasters.
The FCC has already had to substantially lower the amount it is
seeking to buy from broadcasters after bids in the first round fell
far short. Last week, the FCC said it agreed to spend $54.6 billion
to acquire airwaves from broadcasters, down from its initial round
of $86.4 billion. The FCC will now go back to television
broadcasters for a third time, cutting the number of licenses it
will buy from stations and likely reducing the price it pays for
those it does acquire.
The airwaves the government is seeking to free up are ideal for
wireless use 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 growth.
In the auction process, if demand doesn't exceed supply in the
top markets, then the stage will end. In this stage's first round
of bidding, it failed to cross that threshold ending the bidding
abruptly despite drawing $21.5 billion in offers.
The FCC first tried to draw bids for 100 megahertz of licenses,
then lowered that to 90 megahertz for the latest round. It will now
be cut to 80 megahertz in the next try.
FCC officials have said the auction is designed to run multiple
rounds to match supply with demand. It isn't predicted to close
until later this year or in 2017.
Write to Thomas Gryta at thomas.gryta@wsj.com
(END) Dow Jones Newswires
October 19, 2016 16:05 ET (20:05 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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