Yesterday’s close to Stage 1 of the 600 MHz Incentive Auction offers a good opportunity for a refresher on how the world’s first ever two-sided spectrum auction will work and why it is being watched around the world. We are confident that the incentive auction will be an effective and efficient means to reallocate spectrum, and we were encouraged to see that the first round of this multi-stage auction has already generated the second-highest bidding total in FCC history.
The FCC has been transparent from Day 1 that the auction was designed for multiple stages, and outlined detailed procedures for how “additional stages will be run.
” It was widely anticipated, if not fully expected, that the auction would not close after the first round. In terms of next steps, the FCC will soon begin Stage 2, where it will reduce its clearing target, i.e., the amount of broadcast spectrum it seeks to repurpose, from 126 MHz to 114 MHz. Broadcaster bidding will resume in the reverse auction. Once the Stage 2 reverse auction ends, forward auction bidding on the new mobile broadband spectrum will pick up where it left off today, at the lower clearing target. This is how the Incentive Auction was designed to work.
As we turn the page on Stage 1, it is notable that forward auction bidders have already produced the second-highest bidding total in FCC auction history, totaling $23.1 billion. This means that only the AWS-3 auction generated higher revenues in the 20-plus year history of FCC auctions. This is already bigger than the last low-band auction of 700 MHz ($18.96 billion) that was heralded at the time by the FCC as a “history-making auction.”
As the FCC moves forward and Stage 2 begins, CTIA remains excited about this first-of-its-kind framework that allows the market to determine the best use of spectrum. Once the Incentive Auction is complete – whenever that occurs – this effort will free up much-needed spectrum for the nation’s engine of growth: the wireless economy. But the ultimate winners will be American consumers and businesses who have embraced the wireless revolution.