US spectrum auction falls short by, oh, you know, $66bn thanks to tightwad mobile giants

Back to the drawing board for TV airwave sell-off

The US Federal Communications Commission (FCC) will have to change its plans for the 600MHz radio spectrum auction for mobile broadband – after the latest stage of bidding raised just $22.4bn of an $88bn goal.

"Bidding in the forward auction has concluded for Stage 1 without meeting the final stage rule and without meeting the conditions to trigger an extended round," the FCC said.

"The incentive auction will continue with Stage 2 at a lower clearing target."

The 600MHz auction will see US television networks sell their radio spectrum rights in various US metro areas to mobile carriers, who will repurpose the space to improve wireless broadband networks.

The auction, which has been years in the making, has been pitched by the FCC as a way to gain valuable new spectrum and boost mobile internet speeds across America.

That the FCC did not hit its target clearing price for the spectrum bids is hardly a surprise, as many pundits speculated that the commission was being highly optimistic in setting the initial $88bn mark.

The broadcasters who were convinced to put their airwave holdings up for sale with the promise of a big payoff are less than thrilled with the initial cash pile. Says the National Association of Broadcasters (NAB):

NAB is surprised by the modest participation by wireless carriers in the first stage of the TV auction. Perhaps the notion of a ‘spectrum crisis’ peddled in Washington for the last seven years is not as acute as policymakers were led to believe. We look forward to the second round of the auction, where wireless carriers will be afforded another bidding opportunity.

The next round will begin on September 13 with the FCC setting a to-be-determined lower clearing price for purchasers to meet. ®