Here Are The FCC’s Incentive Auction Results

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In an afternoon press briefing held Thursday (4/13), the final results of the FCC’s first-of-its-kind incentive auction were officially shared with the public.


Incentive Auction Task Force Chair Gary Epstein, Deputy Chair Jean L. Kiddoo, and Senior Advisor Charlie Meisch discussed some of the highlights — and details — of “Auction 1000,” a.k.a. the Broadcast Incentive Auction.

Among the key takeaways: T-Mobile is the big winner in the Forward Auction, investing $8 billion for 1,500 blocks in 414 Partial Economic Areas (PEAs).

The No. 2 investor in spectrum? It’s not Comcast, which paid $1.7 billion to gain spectrum. Rather, it’s a entity associated with DISH Network head Charlie Ergen, ParkerB.com Wireless LLC, which invested $6.2 billion for 416 blocks in 416 PEAs.

What about other wireless services companies, who prior to the spectrum auction argued that there was a “crisis” — spurring excitement among television broadcasters that a big financial windfall would transpire?

They didn’t seem as eager as initially anticipated, resulting in what some in the TV industry consider a “disappointing” finish for the incentive auction.

AT&T bid $910 million for spectrum. However, it bought spectrum in both New York and Los Angeles, at $135 million for each spectrum slice. This shows that AT&T indeed needed spectrum in the biggest of markets.

But, as the Forward Auction proved, demand wasn’t so hot in other markets, while the ballooning bid levels in the biggest of markets may have cooled some participants from additional bidding.

U.S. Cellular was also noted as a key bidder by the senior FCC staffers. Indeed, $135 million was invested in a chunk of spectrum in New York. But, that was it for the carrier in the biggest of markets. It’s total investment was $328 million, with 188 licenses coming in largely rural areas — a key focus for U.S. Cellular.

What about Verizon? It did not bid for broadcast spectrum after a small upfront payment, the senior FCC staffers note.

Pressed by a reporter for the FCC’s take on the auction’s results, which were deemed as disappointing, Meisch said, “We are neither thrilled or disappointed or anywhere in between. This is how the auction worked.”

Meanwhile, Trinity Broadcasting Network is the big winner in the Reverse Auction, as its WWTO-35 in Chicago, the market’s TBN affiliate, received the biggest single-station award for giving up its spectrum.

TBN is getting $304 million for giving up its UHF home.

The spectrum auction was also beneficial for New Jersey Public Broadcasting, which received $193.9 million for one of its two stations in the auction—a 200kw facility at WNJN-50 in Montclair, N.J. This is the largest dollar amount seen for a NCE TV station.

HOW MANY STATIONS ARE CASHING IN?

In all, 175 TV stations that elected to participate in the incentive auction will be “going off-air.” However, the FCC makes it clear that some of these stations may be engaged in a channel-sharing arrangement and will not be signing off as part of the forthcoming “repack” process. Others will move to a lower channel.

Channel-sharing agreements with non-winning stations are by far the most popular option: Some 133 stations are giving up their licenses and have stated that they will remain on the air through such deals. Just 30 stations will receive money for agreeing to move to a lower channel.

The 175 incentive auction participants will see more than $10 billion from the wireless companies that bid on spectrum.

At $19.8 billion in gross revenue for 70MHz of spectrum, “Auction 1000,” a.k.a. the Broadcast Incentive Auction, is among the highest grossing auctions ever conducted by the FCC.

The Commission now commences a 39-month transition period to move broadcast stations to new channel assignments.

‘WORK IS FAR FROM OVER’
In response to the announcement by the FCC of the results of the broadcast spectrum incentive auction, NAB President/CEO Gordon Smith congratulated the Commission and its staff on bringing the TV auction to a successful conclusion.

But, he said, “While today marks a major milestone, the work is far from over. Now the FCC and the broadcast industry face the unprecedented task of moving almost a thousand TV stations — far more than originally anticipated — to new channels in very tight time frames.”

The NAB also remains concerned about the impact of the auction on hundreds of radio stations co-located on television towers.

“We look forward to working with the FCC and Congress to develop a balanced approach to repacking that is fair to all stakeholders, most importantly our tens of millions of TV viewers and radio listeners,” Smith said.

RBR + TVBR RELATED READ: NBC Sheds WNBC, WWSI, WSNS For $481.6M


The Incentive Auction “By the Numbers”

Reverse Auction

$10.05 billion Revenues to winning broadcast stations
84 MHz Cleared by the reverse auction process
175 Winning stations
$304 million Largest individual station payout – WWTO-35 in Chicago (Trinity Broadcasting Network)
$194 million Largest non-commercial station payout – WNJN-50 in Montclair, N.J. (NJ Public Broadcasting)
30 Band changing winners (moved to low- or high-VHF)
36 Winning stations receiving more than $100 million
11 Non-commercial stations winning more than $100 million

Forward Auction

$19.8 billion Gross revenues (2nd-largest in FCC auction history)
$19.3 billion Revenues net of requested bidding credits
$7.3 billion Auction proceeds for federal deficit reduction
70 MHz Largest amount of licensed low-band spectrum ever made available at auction
14 MHz Spectrum available for wireless mics and unlicensed use
2,776 License blocks sold (out of total of 2,912 offered)
$1.31 Average price/MHz-pop sold in Top 40 PEAs
$.93 Average price/MHz-pop sold nationwide
50 Winning bidders
23 Winning bidders seeking rural bidding credits
15 Winning bidders seeking small business bidding credits