FCC Acquires Large Swath of TV Airwaves in Auction
June 29 2016 - 1:00PM
Dow Jones News
The Federal Communications Commission said Wednesday it acquired
$86.4 billion worth of wireless airwaves from television
broadcasters in the first phase of a complex auction, an effort
designed to free up TV spectrum for cellular use.
The agency hopes wireless carriers, cable companies and other
bidders will be willing to spend that much when it resells the
airwaves in an auction that will start later this summer.
But $86.4 billion is a staggering figure—it is more than the
market cap of T-Mobile US Inc. and Sprint Corp. combined—and it is
unlikely operators will actually pay that amount. If they don't,
the FCC will reduce the quantity of airwaves it buys and ask
broadcasters to accept a lower price. Then, it will return to
carriers and auction off the smaller amount.
An FCC official said that is how the process was designed to
work. The agency expects to have multiple rounds that will
eventually match the supply with the demand.
"Strong participation from broadcast stations made this initial
clearing target possible," said Gary Epstein, chair of the FCC's
incentive auction task force. "Now the action shifts to the forward
auction, which will give wireless bidders the opportunity to
compete for this beachfront spectrum to meet America's growing
mobile data needs."
Write to Ryan Knutson at ryan.knutson@wsj.com
(END) Dow Jones Newswires
June 29, 2016 12:45 ET (16:45 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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