U.S. FCC Initiates Stage 2 Of The 600 MHz Spectrum Auction
Zacks Investment Research | Sep 13, 2016 10:12PM ET
U.S. telecom regulator, the Federal Communications Commission (FCC), yesterday, initiated stage 2 of the second part of the ongoing 600 MHz low-band wireless spectrum auction, popularly known as -- Incentive Auction. Stage 1 of the Incentive Auction witnessed total bids worth $23 billion after the twenty-seventh round of bidding. Notably, the FCC’s first Final Stage Rule was that the minimum bid total should reach $15.9 billion for the spectrum auction to continue.
The Incentive Auction, which was initiated by the FCC on Mar 29, 2016, completed its first part in Jul 2016. In this part, which was essentially a reverse auction, the airwaves were freed by TV broadcasters who no longer had any productive use of the same. The TV broadcasters had agreed to free a substantial 126 MHz of spectrums for a massive $86.4 billion.
As per the Final Stage Rule of the FCC, the proceeds from the forward auction (net of bidding credits and impairment discounts) must be sufficient to cover Incentive Auction costs. These costs include the aggregate of broadcaster clearing costs, approximately $226 million to cover the FCC’s costs for conducting the auction and $1.75 billion for the TV Broadcaster Repacking Fund. Accordingly, the forward phase of the Incentive Auction must generate $88.4 billion for the whole process to be successful.
The FCC has received as many as 62 applications for the second part of the Incentive Auction. All 62 bidders have made upfront payments. Important bidders include national telecom giants Verizon Communications Inc. (NYSE:VZ) , AT&T Inc. (NYSE:T) , and T-Mobile US Inc. (NYSE:T) , satellite TV operator DISH Network Corp. (NASDAQ:DISH) and cable MSOs (multi service operators) Comcast Corp. (NASDAQ:CMCSA) and Liberty Global (NASDAQ:LBTYA) Inc. Each of these stocks currently carries a Zacks Rank #3 (Hold). You can see Zacks Investment Research
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