Former FCC Chairman Wheeler has a ‘huge smile’ for 600 MHz incentive auction results

The former chief of the FCC, Tom Wheeler, described the agency’s 600 MHz incentive auction as a successful event that should generate a “huge smile” for administrators.

“We were charged with creating a marketplace and that marketplace successfully performed to produce the second largest amount of spectrum ever auctioned; and to do so by reallocating spectrum to its highest and best usage as determined by the market,” Wheeler said in response to FierceWireless' questions on the topic. “When you think of the fact that no one in the world had ever tried this two-sided auction, and all the new and unique issues that had to be dealt with for the auction to take place, one can only have a huge smile.”

Wheeler also lauded Gary Epstein, the chairman of the FCC’s Incentive Auction Task Force and the regulator largely in charge of planning and executing the incentive auction, saying “I hope that when the auction closes, folks will begin to pay attention to the ground-breaking and back-breaking efforts of the Auction Task Force.”

Wheeler’s comments are noteworthy as the FCC’s ongoing incentive auction winds down. Forward bidding in the event ended in February with bidders committing $19.63 billion for TV broadcasters’ airwaves, surpassing TV broadcasters’ asking price of $10 billion. Spectrum prices reached roughly $1.257 per MHz/pop, topping $1.25 per MHz/pop in the top 40 markets.

That sum is a far cry, though, from the $45 billion in bids generated by the landmark AWS-3 auction, which ended in early 2015. TV broadcasters had set an initial clearing cost at a staggering $86.4 billion for 126 MHz at the outset of the incentive auction last May, but that figure was lowered dramatically—as was the amount of spectrum made available—in subsequent rounds.

Nonetheless, the auction freed up a significant amount of low-band spectrum from TV broadcasters through an innovative bidding system in which broadcasters agreed to relinquish their spectrum through a reverse auction while wireless carriers and others bid on those airwaves through a traditional forward auction. The structure of the auction essentially allowed the government to mediate the transfer of spectrum licenses from TV broadcasters to wireless carriers and other bidders through an anonymous auction system.

Wheeler was appointed to the FCC by former president Barack Obama in 2013 and served in the position until earlier this year, when President Trump took office and appointed Republican Ajit Pai as chief of the agency.

Although bidding in the forward portion of the auction has come to a close, the FCC has not yet released the identities of any winning auction participant. However, clues are beginning to trickle in. For example, in a recent filing with the government, AT&T said that its bids in the ongoing 600 MHz incentive auction should be well below the amount it made in deposits to the FCC prior to the start of the auction. One analyst calculated that AT&T likely made around $2.4 billion worth of deposits to the FCC to participate in the auction.

Meanwhile, according to a new government filing from U.S. Cellular, the nation’s fifth largest wireless network operator submitted bids for a minimum amount of $327 million during the FCC’s 600 MHz incentive auction of TV broadcasters’ unwanted spectrum.