US 600MHz spectrum auction has a $86.4 billion clearing target

04 July 2016 |


The US regulatory authorities have completed the arrangements for the reverse auction stage of repackaging the 600MHz spectrum.

The US Federal Communications Commission (FCC) this week completed the arrangements for the reverse auction stage of repackaging the 600Mhz spectrum. It is currently used for TV broadcasting, but the intention is to convert it for mobile wireless internet use.

The FCC has calculated the minimum cash-out that broadcasters would accept in order for the auctions process to end. The amount is $86,422,558,704.

The FCC has cleared 126 MHz of 600-MHz spectrum. According to auction regulations, operators' cumulative bids in the forthcoming forward auction must hit that $86.4 billion figure in order for the spectrum to be sold.

At $86.4 billion, or approximately $2.15 per MHz per capita, the FCC will almost certainly have to conduct more rounds of the reverse auction in order to lower the price. This will also have the effect of reducing the volume of spectrum available.

The last major U.S. spectrum auction concluded in January 2015, and saw bidding for 65 MHz of spectrum in the 1700 MHz and 2.1 GHz bands reach almost $45 billion.

The last time sub-1GHz spectrum went under the hammer was in 2008, when the FCC sold off 84 MHz of 700-MHz spectrum, and raised $18.6 billion.

Many US analysts and commentators are sceptical that the money will be available from even the wealthiest carriers to afford these prices. The forward auction is expected to begin late in July or early August.