Optimal Auctions Blog

Understanding the Rules of the FCC Incentive Auction

Posted by Mike on October 23, 2014
Understanding the Rules of the FCC Incentive Auction

Wondering how the FCC's incentive auction will work, and not getting enough information from the regular news sites about it? Curious about whether the rules favor AT&T and Verizon, or T-Mobile and Sprint? Asking how the sell-back of spectrum works with the broadcasters?

Richard Marsden, a spectrum auction expert at NERA, breaks down the rules in an easy to understand format, which helps you see just how the FCC has set up this incentive auction to both reward the broadcasters who are selling the spectrum back to the government, and offer it back to the telecoms here in the US.

The US 'Incentive Auction' of 600MHz (UHF) bandwidth is the most ambitious spectrum auction ever proposed. Up to 144 MHz of "beachfront" radio frequencies could be repurposed from terrestrial broadcasting to mobile broadband. While the Federal Communications Commission (FCC) is still in the process of soliciting public input on the auction design, what is known is that the process will combine two separate but linked auctions:
  1. A Reverse Auction, which will identify a set of prices at which broadcasters are prepared to relinquish channels or move frequency band; and
  2. A Forward Auction, which will determine how much cellular operators are willing to pay to acquire the frequencies.

Detailed auction rules will not be released until early 2015, but broadcasters, cellular operators, and other interested parties are already considering how the rules may affect their participation in the process.

- Read the entire presentation here -