Starting gun fired in airwaves auction

Top-shelf television broadcast airwaves in New York could fetch an opening bid of $900 million in the Federal Communications Commission’s spectrum auction to be held early next year. 

The commission released its list of hundreds of opening-bid prices it will make to purchase spectrum, currently held by television broadcasters around the country, that will eventually be turned around and auctioned off to wireless carriers who are fighting to keep up with the country’s increasing demand for mobile phones and other connected devices. 

{mosads}The opening-bid prices range from $900 million for WCBS-TV in New York to the six-figure range for some stations in Western states. The prices are based on a formula developed earlier this year that takes into account population and interference, among other things.  

“For potential Incentive Auction participants, today is a watershed moment. For all practical purposes, we’ve fired the starting gun,” FCC Chairman Tom Wheeler said. 

The opening prices are meant to entice broadcasters into giving up their caches of spectrum. They are given the option to move entirely off the air, which would command a high price. 

Broadcasters who do not want to go off the air could sell for lower prices and move to a different band of spectrum. They will have until Dec. 18 to decide if they will participate in the auction, set to begin in March. Wireless service providers, in turn, will have until late January to file paperwork to participate in the auction.

The dual spectrum auction is the first of its kind. 

Broadcasters, who own a large share of the country’s spectrum, will sell it off to wireless providers such as Verizon and AT&T. About three-quarters of people in the United States own smartphones, and demand for spectrum has grown rapidly in the past decade. 

The auction is set to take place in multiple parts. The FCC will hold a “reverse auction” with broadcasters to see what price they would demand for their spectrum rights. The agency will then hold an auction with wireless companies to purchase those rights.

The Congressional Budget Office has said the auction could net the government between $10 billion and $40 billion. A separate spectrum auction that ended earlier this year netted about $41 billion.