First round of buyer bidding in spectrum sale doesn’t hit target

Bidding concluded late in the day on Tuesday in the first round of a historic spectrum sale to wireless providers and other buyers without regulators reaching their target for the sale.

The first stage of the Federal Communications Commission’s sale ended without buyers bidding the $88.3 billion needed to hit the price target. The agency will hold another stage of the auction with a lower spectrum clearing target.

{mosads}A bidding pool that includes major wireless carriers like AT&T and Verizon as well as other companies, like Comcast, and individuals bid roughly $22.4 billion in the first round.

The high price target points to the auction’s first-of-a-kind design. The FCC spent part of this year buying wireless spectrum, the invisible frequencies that carry signals to mobile devices, from broadcast stations. Now they’re attempting to resell it to wireless carriers and other bidders.

The broadcasters were active participants, leading to the high cost bar that the commission needs to clear. The $88.3 billion number also includes some costs associated with the auction.

The commission also set the highest possible target before the auction began for the amount of spectrum it would attempt to sell.

The trade group representing broadcast stations on Wednesday morning hinted that the showing in the first stage of the auction was evidence that the wireless industry’s pleas for more spectrum were misleading.

“NAB is surprised by the modest participation by wireless carriers in the first stage of the TV auction,” said National Association of Broadcasters Executive Vice President Dennis Wharton in a statement. “Perhaps the notion of a ‘spectrum crisis’ pedaled in Washington for the last seven years is not as acute as policymakers were led to believe.”

The auction is an attempt to meet the demand for wireless spectrum caused in large part by the proliferation of data-hungry smartphones. FCC Chairman Tom Wheeler has set high expectations, saying that he expects the auction to be a “spectrum extravaganza.”