Auction underway to free up 100 MHz for mobile broadband

by Steve Blum • , ,

Worth billions now.

The long delayed double auction aimed at transferring 100 MHz of UHF spectrum from television broadcasting to mobile Internet service is finally underway. The first step is a reverse auction where television station owners bid down the price they’re willing accept to give up their channel assignments. It started this week with one daily round of bids on Tuesday and Wednesday, and stepped up to two rounds a day yesterday.

All totalled, the FCC wants to set a price for 126 MHz of UHF spectrum in the 600 MHz band. Once the price broadcasters are willing to accept hits rock bottom – a process that could run through the month of June – the FCC will set aside 26 MHz for guard bands and unlicensed uses, and then auction off the rest to mobile carriers in 10 MHz slices.

That’s the plan, anyway. It’s a complicated and expensive process. According an estimate by Wells Fargo analyst Marci Ryvicker quoted in TV Technology, mobile carriers will have to bid at least $37 billion in order for the FCC to buy back the entire 126 MHz. Less money likely means less spectrum available for mobile Internet service.

There’s also the question of whether the double-auction will be a windfall for the federal government. The original plan called for a profit of at least $24 billion, which would go to pay for public safety network upgrades. For that to happen, broadcasters have to sell low and mobile carriers have to buy high. It’s an interesting theory. We’re about to see how it works in practice.