TV auction update

The FCC’s decision to be middleman between TV stations willing to surrender licenses and wireless companies willing to buy them is going horribly.

The basic process is the FCC set a target of how many TV channels to eliminate nationwide, then make TV stations bid downward to get the lowest price possible. Once the cost was established, wireless providers would bid upwards to buy the spectrum and the FCC would handle the shuffle. If the wireless companies bid more than the TV owners demanded, the profit would go into the US treasury, in theory.

Round one ended with a spread of $88 billion price vs $11 billion offered. Round two endedalso without success, with the gap down to only $33 billion. One of the factors leading to this result is the FCC not allowing AT&T and Verizon to bid in major markets. Arab-Mexican Carlos Slim is hoping to get a steal for his phone company.

Stage 3 starts tomorrow (November 1st). Improvements in LTE technology like VoLTE and VoWiFI are quickly decreasing the value of the spectrum. In a perfect world, licenses would be assigned to the company that offers the best products at the lowest cost, not the company willing to write the biggest Check to the US treasury.

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1 Response to TV auction update

  1. briand75 says:

    There you are, Fred. Using sound logic: “assigned to the company that offers the best products at the lowest cost..” That sounds a lot like capitalism and we all know that is the ultimate evil and is destroying the world 🙂

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