Well, it’s that time again – Halloween! Well, yes and no – Ghosts and Goblins, Pirates and Princesses, Specters and Superheroes are just around the corner… but what we are concerned with in the skies aren’t ghosts & specters but radio waves (and, OK, pirates). Yes folks, it’s time once again for another round of FCC Auctions! With the value of our airwaves increasing, it’s rare that a particular frequency won’t have a line of eager suitors awaiting a long relationship. ‘Papa FCC’ won’t let just anyone have a relationship with his airwaves – no sir! A suitor needs lots of long-green in this bidding. Smaller third party would-be media moguls complain about this process being unfair to them, but the FCC counters such dissent with the ever-popular ‘make proper use of the airwaves’ argument. Only cynical people would suggest it’s all about the Benjamins … (wink).
While there is nothing spectacular about the auctions themselves, aside from the fact that “an airwave’ – something that can’t be seen, touched, handled, smelled, tasted, etc. is being sold for “Bill Gates Money” at amounts most people can’t even fathom! But the process to even become one of those bidders “in the running” is as complicated as any other government procedure. Let me see if I can give you a taste of the bureaucracy required before the government allows you to spend an inordinate amount for something that can’t be seen, touched… you know the rest!
Auctions don’t just pop out of nowhere – after the availability or impending availability of a particular airwave is determined by the FCC then auction process can begin. First, The FCC issues a public notice (in accordance with the Budget Act of 1997) 4 to 6 months prior to the auction. Secondly, a public notice of probable participants (along with basic terms and conditions) is announced 3 to 5 months beforehand. The next step is a free Seminar 60 to 75 days before the auction where likely participants in the auction become acquainted with the auction rules and procedures. Software that will be used in the bidding is demonstrated and a Q & A session follows. The first deadline imposed on would be airwave owners is 45 to 60 days before the sale when they have to complete a “Form 175 Application” and submit it electronically.
At this point, the availability of bidder slots is closed. But there’s still paperwork to shuffle and additional public notices to be announced before the auction itself arrives. Next, is the Short Form Application Status Public Notice that occurs 30-40 days before the main event; in this phase, the FCC announces which applications were accepted or rejected or deigned incomplete. The next 2 steps in the process often (but not always) occur concurrently; these are the Upfront Payment Deadline along with the Short-Form Application Resubmission Deadline both approximately 3-4 weeks before the auction. Applicants must have their (refundable) deposits turned in and any necessary corrections to Form 175 made and then refilled.
Now the lead in to the auction is in the home stretch. A Qualified Bidders Public Notice is issued 10-14 days before the much anticipated auction. All the bidders that were accepted, made their initial deposits, and properly completed their paperwork on time are announced. Details about the rest of the pre-auction process are issued along with some information about the auction itself. The next to last pre-auction step is the Qualified Bidders Registration is completed with about 7 days left until the big event, by this point all the paperwork must be finished and RSA SecurID Cards are issued to all the qualified participants so they will be able to participate in the electronic bidding. Finally 2-5 days before the actual auction is the Mock Auction (or Moc-tion as I prefer to call it). Bidders run through the auction process to insure they have full understanding of the actual process.
The auction itself takes anywhere from a day to several weeks; more frequencies being sold at once and more bidders drags out the total time. Before 1993’s Omnibus Budget Reconciliation Act, the airwave distribution system was even more convoluted. When 2 or more parties were in completion for the same airwave in the same area, it necessitated various hearings and lotteries to determine who would end up this sought after ethereal resource. The auction approach is simpler and faster. The electric sealed auction was chosen in an attempt for both convenience and to prevent the potential of collusion among perspective bidders.
So, what’s on the upcoming docket? Auction #97 for Advanced Wireless Services (AWS-3) sale is scheduled to begin on 11/13/2014. The applications of bidders were announced on 10/1/14; who wins is obviously still up in the air, but the highest posted bidding ranges (which were identical) belonged to: Bek Communications Cooperative, Emery Telcom-Wireless, Inc., FMTC Wireless, Inc., New Access Wireless, LLC, and Pine Cellular Phones. How high can bidding go? Well, the most recent auction ended in Feb 27th of this year. It was the sale of H Block Spectrum that went to Dish Network for 1.56 BILLION. They finally won with that offer after 167 rounds of bidding. Currently, there appear to be 2 more auctions in the works – these are Auction #83 for FM Translator and Auction #89 for 218-219 MHz Service and Phase II 220 MHz Service Licenses. No word yet on when those auctions are, but those appear to be the next two up to bat.
See more at the FCC Auction website here: wireless.fcc.gov/auctions/default.htm?job=auctions_home
FCC Auction sign-in here: auctionsignon.fcc.gov/signon/index.htm