A version of this post originally appeared on B&C, a news source of New Bay, providing multichannel marketing solutions and information to communities.
In response to the just-announced $86,422,558,704 clearing cost for broadcasters to exit spectrum—at least in the first round of the FCC’s auction and at the highest spectrum clearing target of 126 MHz—Wells Fargo senior analyst Marci Ryvicker said, “This is way, way, way above what we had been expecting ($35B) and also way, way, way above what consultants had been saying ($50-60B).”
“Our quick take is that the broadcasters showed discipline – investors were fearful that this would be a race to the bottom and it clearly was not; rather this was an orderly auction that came out with prices much higher than expected. That said, this creates a challenge for the forward auction as we have struggled to see more than $30B being spent by the wireless companies. This clearly means, to us, that the entire incentive auction will run through multiple stages and could go into 2017 unless the FCC will pursue a quick forward process; i.e. allowing multiple (and when I say multiple, I mean multiple) rounds per day.”
But, as she also points out, it will not be until the forward part of the auction—where wireless carriers and others bid on the reclaimed spectrum—that the marketplace decides how much broadcasters will ultimately get.