With another FCC spectrum auction in the books, many broadcasters may be interested in taking stock of the value of their spectrum usage rights and the likelihood that they may have an opportunity to monetize their spectrum sometime in the future.
Let’s start with the most recent news and then try to figure out what it means for broadcasters. Last Thursday, the FCC announced the close of Auction 101, in which the Commission auctioned two 425 megahertz wide blocks of 28 GHz spectrum (27.5-27.925 GHz and 27.925-28.35 GHz) in just 1,536 counties spread across the United States (out of more than 3,000 counties total). 28 GHz spectrum is known as “millimeter wave” or “high-band” spectrum, and is characterized by short wavelengths that require dense networks with closely located transmitters. By comparison, broadcast spectrum falls below 700 MHz and is characterized by long wavelengths that allow broadcast signals to travel long distances and penetrate buildings.
The value assigned to the 28 GHz spectrum, at $0.011/MHz-POP, was by far the lowest of the three most recent FCC spectrum auctions:
|Auction||Average Price (MHz-POP)|
|AWS-3 (Auction 97)||$2.71/MHz-POP|
|TV Broadcast Incentive Auction (Auction 1002)||$1.26/MHz-POP|
|28 GHz (Auction 101)||$0.011/MHz-POP|
However, there are several explanations for the lower prices in Auction 101, including the location of the spectrum in a frequency band that requires more physical infrastructure, the lack of terrestrial operations in nearby spectrum bands, the smaller geographic areas for each license, and the sheer volume of spectrum associated with each license (425 MHz, compared with 5 MHz pairs in Auction 1002 and Auction 97). Furthermore, the licenses available in Auction 101 only covered about 24% of the population and did not include counties located in most large metropolitan areas.
So what does this mean for broadcasters?