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CBO: Broadcast incentive auction to net $10-$40 Billion

By Nfrastructure CC BY 2.0 via Wikimedia Commons

A Congressional Budget Office report estimated that the broadcast incentive auction could net the government between $10 and $40 billion. The mid-range estimate of the proceeds is $25 billion.

The CBO did the analysis at the request of Sen. Dean Heller (R-Nev.).

Since the Federal Communications Commission has never held a two-sided auction, the CBO said it was difficult to estimate.

Considered the most complex government auction in history, the broadcast incentive auction first will take bids from broadcasters that voluntarily wish to sell spectrum to the FCC, followed by an auction of that spectrum to wireless companies that wish to buy.

After setting aside $1.75 billion to cover the costs for TV stations to move to another channel, the remainder is earmarked to go to the Treasury to reduce the deficit, as required by the law authorizing the auction.

The estimate does not include what the broadcasters would receive in the front part of the incentive auction. Studies commission by the Expanding Opportunities for Broadcasters Coalition estimated the total auction could bring in $60 to $80 billion. That would top the $41 billion gross for the recently-completed AWS-3 auction, a sum that triggered increasing interest by broadcasters in the incentive auction.

What the auction will deliver in terms of dollars has been the subject of some controversy. Analyst Craig Moffett painted a gloomy picture of the outcome earlier this week at the State of the Net Wireless conference in Washington.

The FCC plans to hold the auction in early 2016.