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Incentive auction could net government $49 billion to reduce debt

The broadcast incentive auction of prime wireless spectrum, planned for early 2016, could net the government nearly $49 billion, according to a study conducted by auction expert Peter Cramton for the Expanding Opportunities for Broadcasters Coalition (EOBC).

The coalition of nearly 100 TV stations, which would like to see the highest possible prices for broadcasters in the reverse auction, presented the results Monday afternoon to the Federal Communications Commission auctions task force.

If the FCC is keeping to its schedule, the agency should be getting close to making some final decisions about how it will run the auction and deliver initial bids to broadcasters later this summer.  That means broadcasters can make a decision later this summer whether to relinquish spectrum for the auction.

To make the case for the highest possible prices, Crampton did more than 180 reverse auction simulations using the FCC’s new interference criteria.  The study concluded that, with slightly higher prices for broadcasters, the reverse auction can clear 126 MHz of spectrum from broadcasters for $35 billion and could sell that spectrum in the forward auction to wireless bidders for $84 billion.

EOBC has advocated all along that the auction be held without delay; the group intervened in the recent court case on behalf of the FCC to help keep the auction on track. The group is also advocating for more transparency during the reverse auction for broadcast bidders, and for a simpler way to set the spectrum clearing target in each market.