FCC Reverse Auction Data Provides An Interesting Glimpse Into the Past
Forty years ago, Boston’s “Don’t Look Back” had just left the top of the Billboard charts. The chart topping hit featured lead singer Brad Delp singing that the past was “holding me back” and “far away and left behind.”
The FCC, however, is not taking Boston’s advice. In the Incentive Auction Report and Order, the Commission committed to keeping information about unsuccessful bids in the reverse auction confidential for a period of two years following the close of the incentive auction. Now, just over two years after the official end of the Incentive Auction, the Incentive Auction Task Force released detailed bidding data for the broadcast side of the auction. The information is available on the FCC’s Public Reporting System, which can be found at https://auctiondata.fcc.gov/public/projects/1000.
As you may recall, the Commission conducted the auction in stages. Stage 1 featured a reverse auction clearing target of 126 MHz and lasted 52 rounds. When the revenues generated in the forward auction did not exceed the total clearing cost, however, the auction proceeded to three additional stages, with Stage 4 featuring a clearing target of 84 MHz. Under the clock auction format, the FCC “froze” stations bids when it did not have an available channel to accommodate those stations in the repack. A station whose bid froze in an earlier stage could unfreeze in a subsequent stage as the demand decreased. Furthermore, VHF stations could freeze and unfreeze during a stage as demand from UHF stations to move to VHF shifted.
While we will not attempt to recreate every detail of the auction (although we have no doubt some will try), our initial review of the new reverse auction data led to some interesting observations:
- The FCC’s outreach efforts to broadcasters were overwhelmingly successful. 1,051 stations submitted applications and made an initial commitment to participate in the Reverse Auction.
- Of those, 893 stations expressed an initial preference to go off air, 72 stations expressed an initial preference to move to low VHF, and 86 stations expressed an initial preference to move to high VHF.
- Two stations froze after the first round of the auction and never became unfrozen: high VHF stations WWTO-TV in Chicago and WFXI(TV) in Greenville-New Bern-Washington, North Carolina.
- Of the 175 stations that submitted winning bids, only 8 became permanently frozen during Stage 1. 3 stations became permanently frozen in Stage 2, 4 stations became permanently frozen in Stage 3, and the overwhelming majority of stations (160) did not become permanently frozen until Stage 4.
- 500 stations stopped bidding at some point in Stage 1, 145 stations stopped bidding during Stage 2, 59 stations stopped bidding during Stage 3, and 154 stations stopped bidding during Stage 4.
- The last station in the auction was Mid State Television, Inc.’s WMFD-TV, Mansfield, Ohio. The tale of WMFD-TV demonstrates the highs and lows of the reverse auction for some bidders:
- WMFD-TV’s bid to move from high VHF to low VHF was frozen after Round 1 at a price of more than $71 million.
- WMFD-TV did not unfreeze until Round 43 of Stage 4, when its bidding resumed at $17.3 million.
- WMFD-TV’s bid to move to low VHF froze again after Round 48 of Stage 4 at just over $7 million.
- WMFD-TV unfroze after Round 52, however, with an offer price of $0 (which it declined).
The newly released data confirms that while some station owners walked away from the reverse auction “Feeling Satisfied,” for others it was “More than a Feeling” as they closed their eyes and she (auction winnings) slipped away.