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Bidding begins in Stage 4 of FCC reverse auction

Bidding in Stage 4 of the reverse portion of the FCC's broadcast incentive auction began Dec. 13.

The stage has a clearing target of 84 MHz, meaning the FCC is bidding to purchase that much spectrum from participating broadcasters. After accounting for the guard bands and duplex gap, that will leave 70 MHz, or seven paired blocks, of licensed spectrum to be offered to wireless or other bidders in the forward auction on a nationwide basis.

For the auction to close successfully, forward-auction bid prices must meet or exceed the clearing cost, or the amount needed to buy stations' spectrum in the reverse auction, plus $1.75 billion in repacking expenses the FCC has budgeted.

Thus far in earlier stages of the auction, there has been a wide gap between the reverse auction clearing costs and the cumulative forward auction bids. Stage 3 of the reverse auction, for instance, ended with a $40.31 billion clearing cost, whereas the forward auction brought in only $19.68 billion in bids. The overall auction will continue to move into new stages with lower clearing targets until the amount paid by the FCC for broadcast spectrum in the reverse auction matches that purchased by bidders in the forward auction.