FCC Airwaves Auction Fails to Draw Enough Bids, Again

The latest stage of the U.S. government's massive airwave auction unexpectedly ended Wednesday after a single round of bidding, triggering a new stage of the complex process that aims to free up spectrum for wireless services.

Bidding for the airwave licenses closed Wednesday after two hours because of lack of demand, according to the Federal Communications Commission website. This is the second time the FCC has failed to draw enough interest from cellphone operators like AT&T Inc., Verizon Communications Inc. and Comcast Corp. in buying the licenses it agreed to acquire from television broadcasters.

The FCC has already had to substantially lower the amount it is seeking to buy from broadcasters after bids in the first round fell far short. Last week, the FCC said it agreed to spend $54.6 billion to acquire airwaves from broadcasters, down from its initial round of $86.4 billion. The FCC will now go back to television broadcasters for a third time, cutting the number of licenses it will buy from stations and likely reducing the price it pays for those it does acquire.

The airwaves the government is seeking to free up are ideal for wireless use and are capable of sending signals great distances and penetrating deep into buildings. With growing smartphone use especially for data-heavy video watching, the country's biggest wireless operators need more spectrum to support that growth.

In the auction process, if demand doesn't exceed supply in the top markets, then the stage will end. In this stage's first round of bidding, it failed to cross that threshold ending the bidding abruptly despite drawing $21.5 billion in offers.

The FCC first tried to draw bids for 100 megahertz of licenses, then lowered that to 90 megahertz for the latest round. It will now be cut to 80 megahertz in the next try.

FCC officials have said the auction is designed to run multiple rounds to match supply with demand. It isn't predicted to close until later this year or in 2017.

Write to Thomas Gryta at [e-mail]

(END) Dow Jones Newswires

October 19, 2016 16:05 ET (20:05 GMT)

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