The Congressional Budget Office estimated today that the FCC’s incentive auction may net between $10 billion and $40 billion, “with an expected value of $25 billion,” with most of that going to the U.S. Treasury. The amount appears to be what CBO generally expects the Treasury to get after broadcasters are compensated, according to budget experts.
The figures were included in a letter from CBO Director Keith Hill to Sen. Dean Heller (R., Nev.), a member of the Senate Commerce, Science, and Transportation Committee who posed questions to CBO about FCC auction revenues.
CBO noted that the AWS (advanced wireless services)-3 auction generated “net receipts” of $41.3 billion. The spectrum sold in that auction was in higher bands with less favorable propagation characteristics. But some carriers and others have noted that the incentive auction is more complicated, and some say the FCC’s plan to set aside spectrum for providers with fewer frequencies below 1 gigahertz could depress bidding. Some also say that revenue totals from the AWS-3 sale were inflated due to bidding arrangements that Dish Network Corp. had with two small companies.
Some parties project that the incentive auction will see higher revenues than the AWS-3 sale. For example, Preston Padden, executive director of the Expanding Opportunities for Broadcasters Coalition, noted today that SNL Kagan expects auction revenues of $60-$80 billion, while auction expert Peter Cramton has estimated revenues of at least $84 billion.
“Nothing in the CBO letter is a surprise to those of us who follow budgets and scorekeeping. CBO has been consistent in both its scoring practices and its forecast for net incentive auction receipts since the Middle Class Tax Relief Act was adopted in February 2012,” said David Taylor of Capitol Solutions, a government relations firm.
The National Association of Broadcasters had no comment on CBO’s estimate, nor did the FCC.
The record AWS-3 auction revenues have prompted some broadcasters to take a closer look at participating in the incentive auction, according to industry officials.
– Paul Kirby, firstname.lastname@example.org