Computer Mogul Stands to Make Big Bucks in Spectrum Auction

By Kevin Eck 

Michael Dell, founder and CEO of the computer company that bears his name, has positioned himself to make billions in the upcoming spectrum auction.

A company controlled by his investment fund has spent about $80 million on independent stations since 2011. The airwaves those stations broadcast on could be worth about $4.2 billion. Though the Wall Street Journal reports the big return may not be guaranteed.

Mr. Dell is unlikely to walk away with the opening bids for his stations because of how the FCC auction will be run. The agency will start by offering top dollar and then lower its offers, in a process similar to a Dutch auction, until it gets the cheapest price for the airwaves it needs. The process was designed to spark participation from more than 2,000 eligible broadcasters. The final prices paid are expected to be much lower and many stations that join may not be purchased at all.

Tuesday was the application deadline for participating in the auction. Some big owners of local stations decided to jump in, including CBS Corp., Comcast Corp.’s NBCUniversal unit and Univision Holdings Inc. These companies can opt to sell some airwaves but continue to broadcast by moving their channels or sharing frequencies. Others like a Lansing, Mich., PBS station chose not to join the auction, despite the potential for huge returns.