Wednesday, March 19, 2008

FCC 700 MHz Auction is Over..... Sort Of

Yesterday afternoon, FCC Auction 73 bidding round 261 ended and, after 38 days and $19.592 billion in bids (almost double the $10 billion the FCC had hoped for), the FCC closed out the auction.

Eight of the C-Block regional licenses had a reserve price of $4.6 billion that, when passed early in the auction (round 17), triggered an open access provision in the auction. This meant bidders could bid on individual C-Block licenses and, it appears the 12 C-Block licenses may be split up among bidders. Most experts are predicting Verizon and/or AT&T will take most of the C-Block while a smaller group still believes Google will be in the mix.

The C-Block provision requires the C-Block winner(s) to give access to
any device compatible with the network’s chosen technology. This open access provision was pushed hard by Google and, whether Google is a winning bidder or not, Google will have access to this spectrum.

There were 1,099 licenses auctioned and only eight did not receive any bids:

Lubbock, Texas
Wheeling, W.Va.

Bismarck, N.D.
Fargo, N.D.
Grand Forks, N.D.

Lee, Va.

Yancey, N.C.

Clarendon, S.C.

These licenses will need to be re-auctioned by the FCC. I'm guessing they were over priced, the FCC will end up dropping the re-auction minimum bid and they will end up going quickly.

The Public Safety D-Block did not meet the minimum bid and the FCC will have to decide what to do. It looks like the FCC could go one of two directions for the re-auction - drop the price or change the requirements. House Telecom Subcommittee Chairman Edward Markey (D-Mass.) is quoted on the D-Block in a post by RCRWirelessNews:

“I believe that any new auction for the ‘D-block’ should be consistent with an overarching policy goal of advancing public-safety objectives and ultimately achieving a state-of-the-art, broadband infrastructure for first responders. In developing a plan for a re-auction of the ‘D-block,’ the FCC should also take into account the auction results to gauge the level of new competition achieved. Policymakers should also analyze whether a need for a high reserve price continues to exist. Moreover, I believe we must fully review the nature and authority of the public safety spectrum trust and whether this model should be retained or modified, the length of the license term, the build-out requirements and schedule of benchmarks for such build-out, the opportunities for ensuring further openness in wireless markets, the penalties associated with failure to fulfill license conditions, and other issues.”

From the start, the public safety D-Block auction was seen as one of the biggest auction challenges...... I've expressed my opinion on the D-Block in the past........ the FCC still has some major work ahead before they can close this one out.

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