Regional Bets Pull Ahead in Wireless Spectrum Auction

A notable turn of events just happened in the FCC’s auction for 700 MHz wireless spectrum that began on January 24. Throughout most of the auction, the highest bid has been for the nationwide C-block, which topped out at $4.7 billion last week. But that just changed in round 30 of the auction that closed less than an hour ago. Now, the cumulative bids for the regional licenses are more than the $4.7 billion, and they have taken pride of place as the “provisional winning bids” (i.e., the bids to beat). Corporate participants in the auction such as Google, Verizon, and AT&T can try to bid on a nationwide license or on individual regional and metro licenses in their attempts to get the desirable C-block of wireless spectrum.

On Friday, I noted that the bids were increasing for the regional licenses, and put out a theory I call the Mississippi Valley Sneak Attack, because the bids for the Mississippi Valley region were visibly climbing at the end of last week. But they never were high enough, along with the bids for the other regions, to become the winning bids until just now. The working theory is that we may be witnessing an attempt by one or more of the deeper-pocketed players to stay in the auction without showing their entire hand until the very last minute, or just win the auction by cobbling together all the regions. One possible scenario here, for instance, is that Google put in the $4.7 billion national bid, which was just above the minimum required, and basically bid against itself on that auction. Meanwhile, Verizon or AT&T could have been biding their time putting in non-winning bids for the regional blocks. Because of the rules of the auction, participants can drop out if they stop bidding. The participating companies are not allowed to discuss the auction until it is over.

Anyone can watch the auction electronically as it occurs. Go to this FCC Web page for Auction 73, click on “View Auction Result,” then click on the Results tab.

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This entry was posted on Monday, February 4th, 2008 at 2:06 pm and is filed under Company & Product Profiles. You can follow any responses to this entry through the RSS 2.0 feed. Both comments and pings are currently closed.