Regional Licenses a Hit in FCC Auction

Carl Weinschenk

We've gotten through Super Sunday and Super Tuesday -- with Super In-Between Monday thrown in. But the FCC 700 MHz auction is ongoing, and there are interesting developments to report on that front.


The auction kicked off at what appeared to be an inopportune time. The economy was tanking and the big debate in the media was when a recession would start. That clearly was a concern for the FCC. The good news, at least from the point of view of those who want to fill federal coffers, is that the misgivings were misplaced. Wired says that after 32 rounds of the auction, the grand total bid has hit $18.8 billion, easily surpassing the goal of $10 billion to $15 billion.


The story points out that the most action is in the regional licenses. The writer says that a lot of the interest probably is from existing carriers aiming to plug gaps in their existing infrastructure as opposed to new entrants trying to create a national footprint in one fell swoop.


FierceBroadbandWireless editor Lynette Luna concurs that the fragile state of the economy has not, up until this point, appeared to hurt the auction. But we may not be out of the woods, she says. Luna points out that the D block of spectrum is unlikely to be auctioned. The minimum for this section of the spectrum, which has gotten a lot of publicity because it is nationwide and includes a requirement to build a public safety network, has gotten only one bid. The $472 million bid is below the $1.3 billion minimum set by the FCC.


Luna suggests that the real impact of the bad economy will be on two groups: smaller telecom companies with less access to capital and non-traditional players who may be reluctant to jump into a new business under the current conditions.


In a parallel development that could affect the ongoing auction, the FCC this week approved the purchase of 12 MHz of 700 MHz spectrum by AT&T. The sale originally was announced last October. It covers 60 percent of the U.S., representing 196 million of 303 million people in 72 of the top 100 media markets. The Wired piece suggests that this could lead AT&T to bypass the auction.


The anonymous nature of the auction (what little information is being released by the FCC is available here) leads to fun speculation. Promaxum Technology News reports on rumors concerning Google and Verizon. Google waged a successful campaign to get the FCC to adopt open access rules that stipulate that users of spectrum in the C block would be able to choose their device. Google promised to bid $4.6 billion for the spectrum. Many analysts thought Google would not go beyond this bid, in the hopes that another company would win the spectrum and actually build the network.


The post says that "from all indications" it appears that Verizon, which would be a likely bidder on C block, has instead gone after enough regional spectrum to push the amount bid past the C block bid (presumably, Google's $4.6 billion). The post says that if regional bidder beats C block, that spectrum is divided among the companies that bid for it. This dovetails nicely with the thrust of the Wired post. At the end of the Promaxum Technology News post, however, the blogger suggested hat this was an overly optimistic reading of the tea leaves, at least from the point of view of folks who want to see Google walk away with spectrum.


Eli Manning and David Tyree took care of Super Sunday, and Wolf Anderson and the others did the honors Tuesday. The auction, however, will keep going as long as bidding continues on the regional licenses, the Wired piece says.

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