By Michal Lev-Ram
Round three of the year’s most anticipated auction – the Federal Communication Commission’s sale of the 700 MHz spectrum, currently used for analog television – closed Friday.
Since Thursday, bidders have put up a total $3.2 billion in what has been called one of the most significant spectrum auctions in United States history. That’s because the FCC has mandated that whoever wins the so-called C block of the 700 MHz band, which is particularly well-suited for broadband Internet, must make the new network available to all mobile devices. That could eventually upend the U.S’s tightly-controlled wireless landscape, where carriers currently rule which phones and services consumers can use on their networks.
There are four other blocks of spectrum up for sale, including one that will be used for a nationwide public safety network. Over 200 companies qualified to bid for the five blocks, including Google (GOOG), AT&T (T), Verizon Wireless (VZ), EchoStar Communications (DISH) and Alltel Wireless (AT). But because it is a “blind” auction, we won’t know who the winners of each round are – just the amounts of each bid – until the auction has ended and the minimum asking price for each block (a total of at least $10 billion) has been met. We won’t even know how many rounds there will be, as that’s entirely up to the number and amount of bids and the FCC. That means the auction could drag on for weeks or even months.
While the identity of bidders will be kept secret, the public can monitor the process – the number and value of bids – on the FCC’s website. So far the largest single bid was a $1.49 billion offer for a 50-state package of the C block of spectrum. Stearns analyst Robert Peck wrote in a note Thursday that he thinks there are at least two big bidders in the race for the nationwide C block airwaves. The minimum bid for round four is now set to $1.79 billion, still far below the $4.6 billion minimum reserved by the FCC for this portion.
The ongoing auction and the C block in particular has garnered lots of attention because of Google’s involvement – the search engine lobbied hard for the open access requirements, and said it is committed to putting up the minimum asking price ($4.6 billion) for the C block section of the airwaves. But there have been concerns that the recent economic downturn could negatively affect the auction by making it hard for newcomers to come up with the cash needed for minimum bids.
According to the FCC’s site, there will be one more round today and then bidding will start up again Monday morning. As for the actual spectrum, don’t hold your breath – it won’t be available until February 2009, when TVs make the switch to digital.
