WASHINGTON-Bidders in the D-, E- and F-block personal communications services auctions appear to be in no hurry to end it. According to analyst Taylor Simmons, even if the Federal Communications Commission ramps up to three rounds per day (which it may do this week), wrangling over the 10 megahertz spectrum slices could continue into December. Simmons pointed to the slow rate of decline in eligibility as one contributor to the auction’s longevity.
At the end of Round 71, net revenue for the three blocks totaled $1.86 billion, with the same five companies leading the pack in high bids: SprintCom Inc., AT&T Wireless PCS Inc., BellSouth Wireless Inc., Alltel Mobile Communications and Northcoast Operating Co. Inc.
What continues to be unusual is the disparity in prices among the blocks. BIA Consulting Inc.’s research shows that $776 million has been bid for D-block markets, with a national average price per pop of $2.96. For the E block, $781 million has been committed, with a national average price per pop of $2.98. In the F block, only $311.6 million has been garnered, with an average national per-pop price of $1.19.
Simmons’ analysis of bid hills and valleys as of Round 69 showed the D and E blocks in Los Angeles were moving at more than $30 million each, while the F block languished at $5.9 million. In Chicago, the upper two licenses were bid at $59.9 million and $62.7 million, with the F block at $30.7 million. San Francisco had an almost 2: 1 ration between the D and E block and the F block, as did Dallas/Fort Worth, St. Louis, Pittsburgh, Baltimore, Phoenix, Houston (almost 3: 1), Atlanta (3: 1), Cleveland-Akron (almost 4: 1), Minneapolis-St. Paul (about 5.5: 1), Tampa-St. Petersburg (6 or 7: 1), San Juan (30: 1), Denver (up to 7: 1), Cincinnati (6: 1), Kansas City (up to 4: 1) and Milwaukee (4: 1).
On the flip side, some F-block markets are being bid well-beyond their D- and E-block counterparts. New York City’s F block, as of Round 69, was priced at $100.3 million, compared with $50 million for the D block and $58.8 million for the E block. Philadelphia’s F block was almost twice as high as the other two figures, Washington, D.C., was more than double, Miami-Fort Lauderdale, 3: 1 and Seattle-Tacoma, 2: 1.
In another turn of events, NextWave Power Partners Inc. withdrew its high bid on the D-block Dallas market. Simmons speculated that the penalty could be $2.3 million, “assuming Western PCS BTA 1 Corp. takes this opportunity to reclaim Dallas, and no one else bids on it.”
