The Federal Communication Commission’s 700 MHz spectrum auction picked up early this morning with a pair of bidding rounds that saw that total potential winning bids climb to just over $4.4 billion. Highlights included continued interest in the regional grouping of C-Block licenses, a lack of new bids for the floundering national commercial-public safety D-Block license and the first withdrawal from the proceedings.
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The FCC sped up the action, moving to four rounds per day starting today. The morning began with round five, where potential winning bids jump more than 16% to $4.3 billion thanks to more than 980 new bids. Round six was much less fruitful with 968 new bids only causing a 2.2% increase in total potential winning bids to $4.4 billion.
Down one
One of the auction’s 214 bidders dropped out of the event during round six, but due to the closed nature of the bidding proceedings the bidder’s identity was not released. The withdrawal left 213 eligible bidders.
The package of eight, C-Block spectrum licenses covering the 50 states remained the crown jewel of the event with one new bid during round five pushing the license’s total potential winning bid to $2.15 billion. The package did not receive a bid during round six. Total potential winning bids for the C-Block licenses after round six totaled just over $2.15 billion, which is nearly half-way to the $4.6 billion reserve price that would trigger the open-access provision of the licenses. Google Inc., which was a proponent of the open-access provision, has said it would bid at least that amount for the C Block.
With the blind bidding handicapping auction analysis, some have taken to reading tea leaves.
“Our interpretation of the C Block activity suggests that there are only two bidders, most likely Google and Verizon Wireless, and we are a skeptical that either would move over to the D Block,” said analyst firm Stifel Nicolaus in a research note after round five. “It is also possible that there is only a single bidder for the C Block, increasing its bid each round, perhaps Google to trigger the reserve.”
AT&T Inc. was also thought to be interested in the C Block, but with its pending acquisition of Aloha Wireless’ substantial 700 MHz spectrum holdings moving quickly through the FCC, many see the industry’s No. 1 player as taking a more cautious approach.
Round six did see some activity on individual C-Block licenses, with a handful of bids for the West, Great Lakes, Northeast and Mississippi Valley regions.
Beyond the big dollars being thrown around the C Block, a flurry of new bids continue to come in for the smaller B-Block licenses. The B-Block license covering the Los Angeles cellular market area received nine new bids during both round five and round six, while the B Block covering the San Antonio area picked up nine bids during round six.
D Block woes
Bidders continued to avoid the D-Block license, with the controversial block of spectrum still sitting with its $472 million potential winning bid posted during the opening round of the auction. The license has a $1.3 billion reserve price.
“Although it is still technically possible for someone to bid on the D Block, we believe that if there are no further bids today, it will suggest there probably will not be any parties — apart from the bidders on the nationwide C Block license — with enough eligibility to buy the D license at the reserve price, making it increasingly unlikely to be sold in this auction, in our view,” noted Stifel Nicolaus.
There are two more rounds of bidding scheduled for later today.
