After a soft opening during rounds five and six early Monday, bidders in the Federal Communication Commission’s 700 MHz auction turned up the heat in the afternoon, sending potential winning bids for the 967 licenses that have garnered interest to past the $6 billion mark.
Round seven included 980 new bids and pushed total potential winning bids up more than 20% to $5.3 billion. The total was boosted later in the day as round eight witnessed 890 new bids that added nearly 15% to the pot, which jumped to $6.1 billion.
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The package bidding on eight C-Block licenses covering the 50 states continued to garner the highest bidding with one new bid in round seven pushing the license price to nearly $2.6 billion, followed in round eight by a new bid pushing the price to nearly $3 billion.
Optimal Markets Inc. noted that the potential winning bid for the C Block at the end of round eight equaled 48 cents per megahertz/potential customers covered. That was slightly below the 54 cents per MHz/pop generated for all spectrum auctioned during the advanced wireless services auction and just over half the $1.06 per MHz/pop AT&T Mobility is currently offering as part of its acquisition of Aloha Partners L.P.’s 700 MHz spectrum.
Potential winning bids for the C Block has neared 66% of the reserve $4.6 billion needed to trigger the open-access provision on the spectrum. The minimum price for a new bid on the license will begin at $3.4 billion when the auction resumes Tuesday.
Analysis of who might be involved in pursuing the C-Block license has been limited due to the FCC’s closed bidding process, but analysts have suspected that it could be a two-horse race between Google Inc. and Verizon Wireless. Google has said it would bid at least the reserve price for the spectrum.
Cellular market areas in Texas and California continue to draw intense bidding with the B-Block license covering Los Angeles picked up 10 new bids during round seven, while the B Block covering San Antonio picked up 10 of its own in round 8. The New York City area continues to attract the most money as the A-Block economic area license covering the area had the third highest potential winning amount of $298.1 million after round eight, followed by the B-Block CMA license at $213 million and the unpaired E-Block EA license at $149.1 million.
While the A-, B-, C- and E-Block licenses have gained their fare share of bidding interest, auction participants continue to tip-toe past the national commercial-public safety D-Block license, which has yet to gain a new bid since the opening round. The potential winning bid for the D Block remained at $472 million with no one willing to ante up the minimum $519.4 million needed for a new bid. The license includes a $1.3 billion reserve price as well as the need for the potential winner to coordinate build out of the spectrum with the Public Safety Spectrum Trust Corp. to fulfill the FCC’s guidelines for creating a nationwide network serving the public safety community.
The auction is set to resume Tuesday with four, 45-minute rounds of bidding on the docket.
