Bids near $8.7B after a dozen rounds: C Block inches closer to open-access trigger

Prior to the gavel falling on the beginning of the Federal Communication Commission’s highly-anticipated 700 MHz spectrum auction, word on the street was that the FCC would be looking at between $10 billion and $15 billion in total winning bids for the 1,099 licenses up for grabs. That forecast was pushed more toward the low end of the range in the weeks leading up to the auction as a sagging economy was expected to put a damper on typical free-spending ways.

Well, after a dozen rounds, the FCC is well on its way to at least matching the low-end of those forecasts; bidders have ponied up nearly $8.7 billion in potential winning bids, with the four rounds on Tuesday adding more than $2.5 billion to the pot. At this pace, Auction 73 could well surpass the $10 billion mark by lunch time Wednesday.

And as a reference, the advanced wireless services spectrum auction in 2006 lasted 161 rounds.
Click here for complete 700 MHz auction coverage.

Tuesday afternoon bidding, comprised of rounds 11 and 12, each saw more than 1,000 new bids that for round 11 totaled $450.9 million, and for round 12 added another $822.9 million. This was on top of the $1.3 billion added during the morning rounds nine and 10.

After failing to garner a bid during round 11, the package of eight C-Block licenses covering the 50 states picked up a new bid in round 12 that pushed the potential winning price to nearly $3.8 billion, or 83% of the reserve price of $4.6 billion that would trigger the open-access provision on all C-Block licenses. The minimum new bid for the license now stands at $4.3 billion.

While the C Block has attracted the most money, a pair of B-Block licenses has attracted the most coin per MHz/pop. According to Optimal Markets Inc., the 12-megahertz cellular market area license covering the Chicago area is fetching $2.44 per MHz/pop, while the B Block covering Norfolk-Virginia Beach, Va./N.C. is at $2.37 per MHz/pop. For comparison, the C Block was at 61 cents per MHz/pop after round 12.

Among the A-, B- and E-Block licenses up for bid, those covering the New York City area continue to draw the highest bid. The A Block license, which failed to receive a bid during rounds 11 and 12, sits at $429.4 million, while the B Block, which picked up its latest bid during round 11, was at $368 million.

It was status quo for the national commercial-public safety D-Block license, which again failed to attract a bidder. The license remains at the $472 million bid it received in the opening round, which is just over one-third the $1.3 billion reserve price set by the FCC.