Game on: A Block hits reserve price, C Block action comes to abrupt halt

In addition to more money piling into the coffers of the U.S. Treasury, the latest round of bidding in the Federal Communication Commission’s 700 MHz auction has injected some intrigue into the proceedings.

Following a steady climb to the $4.6 billion reserve price set by the FCC that would trigger the open-access provision on the spectrum, bidding on the package of eight C-Block licenses covering the 50 states has ground to a halt in round 16 — just short of the magic price tag. For the third round in a row, a new bid failed to materialize on the C Block package, leaving the license at the $4.3 billion bid it received during round 13. The minimum bid now stands at $4.7 billion, just past the reserve price.

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Analysts have been trying to dissect the action on the C Block, attempting to figure out if the spectrum was luring a single bidder, presumably Internet giant Google Inc., which said prior to the auction that it would bid at least $4.6 billion for C-Block spectrum, or if Verizon Wireless was dueling with Google for the block. With bidding on the spectrum stumbling just short of the reserve price, the needle appears to be leaning more toward the former.

“Based on our analysis of various possible scenarios and use of the waivers, we would expect to know in round 16 today whether the C Block has been sold, unless there has only been (a) single bidder, possibly Google, that sits out a series of rounds,” noted research firm Stifel Nicolaus following round 15.

Of course, if a pair of bidders was interested in the spectrum, they could be using their bidding waivers to play possum in hopes the other blinks.

A Block blasts past reserve

The other significant news of the day was that the A Block hit its $1.8 billion reserve price following round 14, which makes the spectrum free and clear and no longer subject to a possible re-auction. The B Block hit its $1.374 billion reserve following round 10.

Speaking of the B Block, a pair of licenses in the block busted through the $3 per megahertz/potential customer covered mark during afternoon bidding, with the B-Block license covering Chicago sitting at $3.73 per MHz/pop and the B Block covering Norfolk-Virginia Beach, Va./N.C. area at $3.20 per MHz/pop, according to Optimal Markets Inc.

E Block action slows

The E Block — currently sitting at just over $709 million in potential winning bids — is expected to hit its $903.7 million reserve price shortly. Bidding on the E Block has slowed dramatically over the past several rounds, having picked up just over $18 million in new bids since round 10.

Of more dire consequence is the continued lack of action on the national commercial-public safety D-Block license, which collected more dust in afternoon trading. The top bid for the license remains at $472 million and no one has kicked its tires since the opening round. The license maintains a $1.3 billion reserve price that, if not met, would force the FCC to create a backup plan.

With the total number of bids slackening slightly — new bids dropped from 4,658 on Tuesday to 4,228 on Wednesday, though the value of new potential winning bids increased from $2.5 billion to $3 billion — the FCC said it will add another round of bidding starting Thursday and will cut the duration of the rounds from 45 minutes to 30 minutes.