The need for spectrum is becoming grossly apparent as bidding in the ongoing Federal Communications Commission Auction 97 has surpassed just about every estimate through one week of bidding.
Following round 20 on Thursday morning, total potential winning bids had topped $25.7 billion, with the latest round garnering 1,211 new bids totaling $1.6 billion. The auction earlier this week comfortably surpassed the $10.6 billion reserve amount set by the FCC, and continued to extend its position as the most lucrative spectrum auction ever conducted by the government agency.
The 20-megahertz J-Block license covering the New York City area remained the top bid-generator at just over $1.7 billion, even though that license has not received a new bid since round 17. The J-Block license covering the Los Angeles area, on the other hand, received three new bids during the latest round, pushing its total potential winning bid amount to nearly $1.3 billion.
Other large markets receiving new bids include the 10-megahertz I-Block license covering the New York City area, which received one new bid of $865.7 million; the J-Block license covering the Chicago area, which received one new bid of $839.9 million; and the 10-megahertz H-Block license covering the New York City area receiving one new bid of $735.4 million.
The FCC noted at the end of activity yesterday that it would limit new bids to $50 million, perhaps in a move to slow down the runaway bidding enveloping the auction.
Record-setting activity
The FCC’s Auction 73, which included a total of 52 megahertz of spectrum garnering bids surpassing the reserve price, was the previous high mark generating $19.6 billion in total winning bids in 2008. That spectrum was seen at the time as “beach front” due to the superior propagation characteristics of the 700 MHz band and became the foundation for LTE networks since rolled out by Verizon Wireless and AT&T Mobility. That spectrum also set the U.S. on its way to a leadership position in the rollout of LTE services as Verizon Wireless rapidly launched LTE services using that band, thus prompting rivals to quickly follow suit.
Auction 66, which included 90 megahertz of paired spectrum in the 1.7/2.1 GHz band, generated nearly $13.9 billion in total winning bids when it concluded in 2006. T-Mobile US came out the big spender in those proceedings, bidding nearly $4.2 billion on licenses that have become the backbone of its LTE network.
The FCC earlier this year generated a disappointing $1.5 billion in total bids during the H-Block auction, with Dish Network walking away with all of the 10-megahertz licenses in the 1.9 GHz band at the proceeding’s minimum reserve price.
Despite the ballooning bids, Auction 97 activity remains heated with all 70 original participants remaining in contention and all 1,614 licenses up for grabs having received at least one bid.
Bidder identities are being kept secret until the auction concludes, which could take some time. The 700 MHz auction stretched into 261 bidding rounds spread out over more than one month. The FCC said it will suspend Auction 97 bidding for the upcoming Thanksgiving holiday beginning in the afternoon on Nov. 26, with the proceedings picking back up on Dec. 1. The auction continues with four rounds per day, each lasting one hour.
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