Almost $3B Bid After Two Rounds of Spectrum Auction

Bidding Likely to Go On for Several Days or Weeks

By John Eggerton -- Broadcasting & Cable, 1/25/2008 11:07:00 AM

After two rounds of bidding in the Federal Communications Commission's 700-megahertz spectrum auction, a total of $2.77 billion had been bid for five blocks of spectrum, up $353 million (or almost 15%) from the first round. The third round is scheduled to begin at 10 a.m. Friday, with bidding likely to go on for several more days or even weeks as the prices to continue to rise.

A previous auction of advanced wireless spectrum lasted some six weeks.

The FCC is looking  ultimately to raise at least $10 billion from the 700-MHz auction (auction 73), with the money to be used primarily to fund the digital-TV-to-analog converter-box program, first-responder communications and to help out the federal treasury.

There have been two bids so far on a package of C-block licenses sufficient for a nationwide network, the first for $1.037 billion, the second for $1.244 billion, which was where it stood Friday morning. The minimum bid for that block in the third round will be $1.493 billion.

The D block, which is a nationwide footprint for a public-private network shared with first-responders, drew one bid of $472 million. The minimum bid for round three was $531 million.

Bidding is anonymous to prevent anticompetitive activity.

Among the bidders for the analog TV spectrum, which is being reclaimed from broadcasters in the switch to digital TV: Cox Communications, Google, Advance/Newhouse Communications, AT&T and Bresnan Communications.

The spectrum is considered beachfront property for advanced wireless services like broadband delivery because of its ability to go through and around obstructions.

If the FCC does not meet its reserve price on any of the five blocks, the block, or blocks, will be rebid in a separate auction. The money has to be turned over to the treasury by June 1.

The C block  has open-access conditions on it that would require the winner to open the network to outside devices and applications. Google may be eyeing that spectrum to launch its own network or, alternately, it may want to ensure that the block meets its $4.6 billion reserve price. If it doesn't meet the reserve, the open-access conditions will be removed when the block is rebid.