FCC Tops $10B Total from 700-MHz Spectrum Auction

$11.5B Bid Through 16 Rounds; Still No Progress on D Block

By John Eggerton -- Broadcasting & Cable, 1/30/2008 7:20:00 PM

The Federal Communications Commission topped the $10 billion it needs to collect from its 700-megahertz spectrum auction, although it still needs to meet its floor prices for each block of spectrum before that number becomes official.

But it wasn't time to pop the champagne corks just yet. Each block of spectrum must meet its reserve price or the bids will be scrapped and the spectrum reauctioned. Still, it argued for the FCC's ability ultimately to reap sufficient funds to satisfy Congress, which set the minimum and has already spent some of the money, which is due to the treasury June 1.

The total after 16 rounds of this prize fight -- the prize being beachfront wireless spectrum -- was $11.5 billion, including a $4.29 billion bid for the C block of 50-state licenses. The floor price for that block is $4.6 billion, but the bid has not moved for several rounds.

There was still no new bid on the D block.

The spectrum is being reclaimed from broadcasters transitioning to digital TV and must yield at least $10 billion to meet Congress' allocation of the money, the majority of which is going to the treasury and the rest, another $3 billion or so, toward paying for a DTV-to-analog converter-box-subsidy program and first-responder communications upgrades, among other programs.

The so-called C block of 50-state spectrum licenses especially packaged for a national network will have to meet the $4.6 billion floor price or it will have to reauctioned, and without open-access conditions that were placed on the block.

But another block of licenses for a national network, the D block, continued to draw no new bids for after a dozen or so rounds round at $472 million, far short of its $1.3 billion floor price. The commission continued to hold at a minimum bid of $519 million for the next round. The D block network must be shared in a public-private partnership with first responders, which makes it less attractive.

Legislators under post-Sept. 11 pressure to improve emergency communications have promised to step in to help the FCC reauction that spectrum if it does not meet that floor price.

If any of the five blocks of spectrum do not meet their floor bids, each will be reauctioned.

The next round opens Thursday morning. The auction began Jan. 25.