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Spectrum Auction Up to $3.7B in Early Action

Three bids so far for most attractive nationwide coverage package 1/25/2008 07:00:00 PM Eastern



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As of Friday, after four rounds of bidding, there were 969 new bids totalling $3.7 billion for five blocks of beachfront spectrum being reclaimed from analog-TV broadcasters in the switch to digital. That's a half-billion dollars over the round that ended just before.

The bidding is anonymous, but a new minimum bid of $1.792 billion was offered for the package of licenses covering 50 states (the so-called C block) that companies like Google are eyeing for a possible new network that could deliver wireless Internet service. On Monday (Jan. 28), when bidding resumes, the new minimum bid for the block will be $2.15 billion.

The eventual winner of the C block in what is likely a weeks-long auction will have to bid at least $4.6 billion or the spectrum will be reauctioned without its current open-access conditions.

That's because the auction has to raise at least $10 billion for the federal treasury and programs, including paying for the digital-TV-to-analog converter-box coupons and reducing the national debt.

There have been three 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, and the $1.792 billion bid, which was where it stood Friday afternoon.

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There was still only one bidder for another nationwide swatch of spectrum—the so-called D block—that could also be used for a national advanced wireless network but one that would have to be shared with first-responders when they needed it.

That bidder—all bidding is anonymous—did not raise its bid from round two's $472 million. But the FCC lowered the minimum bid on that block for the fourth round of bidding, from $531 million to $525 million.

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

Among the qualified bidders, in addition to Google, are Cox Communications, Advance/Newhouse Communications, AT&T and Bresnan Communications.

The National Telecommunications & Information Administration, for one, has already doled out some of the money it is getting from the auction. So it is eager to have the actual money to back the bucks the NTIA has borrowed to pay for its $1.5 billion program to supply coupons toward the purchase of converter boxes.

It began accepting applications for the boxes Jan. 1 and plans to start handing out the coupons next month.



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