Bidding For 700-MHz Spectrum Closes In On $4.6 Billion Reserve Price - InformationWeek

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Bidding For 700-MHz Spectrum Closes In On $4.6 Billion Reserve Price

The bidding on the FCC auction is secret, but Google, AT&T, and Verizon are believed to be vying for a slice of wireless spectrum.

Bidders in the FCC's 700-MHz auction were moving the nationwide C block toward the $4.6 billion reserve price Tuesday as the commission conducted the fourth day of the spectrum auction.

The reserve price is important because if it's met, it will trigger the development of an open wireless infrastructure in which consumers will be able to use a wider variety of devices and services.

At the same time, there's brisk bidding for licenses for many smaller regions. However, bids for the D block have stalled at $472 million -- a long way from the $1.6 billion reserve price the FCC has set for it. The D block could have dual commercial/public safety usage.

The bidding is secret, but large firms such as Google, AT&T, and Verizon are considered the most likely bidders for the nationwide C block.

"The question is, when you're bidding underneath the reserve price, are you really bidding?" asked David Spofford, president of the Telecom Expense Management Industry Association, in an interview. He explained that when the bidding is under the $4.6 billion goal, a deal won't be completed and companies don't have to put up any money.

"Once a threshold is reached, it might be the trigger that brings in Verizon and AT&T," he added.

Months ago, Google successfully lobbied -- against the initial resistance of Verizon and AT&T -- to obtain a pledge from the FCC that the C block would have an open section that Google envisions as being consumer friendly and "open" because previously incompatible devices, software, and services could be used in the network.

Exactly which companies are bidding in secret is still unknown, although the betting is that Google is involved. However, some don't believe that Google actually wants to set up its own wireless network. "Some people think that Google never had a real interest in [a network]," said Spofford.

He noted that much of the bidding for regional licenses may be coming from major wireless carriers. More than 200 companies have qualified to bid for the 700-MHz spectrum, which is attractive because its signals pass relatively easily through buildings and don't require many towers.

At the close of Monday's auctions, the C block had hit $3.42 billion -- up $1.27 billion from earlier bids and on pace to reach the $4.6 billion reserve price by the end of Wednesday.

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