The end is near: LMDS auctions bring lower bids than expected

The FCC's latest spectrum auction continued to limp toward its final round last week as most of the top local multipoint distribution services markets remained in the same hands. Not surprisingly, densely populated markets such as New York, Los Angeles and Chicago grabbed the highest bids.

One anomaly to develop in later rounds has been the escalation of LMDS licenses for some sparsely populated areas. Based on price per pop, the top five markets all are in New Mexico.

"Auctions are a very iterative process like the stock market and may or may not be related to actual events," said Daniel Ernst, an analyst with The Strategis Group. "Some of these could be small but dense markets, and that brings the overall network cost way down."

The auction is expected to bring in far less than originally predicted because of the lack of telco participation. As of March 18, after 85 rounds, bidders had put up slightly more than $537 million for more than 900 licenses. Several dozen licenses also have yet to receive any bids.