700 MHz Auction: As open access nears, bidders back off
C block $800M shy of triggering open-access provisions of 700 MHz auction; public-safety spectrum still neglected
Google will have to wait at least another day before it can start performing celebratory cartwheels. The price of the nationwide C-block license in the 700 MHz auction ticked upward today, but it got nowhere near the $4.6 billion reserve price necessary to trigger the open-access provisions of the highly valuable spectrum property -- a stipulation Google lobbied long and hard for. Instead it ended the day with a $3.78 billion provisional winning bid.
The C block is one of two high-capacity nationwide licenses up for sale, but it is by far the most valuable one. The other license, the D block, comes with requirements to launch a shared public-safety/commercial network that will support thousands of local law enforcement and emergency services’ crisis communications. Due to those restrictions, the FCC knew the license wouldn’t be as attractive as the similarly sized C block to prospective operators, but it might have misjudged how unattractive it might be. To date, the D block has garnered but a single bid of $472 million during the first round of the auction.
Though $8.66 billion has been raised in 12 rounds by the auction so far, it still has a long way to run before it loses steam -- more than 1000 separate bids were submitted in Tuesday’s closing round. The D block still has plenty of time to attract more bidders, particularly as the price of the C block and other regional licenses escalate. (For complete auction results see the FCC’s Auction 73 page)
Such escalation, though, appears to be exactly what the C-block participants are bent on preventing. The C-block bidders slowed down their pace Tuesday, taking turns bidding on the license every other round. That not only prevented the license from crossing the $4.6 billion reserve threshold, it also served to knock down the minimum bids required to take the lead in consecutive rounds. According to the FCC’s rules, the minimum bid falls each round a license fails to attract a new bidder. The strategy has definitely slowed down the momentum of C-block bidding, but even at the rate of one bid every other round, the license will clear the reserve ceiling in the next two days. To secure the top bid in Wednesday’s open Round 13, a participant will have to pony up $4.29 billion.
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