Open access & a boatload of cash

It may not be over, but the 700 MHz auction already has two winners: the FCC and Google

It turns out the two most controversial licenses in the 700 MHz auction generated the least amount of excitement when it actually came down to bidding. While a single license covering Los Angeles generated as many as nine bids per round, the D Block shared public safety/commercial license attracted but a single bid. For the C Block nationwide license, bidding plodded along until the FCC's $4.6 billion reserve was met, triggering open access, after which bidding ground to a halt.

As the auction hobbled along in its final throes last week, it looked entirely possible that the D Block license would go untaken and the C Block would be divided into its eight component regional licenses. Still, with bidding rising just beyond $19 billion, the auction was most definitely a fund-raising success for the FCC despite the looming shadow of recession.

The big winner, however, is most definitely Google. The FCC kept the names of all of the various bidders secret in Auction 73, but Google is really the only participant that stands to gain regardless of whether it holds one of 1000-plus provisional winning bids. Google was in the auction to ensure that the FCC's open-access threshold was met on the C Block, and whether through active participation or passive monitoring, it accomplished its goal. Due to the pattern of bidding around the C Block nationwide license, Google most likely was a very active participant, as was Verizon Wireless, each bidding the other up every other round, according to research firm Stifel Nicolaus. That would explain why bidding came to a complete halt once the open-access reserve was met.

There's a definite possibility that Google is the provisional winning bidder on some of the wireless licenses, but there's also a possibility that the Internet giant made a timely exit from the auction as soon as open-access was assured. If Google played its cards right, the C Block will wind up in the hands of several different operators, all of which will have to build networks that Google is free to play on.