Lackluster bidding for 700 MHz 'C' and 'D' blocks

By Scott M. Fulton, III, BetaNews

January 29, 2008, 5:22 PM

With the first eleven rounds of bidding nearly complete in the FCC 700 MHz auction, the minimum bid for the prize package "C-block" that would trigger open access rules has yet to be met.

When the US Federal Communications Commission set forth its guidelines for bidders in its auction of spectrum presently occupied by UHF TV channels, it mandated that the winning high bidder open up any wireless services deployed on the prize "C-block" of that spectrum to the customer's choice of equipment. But it also made a curious rule stating that if the minimum bid of $4.6 billion had not been met or if no one bid, the mandate would be automatically scrapped and the rules revert to the original form.

That strange trigger raised the suspicion of Commissioner Robert McDowell, who warned that its very existence could create a cap that compels companies to bid low. After the first ten rounds, Comm. McDowell's suspicions may very well be validated. By late afternoon Tuesday, a check of the FCC Web site revealed the current high bid to be just under $3.38 billion for the nationwide license for the C-block. The identity of bidders is kept secret by the FCC.

There's even worse news for the "D-block," the band of spectrum mandating that the winning bidder work with a public/private partnership to provide emergency services to first responders. Thus far, only one bidder has been recorded for the D-block: a first-round provisionally-winning bid (PWB) of $472 million. The minimum D-block for Round 12 is set at $519.2 million.

Though weeks may actually remain in the bidding process, if the FCC were to close its bids today, it will have generated only $7.83 billion. It had anticipated to raise a minimum of $10 billion in revenue.