FCC Auction Nears End, but Questions Abound
The Federal Communication Commission's auction of valuable 700 mhz radio spectrum is entering the final stretch. As bids trickle in for the five blocks of spectrum, a couple things are certain: The auction has raised $20 billion, double what the FCC expected to raise from the auction. And the block reserved for an interoperable public safety network likely won't meet its minimum bid requirement.
That last point, perhaps, is the more important issue for industry watchers, in that much of what happens next depends on what the FCC will do with the so-called D-block.
Specifically, the FCC won't reveal winners of any of the other blocks until it decides what it will do with the D-block. One scenario would be reauctioning the D-block with a lower minimum price and more flexible conditions. The C-block, spectrum set up for commercial use, was designed with conditions that it must be built out as an open network. Most industry watchers and sources on the Hill say there will be a lot of pressure from Congress to get the FCC to reveal the winners of the non-D blocks and get the proceeds from those auctions deposited into the Treasury.
It also won't be clear when qualified bidders of any of the blocks will be able to talk about the auction, bound by anti-collusion rules that have become confused by the unexpected failure of the D-block.
"Although both Congress and the FCC will want to re-auction the D-block quickly, there are a number of tough issues that will need to be addressed, which will take time," Stifel Nicolaus analysts Blair Levin and Rebecca Arbogast wrote in a research report today.
They predict the auction will end next week and the FCC will announce how it will deal with the public safety block the following week. By early April, the analysts expect the anti-collusion rules will be lifted.
At that time, we will know winners of the auction. The analysts said Verizon and AT&T are likely to be the biggest winners of the auction, with Google being a "willing loser."
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