FCC’s 700MHz auction clears $19B

Wed, 03/19/2008 - 10:28am
Brian Santo

The Federal Communications Commission (FCC) closed the most lucrative auction of public airwaves to date, receiving pledges totaling just under $19.6 billion for licenses to segments of the 700 MHz band.

Prior to the auction, the Congressional Budget Office estimated that the auction might take in $10 billion to $15 billion.

Bidding was anonymous; the identities of the winners will not be announced for at least three weeks. Most phone companies registered to bid, joined by a small handful of cable operators and WiMAX network builders Motorola and Clearpoint, along with an intriguing wildcard, Google.

Despite the financial success of the auction, the D block of spectrum, set aside for use by public safety organizations, failed to get a bid that met the $1.3 billion reserve price. Winning bidders would have been able to use the spectrum for commercial applications when not in use for public safety.

The FCC is evaluating options for the D Block. One of the likeliest options is to hold another auction, with new rules and conditions designed to make bidding on the D Block a more attractive proposition.

On the other hand, the success of the auction triggered the open access provision. Licensees of about one-third of the spectrum will be obliged to host any compatible phone using any type of software.

Google was the key proponent for including that rule. The company could, for example, start selling phones – possibly packaged with minutes – that can connect to the Internet to make use of Google features and services.

The 700 MHz band is currently being used by terrestrial broadcasters that will vacate the spectrum next February when they are obliged to cease transmitting analog signals. The spectrum is considered particularly valuable because signals in that band can be sent longer distances using less power, and signals are better able to pass through barriers such as walls; it means that a service using that spectrum can be more efficient and reliable.

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