700 MHz auction set to begin on Jan. 16
A much-anticipated auction of 1099 wireless licenses of valuable 700 MHz spectrum will begin on Jan. 16, 2008, the FCC said in a public notice released on Friday.
Wireless industry experts have projected that the 700 MHz auction will generate between $10 billion and $20 billion in bids. In the public notice, the FCC set an aggregate reserve price of more than $10 billion, with the nationwide 22 MHz C Block license—the license requiring open-access technologies that allow any device to be connected to a wireless network—having an unprecedented reserve price of $4.6 billion.
During the proceeding that led to the FCC’s July decision on the 700 MHz auction rules, Internet search-engine giant Google vowed it would bid $4.6 billion for the C Block license if the commission approved rules for the spectrum mandating that the auction winner use the frequencies to offer a wholesale network. The FCC declined to include such a rule, only stipulating that the auction winner comply with the open-access rules.
“The biggest question is Google, because they said they would bid on that [C Block spectrum] if they got the resale requirement, and they didn’t get that,” said Roger Entner, senior vice president of communications for IAG Research. “The question is whether Google was trying to push the FCC into [the wholesale requirement] and they want it either way, or if they will walk off pouting.”
Aside from Google, likely bidders in the auction will be “the usual suspects”—existing wireless carriers, cable providers and satellite firms. Even if Google doesn’t participate, Entner believes the nationwide C Block spectrum is attractive enough that existing wireless carriers will make the bids necessary to meet the $4.6 billion reserve price.
The nationwide 10 MHz D Block auction winner will be required to negotiate a public-private partnership agreement with a national public-safety licensee—an entity that will bring 10 MHz of public-safety spectrum to the deal—to build and maintain a nationwide broadband network that meets public-safety standards. This obligation makes bidding on this spectrum “tricky,” Entner said.
In addition to setting the starting date for the auction, the FCC asked for comments regarding specific procedures associated with auction policies on items such as anonymous bidding. Comments are due on Aug. 31, and reply comments are due on Sept. 7.
