Optical/IP Networks

FCC Auctions Hit $19B

The credit crunch be damned! The Federal Communications Commission (FCC) 's 700 MHz auctions have blasted through the $10 billion to $15 billion overall that the agency originally wanted for the spectrum, reaching more than $19 billion in bidding today.

The most desirable "beachfront" spectrum -- an eight-license, nationwide C band offering -- has now raised more in bids for the individual licenses than as a package, even though earlier bidding suggested it would sell as a package. An applicant that wants the continental C package will need to put up a bid of nearly $5 billion to secure as a whole it next round.

As the bidding runs to 40 rounds, the intensity is ratcheting down. Bidders, however, continue to fill out capacity requirements by adding on smaller licenses, generally in the E band.

The pattern of bidding on the E licenses does suggest local and national carriers bidding for extra capacity. Examples include the continued small bids on the Burlington, Vt., E band and the $21 million for the Boston-Worchester E band. The FCC, however, won't reveal the names of the bidders until after the auction is closed.

Even the FCC had been worried that the state of the economy could have an affect on the auction, with chairman Kevin Martin suggesting as much before the auctions started. This has turned out be far from the case, however. (See The 700 MHz Race .)

The only real disappointment for the FCC is the failure of the nationwide D block, which was intended for public safety applications, to take off. This hasn't shifted since an original bid of $472 million for the band.

— Dan Jones, Site Editor, Unstrung

robmx 12/5/2012 | 3:48:26 PM
re: FCC Auctions Hit $19B Without the current economic climate this Auction should have hit $60 Billion. Lots of bidders that didn't qualify didn't because they could not raise the funds they expected. Many actual bidders are in the same fix and others are just gun shy remembering the debacles of 2000.

Remember some pundits expected $100 Billion for this same spectrum that was supposed to be acutioned in 2000. And at that time similar spectrum in the UK and Germany fetched $35 and $45 Billion. Combined the UK and Germany are not one half the US size so $100 Billon was not unjustified in 2000. Add inflation to $100 Billion and a current figure would be more like $170 Billion.

$10 Billion and $15 Billion look pretty anemic compared to what coulda woulda have happened in June of 2000 if there was no Telecom meltdown earlier in 2000 caused by ... ta da... the UK and German auctions and the resulting second look the credit markets and stock markets gave to Deutsch and British Telecom.

Auction 73/76 still can hit $23 Billion if in Auction 76 the D block, freed of restrictions, brings in $3 Billion. It could if the FCC divides it up into 176 licenses.
joset01 12/5/2012 | 3:48:20 PM
re: FCC Auctions Hit $19B Yeah, its a lot compared to the real world figure of the $13.7B figure for AWS in 2006. Its a lot compared to the FCC predictions. Sure they could get more, still might in fact, but its not a bad haul.

Lots of things might be different without economic climates but we're never going to be without them so its not worth going into that kind of blue sky speculation.
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