Some Spectrum Auction Speculation
From Saul Hansell at The New York Times;
“After four more rounds of bidding today (Wednesday), the total bids reached $11.6 billion. That’s good news but for one little detail. Included in that total is $4.3 billion for a block of frequencies called the C block. This represents the single most attractive license in the auction because it would allow for nationwide service. The government has set a reserve price of $4.6 billion for those frequencies. If the bidding doesn’t hit that level, they won’t be sold and the auction will likely be seen as a failure.”
Saul offers us a couple of additional auction facts and then begins to speculate;
“Since the auction began last week, the price of the C block has been increasing steadily. But after it hit $4.3 billion this morning, there were no more bids in the other three auctions of the day. That raises the possibility that no one really wants to pay the $4.6 billion price tag. Google has said that it would bid $4.6 billion for the spectrum, so if it decided to stop at $4.3 billion, it would have a fair bit of political heat to take.”
I think we all know that we don’t know who is bidding and how much. Saul does mention that, “in general” whoever is bidding is, more or less, required to continue bidding except that high bidders don’t have to increase their bid and a bidder has three waivers with which to not bid in a specific round.
I’ll imagine that by following the auction you can determine that there have been no more than one bid on the “C” block each day. After further speculation, Saul finally proposes;
“If the bid for the C block doesn’t rise Thursday morning, that will mean that there is only one company left in that part of the auction. Under the rules, then, that company could wait until just before the auction ends — which well could be weeks from now —before bidding the $4.6 billion to win. There is a modest incentive to do this. The increment of the next bid declines as the auction progresses. Now, the next bid in the C block must be at least $4.7 billion, so a frugal company might save $100 million by waiting to cross the finish line.
If the $4.6 billion level isn’t reached, the F.C.C. will likely remove the open-access rules Google requested and hold a second auction for the C-block frequencies.”
My take is, that Google said they’d meet the reserve and they will. If by meeting it, they win, all the better!
Update: This will end a bit of Saul’s speculation - - “A bid on the largest portion of public wireless airwaves, now being auctioned by the federal government, reached $4.7 billion on Thursday, triggering a provision to allow any device or software to work on that spectrum.”
Tags: 700-MHz-auction, Google-Bids-On-Spectrum, mobile-wireless-high-speed, Radio-Spectrum-Airwaves, spectrum-auctionRelated Stories
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Jan 31, 2008 at 1:04 pm
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