Spectrum Auction 73 Passes $4.6 Billion
In the parlance of online auctions, the reserve price has been met, in this case for a swath of 700MHz spectrum being freed up by TV broadcasters in 2009.
Now the Auction 73 process becomes a whodunnit mystery. Someone pushed the bidding for the 50 state package to over $4.7 billion today.
Google had promised to bid at least that price provided the FCC imposed four conditions of openness on the auction winner. If Google were to win, they could make the spectrum available under those conditions without the FCC’s help.
Verizon and AT&T both would be logical competitors for the spectrum. Used for analog TV broadcasts, the spectrum could be converted into a wireless access technology with particularly intriguing usefulness in densely-packed urban areas where walls disrupt typical wireless radio signals.
Some have contended a failure to meet the reserve price would lead to the FCC removing “open-access rules Google requested” from the auction and running it again.
However, the FCC never approved an open access rule in the first place. Google asked for open access to the network as a condition of bidding the $4.6 billion reserve; they also requested open services, applications, and devices.
The FCC only approved the last two conditions, rejecting requirements for open networks and services. Now the thought process behind the bidding has to consider the future. If Google wins and supports wireless across the new spectrum, with its Android software and their hardware partnerships, AT&T and Verizon could see their business prospects falling into deep, smelly stuff.
That would make bidding an act of self-preservation. In order to avoid competing with Google, and a swath of ad-supported devices making calls and online services free, the current telcos may feel pressure to preserve the business model by gaining control of the spectrum.
If the bidding hits the next minimum listed by the FCC, we’re inclined to think it will be the telecoms pushing the price up for the spectrum.