30 January 2008

Are Telcos Trying to Sabotage Open Access Spectrum Auction

It appears that bidders on the C-Block spectrum are colluding to keep the bid price low enough to eliminate open access rules.

Though $8.66 billion has been raised in 12 rounds by the auction so far, it still has a long way to run before it loses steam -- more than 1000 separate bids were submitted in Tuesday’s closing round. The D block still has plenty of time to attract more bidders, particularly as the price of the C block and other regional licenses escalate. (For complete auction results see the FCC’s Auction 73 page)

Such escalation, though, appears to be exactly what the C-block participants are bent on preventing. The C-block bidders slowed down their pace Tuesday, taking turns bidding on the license every other round. That not only prevented the license from crossing the $4.6 billion reserve threshold, it also served to knock down the minimum bids required to take the lead in consecutive rounds. According to the FCC’s rules, the minimum bid falls each round a license fails to attract a new bidder. The strategy has definitely slowed down the momentum of C-block bidding, but even at the rate of one bid every other round, the license will clear the reserve ceiling in the next two days. To secure the top bid in Wednesday’s open Round 13, a participant will have to pony up $4.29 billion.

Also the Block D auction seems to be stalling, my guess is that this is a result of Cyrene Call corruption issues. This block is supposed to be shared with public safety agencies, with said agencies having complete control in an emergency, and to be open access.


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