C-Block Bids Well Below Those for B-Block Spectrum Without Open Access
Auction bidding for the C-block with its open-access mandate has trailed that for the A and B blocks considerably. Meanwhile, Verizon Wireless apparently made a move on the C- block throughout Monday’s bidding, launching a high bid for the C-block, which analysts generally agreed had been headed into Google’s hands.
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Auction experts are guessing that Verizon bid enough for the individual regional licenses that the total bid surpassed the package bid for a national C-block license. In another development, the FCC postponed round 31 of the auction until Tuesday, in a 4:11 p.m. announcement citing “a delay in the availability of complete downloadable reports.” Several sources questioned whether a software glitch could have led to the postponement. The auction was postponed once before, Jan. 25, the second day of bidding.
Late Monday, B-block spectrum was fetching an average price of $2.60 per MHz per POP, nearly four times the 76 cents offered by the high bidder in the C block. A-block spectrum, at $1.09, was also attracting higher prices than the massive C-block licenses. FCC Chairman Kevin Martin last week hailed the C-block sale as a success after a bidder, by most guesses Google, surpassed the minimum price for the spectrum.
Verizon Wireless “wants to send a message that open access does have an impact on pricing,” said Tom Peters, a partner at consultant firm Wireless Strategy. “I believe it was Verizon and AT&T competing for the B-block licenses that drove up the price to help make their point.” “Chairman Martin hailed the C-block as a success story, but look at the prices so far,” said a wireless industry attorney. “I don’t see the C-block catching up with B.” Another industry attorney said the C block is at best “a limited success story.”
Rebecca Arbogast, a Stifel Nicholas an analyst, said several explanations are possible for the differences in bids between the blocks. “It could also be a function of bidding strategies and spectrum needs that are more finely targeted on particular markets,” she said. “But remember that it’s not over until it’s over.”