Locked and loaded: FCC finalizes rules & bidders for 700MHz

All systems are go for next week's 700MHz spectrum auction, which is expected …

Yesterday, the Federal Communications Commission released its final set of rules (PDF) and bidder list (PDF) for next week's 700MHz spectrum auction. Of the 266 applications originally received by the FCC, 214 bidders have made the final cut. There are no surprises in the final list, but the collapse of Frontline Wireless means that there may be no one bidding on the D block of spectrum.

The spectrum in the auction will be vacated by television broadcasters in February 2009 when analog TV transmissions cease, and is divided into five blocks. The A, B, and E blocks consist of regional licenses, which should make it feasible for bidders such as the Northeast Nebraska Telephone Company, James Valley Cooperative Telephone Company, Citizens Mutual Telephone Cooperative, and The Tri-County Telephone Association, Inc., to get spectrum for wireless Internet service.

The C and D blocks were expected to be where the action would be, and the bidding for the C block is still expected to be hot and heavy with the likes of AT&T, Google, and Verizon bidding. With Frontline Wireless out of the picture, there's a bit of mystery surrounding the D block, however. Whoever wins the auction for the D block will be required to build a national network that will be used for both commercial and public safety communications, making it less attractive to some would-be bidders.

Should the reserve prices for any of the blocks be unmet, those could be reauctioned at a later date, presumably with fewer requirements and a lower reserve price. It's also possible that the FCC might accept a lower bid for Block D should it be close to the reserve. Here's how the reserve prices stack up:

  • Block A: $1.807 billion
  • Block B: $1.374 billion
  • Block C: $4.638 billion
  • Block D: $1.330 billion
  • Block E: $903.7 million

Note that those are aggregate reserves, which means that the total of the bids on the smaller regional within blocks A, B, and E must exceed the FCC's mandated total.

Bidders will remain anonymous in this auction, and companies participating in the auction are forbidden from any sort of collusion. Bidders are not allowed to collude or otherwise share information with one another "about bids, bidding strategies, or settlements, which may include communications regarding post-auction market structure, unless they have identified each other on their short-form applications as parties with which they have entered into agreements under Section1.2105(a)(2)(viii)."

The auction begins on January 24 with two rounds of bidding, and will continue with three rounds of bidding each weekday until the auction closes.

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