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As expected, Verizon wins C-Block

Well, that didn’t take too long. After months of speculation, the results of the 700 MHZ auction are in. And you know what? They aren’t too pretty. See, the government raked in nearly $20 billion on this deal. The two largest wireless carriers in the nation, Verizon and AT&T, put up $16.3 billion combined. So it looks like all hopes of regional companies expanding and new names hitting the cellular market have just crashed and burned. All this auction did was make the rich richer.

It was kind of predictable, really. In talking about the auction when the C-Block hit the reserve price, I felt little doubt that Verizon had won it, and that AT&T hadn’t even put in a bid. Well, that’s the case. Verizon was only bidding against Google in that block, and all Google wanted to do was to get it above the reserve price. Because of the lack of competition, Verizon got it on the cheap.

But they spent an overall $9.63 billion, so yes, they picked up licenses elsewhere. Verizon was actually the largest winner in the A-Block, which covers medium-sized licenses. And on top of that, they took 77 B-Block licenses, which are the really small ones.

Speaking of B-Block, this is where AT&T dominated. See, they already had huge chunks of 700 MHz spectrum from their purchase of Aloha Partners. So they were able to stay away from the big chunks, and just feed off the smaller chunks. All this did was take away from the smaller companies who could only afford smaller chunks.

Of our prepaid providers, MetroPCS picked up a Boston license for $360 million. And that’s it. Leap Wireless was shut out. Same for Alltel.

So was it a success? Well, if you consider the two largest companies taking over two-thirds of the auction, yeah, it was a success. But as far as creating more competition, it failed horribly.

[Business Week] [CNN Money]