C block bidding nearly at reserve price

While we still won’t know the bidders until after the auction is over, all indications are that the C block of the 700 MHz spectrum — the “open access” block — is nearing its $4.6 billion reserve price. Had it not reached the reserve price, the FCC could have opted to re-hold the auction, possibly with different provisions. Meaning, of course, that they’d auction it off without the open-access regulation. But once it hits $4.6 billion, it’ll be official.

We’re reminded, though, to not think that just because bidding has neared the reserve price that it will necessarily meet it.

“The question is, when you’re bidding underneath the reserve price, are you really bidding?” asked David Spofford, president of the Telecom Expense Management Industry Association, in an interview. He explained that when the bidding is under the $4.6 billion goal, a deal won’t be completed and companies don’t have to put up any money.

So while the auction is on pace to meet the reserve price on Wednesday or Thursday, it might linger for a bit.

(Purely a hypothetical on my part: Many have said that Google doesn’t intend to build a network. Even so, they could push the auction over the reserve limit, and then let AT&T and Verizon battle it out for the spectrum. It would still be open access, so they’d win on that front. I somehow doubt both AT&T and Verizon would back out after the block hits the reserve price.)

The D block is in a bit of trouble, though, still sitting at the $472 million bid we saw on the first day. The reserve for that block is $1.6 billion.

[Information Week]

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