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Bidding slowing down on 700 MHz C block

Late last week, after speculation that the reserve might not be met, the 700 MHz spectrum C block hit its reserve price of $4.6 billion. Yes, the auction is still official. But since Friday, the bid has only reached $4.74 billion. There are potentially several weeks remaining to bid — the auction won’t end until all licenses have been finalized. But indicators are that the C block might be all but done at this point.

The problem, it seems, is lack of competition. The only three real players in the C block game were Verizon, AT&T, and Google. Yes, those are rather large entities, and could potentially incite an enormous bidding war that would have the government licking their collective lips. However, the balance of interest was never there.

First, AT&T wasn’t really interested in the C block. They already acquired a national 700 MHz license from Aloha Partners. That deal was approved on Tuesday. The company has made it know that they plan to fill out their 700 MHz spectrum by bidding on regional licenses. The spectrum from Aloha covers 250 markets, so AT&T is pretty set in that regard.

Then you have Google, who many thought didn’t want to win in the first place. They were there as a symbolic gesture, pushing for openness on networks they do not control. Yes, it’s nice to think about a Google wireless service, but the company has other matters to attend. It’s entirely possible that Google pushed the bid over the $4.6 billion reserve mark because of the other player.

That leaves Verizon as the only truly interested party. Normally, that would play in their favor. Less competition usually means a better bargain. And in the end, Verizon will get a good deal on the C block. I’m just sure that they would have rather had the auction fall short of the reserve, and had the bidding re-started with no open-access provision.

It appears, though, that everyone is getting what they want. The two major U.S. carriers get their slices of the spectrum, and Google gets their open access provision in place. Of course, it’s Verizon that feels the brunt of that, while AT&T gets their spectrum with no restrictions.

So I suppose now it’s a matter of figuring out where the regional licenses are going.

[Reuters]