FCC Closes 700MHz Auction at $19.5B

Bidding in the FCC’s 700MHz auction closed March 18 after the auction raised a record $19.6 billion over 261 bidding rounds. The winners of the spectrum have not been disclosed as yet by the Federal Communications Commission.

The results of this single spectrum auction surpass the $19.1 billion combined total raised by the FCC in 68 other auctions over the last 15 years. The proceeds will be transferred to the U.S. Treasury by June 30, earmarked to support public safety and digital television transition initiatives.

The spectrum auction is part of the transition to digital television that will culminate in all television signals switching from analog to digital on Feb. 17, 2009.

Bidding for the so-called beachfront spectrum in the C block closed at $6.5 billion, almost $2 billion more than the minimum threshold bid of $4.6 billion. The airwaves are considered particularly well-suited for broadband because the signal properties can travel great distances and penetrate mountains, buildings and walls.

The FCC also placed conditions on the sale of the C block spectrum, requiring the winning bidder to build an open network to which users can connect any legal device and run the software of their choice.

The spectrum auction process is disputed. Read more here.

Before the auction began in January, Google committed to meeting the minimum bid in the C block. AT&T and Verizon were also interested in the spectrum. Although the FCC did not say when the winner would be announced, the current speculation is that the FCC will release the information by the end of March or early April.

“The open platform will help foster innovation on the edge of the network, while creating more choices and greater freedom for consumers to use the wireless devices and applications of their choice,” FCC Chairman Kevin Martin said in a statement. “A network more open to devices and applications can help ensure that the fruits of innovation on the edges of the network swiftly pass into the hands of consumers.”

One Disappointment

The only disappointment in the auction, Martin said, was the failure of a bidder to meet the $1.3 billion reserve price established for an interoperable public safety network to be operated by a public-private partnership.

“I believe the Commission remains committed to ensuring that we work to solve public safety’s interoperability challenges,” Martin said in a statement. “Because the reserve price for the D Block was not met in the 700MHz auction, the FCC is now evaluating its options for this spectrum.”

Rep. Ed Markey (D-Mass.), chairman of the U.S. House Subcommittee on Telecommunications and the Internet, immediately announced that he would hold a hearing to review the auction process after the winning bidders are announced.

Markey said in a statement he was “eager to ascertain the extent to which new entrants have succeeded in obtaining licenses through this auction. Providing new opportunities for competitive entry into the wireless marketplace and offering consumers greater choice is a key objective of wireless policy and for this auction in particular.”

Gigi B. Sohn, president and co-founder of longtime FCC watchdog group Public Knowledge, said in a statement the auction produced “some good results” for consumers.

“While the open access provisions weren’t all that we would have liked, consumers will have the benefit of some device and applications flexibility that they wouldn’t have had otherwise,” Sohn said.