Auction 73 Update: A Crucial Day for Google
Posted by: Olga Kharif on January 30, 2008
It’s crunch time in the government’s auction of wireless airwaves, and what goes down Jan. 31 could make-or-break chances for the creation of a new nationwide mobile-phone network in the U.S.
The Federal Communications Commission is auctioning off several chunks of airwaves, but the industry is especially transfixed by the fate of the “C” block. According to FCC rules, that slice is one of only two blocks that can be used to build a coast-to-coast network. Trouble is, the other block has lately had no takers. And the C block won’t make it off the auction block if the government doesn’t receive a minimum bid of $4.6 billion, pronto.
Problem is, after almost a week of bidding, only a couple of entities – likely Google and Verizon Wireless — have expressed an interest in C, believes Blair Levin an analyst with Stifel, Nicolaus & Co. and FCC auction data, and none of them has, so far, been willing to cough up that amount. Worse, no one has bid for block C at all during the last three rounds on Jan. 30. Because the FCC has stringent auction inactivity rules, the last day of January is crucial.
Bidders who don’t participate in a certain number of rounds will get disqualified. While bidders can use waivers to skip some rounds, Levin believes that at least one block C bidder may run out of waivers tomorrow. If that’s the case, and that company doesn’t place new, higher bids -- in other words, if the FCC’s $4.6 billion minimum price isn’t met and exceeded tomorrow – it could be that there will be no takers for block C, either.
Chances of the block having to be reauctioned will go up dramatically. Chances of a new, open wireless network rising up will plummet.