Posted by: Olga Kharif on January 28, 2008
Now that various players have had four days to place bids for various chunks of airwaves that the Federal Communications Commission (FCC) made available in Auction 73, it appears this auction isn’t going according to FCC’s plan.
I went back to look at what bidding looked like at FCC’s Auction 66 — another overhyped auction of wireless airwaves that took place back in 2006. That auction ended up netting nearly $14 billion after 161 rounds of bidding that took place over 29 days. At Auction 66, initial bids were also quite low, but kept rising at double digits after each round. Back then, it also became clear relatively quickly which pieces of spectrum the buyers were after, and which pieces of spectrum no one wanted to touch.
If Auction 73 proves to be at all similar to Auction 66, open wireless networks initiatives may be in trouble. Right now, bidders don’t seem to be overly excited about chunks of spectrum with the FCC-mandated open provisions. Networks built on this spectrum would have to allow all software and devices to connect to them. Search king Google has been begging Washington to impose open conditions on the spectrum for months. Lots of other companies, including eBay and Dish, lobbied in their favor as well.
But bidding for these chunks of spectrum, nationwide C and D blocks, is going slowly. Already, analysts speculate that block D may end up without any takers. As wonderful as open network ideas may sound to consumers, it appears that they don’t sound like music to the ears of wireless businesses — at least, at this stage of the bidding game.