Spectrum Auction: The Cash Cow is Slowing Down

17 days and 81 rounds into the 700 Mhz spectrum auction and the total bid amount is up to a whopping $19.5 Billion!

The question keeps popping up: who are the top contenders? The auction is silent so we really will not know until the auction ends. There are 214 approved bidders. Most industry experts speculate that Verizon and AT&T have been the most aggressive of the bidders. Some have even speculated that Google dropped out. Although, frankly, these allegations seems a little unfounded.

Block C is the most sought after chunk of spectrum because it is national. While some speculate Verizon has been aggressively pursuing this block, others expect a more tricky move to bid on the cheaper regional blocks.

The winner of the other national block, Block D, would have to build out a network that would have to be shared with the government to offer public safety services. Not surprisingly, the bidding for Block D has not gone as wished for by the FCC – still about $800 Million from the $1.3 Billion reserve price – and the Block will likely be put for bid at a later date.

Auction: Today Ends at $11.6 B

Auction Day 4 Summary

This is what the little cash cow looked like at the end of yesterday's rounds.

This morning, after round 14 the tally was up to $10.2 Billion (ch-ching!).

The other news is that at last one bid has been made for block D. The bid came in just under $0.5 Billion. This block is the one the FCC has mandated it must be shared with a national public safety communications network.

700 MHz Spectrum Auction Bid Tracker

It's day three of the auction. I've started tracking the amoung of $ the federal government will raise in the auction. Selling air sure is a nice business to be in!

Bidders will not be disclosed until the end of the auction, but Google, Verizon Wireless, and AT&T are reportedly in the race, having qualified for it prior to the start of the auction.

Redefining the “Cloud” (i.e., add wireless)? Too early to tell

So what of the news that the FCC will auction new spectrum under the condition that those who venture into the challenging space of building, maintaining and operating a network keep the last mile open to any device?

Well, for starters, if it comes to fruition this ruling could have a major impact on the wireless industry: more consumer power, less restrictions on proliferation of applications, less device fragmentation with better devices… and on and on. At last, a stride towards an open environment has been taken. Great.

However, while this ruling could result in something bigger than the Telecom Act of ’96, today it is still too early to tell what the real outcome will be. Fully aware of the threat that this poses to the them, the incumbent operators have already been busy at work in Washington for some time, and will continue to be until the fat lady sings. The lobbying (they have been at it since before Sergei and Larry were born) and staying power of the operators is not something to be underestimated.

Finally, even if this ruling were to be successfully implemented by the FCC, the incumbents not only have the deep pockets to compete in the bidding war with Google and co., or whomever. They will fight to the nail and teeth for they have much more to lose. They might even give Google a little bit of its own medicine: pay ludicrous amounts of money for the spectrum and do nothing with it simply to keep the competion out.