700MHz Auction Raises Record Amount, D Block Doesn’t Sell

The 700MHz spectrum auction closed on Tuesday after raising more money than any other FCC auction.

After eight weeks and 261 rounds, the auction netted $19.6 billion, far more than the projected $10 billion.

Despite two months of activity, however, the D Block – intended for a public-private first responder partnership – did not sell. On the other hand, users will be able to attach any device to the C Block because the open access provisions were triggered.

Names of the winning bidders won’t be released for another 10 days or so, although it’s believed Verizon Communications Inc. and AT&T Inc. will come away with sizeable chunks of spectrum. The 700MHz band is comprised of former UHF airwaves, which could be used for WiMAX and other broadband wireless technologies.

And now that the auction is over, Congress is slated to hold hearings in April on the D Block. Democratic representatives have said they want to talk about facilitating a public-private partnership. The top bidder for the D block, Frontline Wireless, folded amid reports that it couldn’t afford the immense down payment.

FCC Chairman Kevin Martin next is expected to circulate new rules governing a re-auction of the D Block. The block did receive one bid in the auction’s first round, but that number was lower than the reserve price. Telecom analysts for investment bank Stifel Nicolaus said Martin likely will call for a reduced reserve price and less stringent build-out requirements. The D Block included an obligation to work with government agencies to build out a joint network and required a non-refundable down payment.

Spectrum won’t be available to the auction winners until February 2009 at the earliest. Research firm TeleGeography noted that winning bidders will be saddled with hefty license fees, which would be passed on to consumers through higher tariffs. Winners must pay the U.S. Treasury by June 30.