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Verizon and AT&T Score in 700Mhz Auction

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Amidst frenzied media coverage and hopes for changes to the nation’s wireless infrastructure, the 700MHz auction came to a close this week after raising $19.59 billion. Much like a political election, the incumbents won, and talk of change will likely remain just that — talk. Verizon Wireless, a joint venture between Verizon Communications and Vodafone, won the majority of the C block with a bid of $4.74 billion and AT&T picked up 227 licenses in the B block of regional licenses, the FCC said this afternoon.

Since the reserve price of $4.6 billion on the C block of spectrum was met, Verizon will have to operate an “open network,” although how open that will be remains to be seen. Tellingly, Verizon’s statement about the results makes no mention of an open network. In total Verizon spent $9.63 billion on spectrum licenses while AT&T spent $6.64 billion.

The D block of spectrum that had been reserved for public safety but failed to meet minimum bid requirements in this auction will be set aside, and the FCC will figure out what to do with it later according to a statement from the agency. Was any of this unexpected? No, but it’s still kind of a bitter moment for all those hopeful proponents of a more open cellular network.

Update: Other than the existing players walking away with the lion’s share of the licenses, it’s worth noting that Google didn’t win any bids, nor did Cablevision. However, Cox spent $300 million in bids for spectrum focused in geographic regions where it already has a presence. Frontier Wireless, a partner of EchoStar, spent $711.8 million for spectrum in the E block, which could be used for mobile television.

Also of note was CenturyTel spending $149 million for regional licenses and Paul Allen’s Vulcan Spectrum laying down $112.8 million. If you have a spaceship, you may as well own the airwaves.

17 Responses to “Verizon and AT&T Score in 700Mhz Auction”

  1. Jesse Kopelman

    Anyone who knows how little of their current spectrum holdings AT&T and Verizon actively use can’t help but weep bitter tears. Just remember, those billions spent at auction is money that will not be spent on improving the operation of the existing networks. Good work FCC and Congress, it will hurt to sit down for quite a while!

  2. I am inclined to believe that the underperformance of Google during the 700 MHz spectrum auction could not be accidental.

    For one thing all of the upfront posturing and lobbying did help put conditions for an “open network” on the much coveted C block.

    The Google threat probably also caused the large incumbents to dish out more cash than they would have had to otherwise. Google did bid $4.6 Billion early during the auction. At the end Verizon wound up dishing out a whopping $9.63 Billion, while AT&T dished out $6.64 Billion.

    There could also exist the realization on the part of Google that the best way forward for Android is not through a mobile network of its own (i.e., limited devices), but rather through collaboration with the incumbents. This would potentially, and depending on how smart it continues to play the game, give it a much wider footprint.

    So rather than being disappointed I’d much rather focus on the promising changes this whole mellodrama has brought about:

    1. Various operators, including Verizon, have expressed the acceptance of Android
    2. AT&T and Verizon announced a move towards open access
    3. This week Verizon hosted its first and historical open development conference
    4. Verizon released its first open access device specifications today

    Let’s keep in mind that just one year ago these events were simply unimaginable.