FCC wireless auction nearing $20 billion

February 8, 2008, 9:00 AM UTC

By Michal Lev-Ram

Despite worries that economic uncertainty would hamper bidding, the Federal Communication Commission’s wireless spectrum auction has raised nearly $20 billion to date, well over the agency’s minimum goal of $10 billion.

Out of five available portions of spectrum, the so-called C block — whose airwaves are considered particularly suited for broadband Internet because they can travel long distances and penetrate walls — has raised the most cash. A $4.7 billion bid, meeting the minimum price set by the FCC, was placed last week. But another portion up for auction, the D block, is still far from raising the reserve amount set by the FCC. The identity of winning bidders won’t be disclosed until the auction of all blocks of spectrum are completed. Analysts say Verizon Wireless (VZ) is a likely winner, though Google (GOOG) had publicly stated its commitment to meeting the reserve price.

Analysts note the C block has the potential to dramatically change the U.S. wireless landscape because whoever wins it will have to keep the new network open to all devices, a provision Google secured after lobbying the FCC.

“Google’s interest in the C block influenced Verizon’s decision to open up access to its network  just as Apple’s introduction of the iPhone stirred up the cellphone market,” ABI Research analyst Nadine Manjaro said in a statement. Google’s entry into the market as a mobile operator, while unlikely, could also bring a big change to the industry, now controlled by a small handful of telcos.

For now, though, it’s all a waiting game. The only deadline the FCC has set is that all bidding must be concluded by June 30.