At the conclusion of today’s penultimate round, the total bids of the E-block economic area licenses hit the FCC reserve of $904 million. That’s important because now four of the five blocks have hit their reserves, meaning their ultimate winners are free and clear to claim their spectrum once the auction ends. The exception, of course, is the D-block public safety spectrum, which hasn’t garnered a bid since round one. So the fate of the auction depends ultimately on what the FCC decides to do with D block when the last bids come in.
If one of the other blocks failed to meet their reserves, the FCC would have immediately relaunched a special auction with fewer requirements on the licenses in order to hit the reserve, but it left its options open on D block, the winner of which is expected to launch a nationwide network shared with public-safety agencies. Stifel Nicolaus seems to think that the government will peel off the D block from the rest of auction in order to figure out why the huge chunk of nationwide spectrum isn’t attracting any bidders. If the FCC does so after the auction ends, then it could announce the winners of the other blocks and lift the anti-collusion rules preventing them from wheeling and dealing with one another.
Of course, this is only after the auction ends. We’re closing out round 45 now, and as Stifel pointed out 2006’s AWS auction went 161 rounds. The current bidders are competing over the small potatoes (total value of the auction is increasing less than one tenth of a precent each round), but they can keep this auction going for some time. The FCC is trying to speed the process up a bit, though. On Wednesday it effectively forced bidders to play their cards by requiring them to bid 95% of their eligibility in the ensuing rounds. Tomorrow it’s upping the number of rounds per day to six.