Auction total passes $18B: Action centers on A and B Blocks

Bidding in the Federal Communication Commission’s 700 MHz auction continued to slow throughout today, though enough money has been thrown around to push total potential winning bids past $18.5 billion after round 26. Auction 73 is now set for a well-deserved weekend break, after which it will continue the march toward the $20 billion mark and beyond.

Following a relatively slow morning of bidding that saw an average of 681 bids placed through rounds 22, 23 and 24, the final two rounds of the day averaged just 557 bids each, which is less than half the amount of bids being bandied about during rounds earlier in the week. Despite the slowdown, the auction continued to draw in excess of $500 million in new bids per round, with round 25 snaring $524.6 million in new potential winning bids and round 26 receiving $541.4 million. For the day, bidders heaped just under $3 billion in new potential winning bids during the five rounds of bidding on Friday.

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Most of the action centered on the A- and B-Block licenses, which appeared to gain increased attention following the abrupt halt in new bids on the eight C-Block package covering the 50 states. The B-Block license covering Chicago maintained its position as best-of-the-rest, holding a top bid of $892.4 million at the end of the week. The Chicago license also maintained its position as the most expensive license per megahertz/potential customers covered at $9.19 per MHz/pop, according to Optimal Markets Inc.

After a small lull, bidding picked up for the B-Block license covering New York City, which attracted a new bid during each round today, thereby pushing its potential winning price to $884.7 million or $4.57 per MHz/pop. While they had not received a new bid since round 20, the A- and B-Block licenses covering the Los Angeles area rounded out the top five highest-priced licenses at $580.3 million ($2.69 per MHz/pop) and $484 million ($2.58 per MHz/pop) respectively.

Analysts had expected the smaller A- and B-Block licenses to garner more attention once bidding stopped on the C Block, noting that the bidding patterns on the C Block seemed to indicate two parties were interested in the license and that once the price hit a certain mark, one of the interested bidders would take its money off that bet and start spreading it around the smaller licenses.

That said, the C Block remained stagnant with the potential winning bid remaining at $4.7 billion (76 cents per MHz/pop), which is just over the $4.6 billion reserve price set for the license. While the party holding that top bid won’t be known until after the auction, Google Inc. had said before the auction that it would bid at least $4.6 billion for the license in order to trigger the open-access clause.

The unpaired, E-Block licenses continued to get sporadic action during the day. The most popular, the E Block covering the New York City area, stood at $178.9 million ($1.16 per MHz/pop) after round 26. E-Block licenses made up 19 of the 23 licenses that had failed to register one bid after round 26.

There continues to be no new news on the national commercial-public safety D-Block license, which has failed to receive a bid for 25 consecutive rounds and remained at its $472 million potential winning bid. The license has a $1.3 billion reserve price.