Controversy over 700 MHz spectrum auction
Quick background: FCC auction 73 opens bidding for the 700 MHz wireless spectrum that was previously allocated to analog UHF television channels 52-69. With the impending switch to digital television these frequencies are no longer necessary.
This Dow Jones report, Frontline Wireless Bid Failed Amid Investor Concern, Bid Rules, suggest why Frontline dropped out of the auction of the D-block band which is reserved for an auction winner that plans to build a network for public safety and commercial customers. None of the present or former participants may discuss details of the auction, so reports are based on unnamed sources.
Frontline's bid collapse may have been due to the obligation of the auction participants who bid on the D-blocks spectrum chunks. What worried Frontline's investors:
In order to ensure the winner of the D-block license cooperates with the public safety community, the FCC rules say if it is deemed the licensee wasn't negotiating in "good faith" it could be forced to forfeit more than $100 million and lose all rights to the spectrum it had acquired.
Here's an angry op-ed from a former Frontline advisor, Perspective: Quit fooling with wireless-spectrum auction:
Now, with the closure of Frontline Wireless, Martin [FCC Chairman Kevin Martin] is indicating that he may change some crucial rules after all the potential bidders decided whether to participate in the auction. If he changes the rules, it would threaten the whole FCC auction process, and possibly any government auction.
UPDATE: The rest of the 700 MHz is proceeding...
The 700 MHz auction paused Friday with $3.7 billion in bids on 921 licenses at the end of four rounds. Some 178 licenses have yet to receive a qualified bid. The C-block package of licenses covering 50 states attracted the highest bidding with one new bid reaching nearly $1.8 billion at the end of the fourth round. A minimum bid of $4.6 billion in needed to enact the open-access provision for the C-block.
Google has officially announced that it will bid in the 700 MHz spectrum auction, which is scheduled to take place in late January. The FCC will require the winning bidder of a slice of the upper C-Block spectrum to allow any application and any device on its network. Google has said it is happy with these open-access provisions despite not getting everything it wanted when it lobbied the FCC for open access.
It could be that Verizon Wireless' move to open its network to outside devices and applications was a competitive move against Google's plan to purchase spectrum.