Wireless Spectrum Bidders Approved, Auction Begins January 24

The US Federal Communications Commission has approved 214 “qualified bidders” for the forthcoming 700MHz wireless spectrum auction. Among the bidders are Google and wireless carriers AT&T, Verizon, and MetroPCS. According to this Bloomberg report, the government expectation is that the spectrum licenses may raise as much as $15 billion.

There will apparently be a “mock auction” on January 22 to familiarize bidders with the FCC auction system. Approved companies will be permitted to submit their bids on the FCC website or by telephone.

According to the rules established by the FCC for the auction, if at least $4.6 billion is bid, “open access” requirements will apply to a third of the roughly 1,200 spectrum licenses. What that practically means is that the winning bidder would be legally required to allow access to third parties, unlike today.

As the Bloomberg piece speculates, the shrewd move for Google would be to bid that minimum to ensure that the open-access provisions apply and allow another (e.g., Verizon) to pay more for the spectrum. That way, Google and others gain access without actually having to be the winning bidder. It would thus appear to be a bit of a poker game.

The probability that more than $4.6 billion will be bid by the ultimate winner will likely usher in a new and more consumer-friendly era in the US mobile market.