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FCC sets Jan. 16 for 700-MHz spectrum auction

Rules call for anonymous bidding to prevent collusion

August 23, 2007 12:00 PM ET

Computerworld - Public comments are due to the Federal Communications Commission by the end of the month on rules for a Jan. 16 auction of 700-MHz spectrum, which is expected to yield more than $10 billion.

One provision in the proposed rules calls for keeping the identities of the bidders and the amounts of each bid secret until each round of bidding is closed in order to improve competition. The FCC approved the rules in July.

A 32-page notice posted late last week by the FCC includes the Jan. 16 auction date, along with a request for comments on the proposed rules by Aug. 31. Replies to those comments are due Sept. 7. The auction is officially being dubbed Auction 73, and by law, all bidding must be commenced by Jan. 28.

The notice tabulates a summary of more than $10 billion in "reserve prices" for five portions of the 700-MHz band. Reserve prices are the "potential market value" based on several factors, according to the FCC. The spectrum was made available by the freeing up of TV channels in the conversion to digital TV by 2009. The auction's proceeds will go to the U.S. Treasury. Some analysts have said the auction total could reach $20 billion, with an active field of bidders.

Bidding will be done anonymously, which "will serve the public interest by reducing the potential for anticompetitive bidding behavior, including bidding activity that aims to prevent the entry of new competitors," according to the proposed rules. The rules further stipulate that the bidders' names and net bid amounts be withheld from public release until the close of each round of bidding.

Anonymous bidding has been used in prior auctions, but the FCC noted that Auction 73 is different because the FCC will withhold information about bidders "irrespective of any preauction measurement of the likely auction competition." That means that the FCC plans to withhold the amount of a bidder's upfront payments and bidding eligibility until after the close of bidding. Also, it means that a bidder will be told of other bidders with whom they are not permitted to discuss bidding strategies in order to enforce the FCC's anticollusion rules.

Anticollusion has become especially sensitive in Auction 73, since the FCC is trying to promote competition after calls by public interest groups and companies such as Google Inc. for more open networks with nontraditional providers. Google, for example, said that it would be willing to bid a minimum of $4.6 billion for spectrum as long as open networks, devices and applications would be allowed over

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