Wireless auction update: C-block spectrum bidding stalled

By Michal Lev-Ram

The government’s high profile spectrum auction, which has attracted the likes of Google (GOOG), Verizon Wireless (VZ) and AT&T (T), is still far from over. Although a bid on one of its most coveted bundle of licenses, the so-called C block, neared $3 billion yesterday, no new bids were placed in the ninth round of bidding, which took place Tuesday morning. The opening bid for round ten on this slice of spectrum has been set at $3.4 billion, while the minimum reserve price set by the FCC is $4.6 billion .

There are five segments of 700 MHz spectrum — now used for analog television — up for grabs but the C block, a nationwide network well suited for broadband services, has attracted the most attention. That’s partly because of an FCC mandate Google lobbied hard for that requires the network must be kept open to any mobile devices. But if the FCC’s minimum asking price for this portion of the spectrum is not met, it’s likely the agency will try to auction it off without the “open access” requirement.

Google said last year it will meet the $4.6 billion reserve price for the C block. AT&T and Verizon were also expected to bid, but as this is a “blind” auction the identity of the participants will be kept secret until the auction is over.

So far, only one bid has come in for another portion of the spectrum, the D block, to be used for a nationwide public safety network. At $472 million, it’s far below the minimum asking price of $1.6 billion. A startup called Frontline Wireless initially had its eyes set on the D block, but had to drop out of the race earlier this month, reportedly due to lack of financing.

The FCC hopes to raise at least $10 billion from the spectrum auction. Looks like that might take a while.