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Tuesday, March 18, 2008: Bidding at the end of Round 261, the end of Auction 73

Here is the summary data for the entire auction:

Block MHz Number of Licenses Aggregate Total PWBs % of Reserve Current Cost per MHz-pop FCC Held Licenses
A 12 176 $3,961,174,000 219% $1.16 2
B 12 734 $9,143,993,000 665% $2.68 6
C 22 12 $4,748,319,000 102% $0.76 0
D 10 1 $472,042,000 35% $0.17 0
E 6 176 $1,266,892,000 140% $0.74 0
Total 62 1099 $19,592,420,000 8

And here is the data for today (note the auction ended today after 13 rounds):

Daily Sums Daily Averages per Round
Block PWB Delta New Bids Value of New Bids (BUs) PWB Delta New Bids Value of New Bids (BUs)
A $0 0 0 $0 0.0 0
B $272,000 20 193,500 $20,923 1.5 14,885
C $0 0 0 $0 0 0
D $0 0 0 $0 0 0
E $3,000 3 10,200 $231 0.2 785
Total $275,000 23 203,700 $21,154 1.8 15,669
Graph of FCC Auction 73 Bidding Activity and Revenue at the end of Round 261

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Graph of FCC Auction 73 New Bidding Units at the end of Round 261

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After nearly eight weeks and 38 days of bidding, Auction 73 is now officially closed (no joke this time!) Our cautious optimism paid off as the auction finally ended in Round 261 after two bidders wore each other out battling for the two smallest licenses offered in the auction: the Puerto Rican islands of Vieques and Culebra. In the end the two bidders split the winnings as one took Culebra and then the other took Vieques. The final eight rounds featured bids on only these two licenses as the Tehama CA bidding war ended in Round 253 when that license finally changed hands, and no other license received bids today except the American Samoa E license. We're happy that the bidder trying to take over that license didn't listen to us, because on their second try today, they were finally successful.

The final gross revenue for the entire auction was $19,592,420,000, and on average the auction brought in more half a billion dollars per bidding day. But as the first graph shows, 96% of the total was gained by Round 30 which occurred on Monday, February 4, after just eight days of bidding. Both graphs show that the finish was extremely asymptotic, as both new bids and their value approached zero extremely slowly. Who could have guessed that the auction would come down to a duel for the two smallest licenses offered?

So what happens now, and when do we find out who the winners are? Unfortunately, it's not 100% clear what information the FCC will release and when, and this uncertainty is primarily driven by the situation with the D block. As the only block that has not met its reserve price, the 700 MHz auction rules state that it should be offered for re-auction in what is procedurally known as Auction 76. For clarification, Auction 73 and any subsequent related auctions (such as Auction 76) collectively make up the "700 MHz auction", and certain events cannot be triggered until the entire 700 MHz auction is declared closed: events such as the lifting of the anti-collusion rules, setting the date for down payments on winning licenses, and releasing bidder identity information to the public. But rumor has it that the FCC is considering "de-linking" the D block from the 700 MHz auction, so that the auction could then be declared closed. This would allow information to be released to the public more quickly and perhaps more importantly, it would start the 10 day countdown to the due date for down payments on winnings. We will have to wait to see if the de-linking takes place, but if so, we may find out very soon who all the winners are, as well as who placed every bid in every round. Upon having access to such information, any incorrect speculative comments that have been posted will be promptly removed from this website, and the quantity of our historical commentary will be severely reduced. ;o)

We hope you have found the analysis we have provided over the past eight weeks helpful and informative. This post marks the end of the regular daily posts, but the daily history of Auction 73 will remain on this site indefinitely. Also, as important developments arise related to the auction and/or the D block, we will make ad hoc posts, so please check back. We also plan to compile a summary of the auction progress and results, but completion of this report is dependent upon the availability of bidder identity information, so we can't yet say when it will be available.

And finally, best of luck to all as we work together to make 700 MHz mobile wireless services a reality for the American public. We hope that industry and government will find a way to ensure that public safety first responders derive similar benefits from this spectrum as American consumers surely will.

Monday, March 17, 2008: Bidding at the end of Round 248

Here is the summary data for the auction to date:

Block MHz Number of Licenses Aggregate Total PWBs % of Reserve Current Cost per MHz-pop FCC Held Licenses
A 12 176 $3,961,174,000 219% $1.16 2
B 12 734 $9,143,721,000 665% $2.68 6
C 22 12 $4,748,319,000 102% $0.76 0
D 10 1 $472,042,000 35% $0.17 0
E 6 176 $1,266,889,000 140% $0.74 0
Total 62 1099 $19,592,145,000 8

And here is the data for today (note we are at 14 rounds per day):

Daily Sums Daily Averages per Round
Block PWB Delta New Bids Value of New Bids (BUs) PWB Delta New Bids Value of New Bids (BUs)
A $0 0 0 $0 0.0 0
B $639,000 45 955,500 $45,643 3.2 68,250
C $0 0 0 $0 0 0
D $0 0 0 $0 0 0
E $4,000 4 13,600 $286 0.3 971
Total $643,000 49 969,100 $45,929 3.5 69,221
Graph of FCC Auction 73 New Bidding Units at the end of Round 248

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Graph of FCC Auction 73 New Bids at the end of Round 248

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The end is so close now we can smell it, as today we saw the first round in which only one new bid was placed. It happened today in Round 243, and although this round was sandwiched by rounds of four bids each, it's still an encouraging sign that the end is near. It's interesting to note as a benchmark that Auction 66 ended exactly 17 rounds after the first round in which there was just one bid. But given the level of activity that we have seen in recent rounds compared to the level of activity in the final rounds of Auction 66, it's reasonable to assume that Auction 73 will end less than 17 rounds from Round 243. So our guess is that it will be over by midday tomorrow, perhaps in Round 254 or so. We'll see...

The auction gained a whopping $643K today, more than the gains of last Thursday and Friday combined. This was due in part to the 14 round format, but the new formula used to calculate the amount of new bids also helped. Existing bidding wars such as those in Putnam FL and Garrett MD continued today but as the amounts required to continue the battle increased quickly, bidders dropped out and the battles ended. For example, after just eight consecutive rounds of receiving bids today, the PWB on the Putnam FL license more than doubled and the license changed hands. In addition, several new battles broke out today, including Walton FL, Dixie FL, Johnson TN, and Tehama CA, and all but the battle for Tehama CA seem to have ended. We also saw continued sporadic bidding on licenses in Puerto Rico as well as two more unsuccessful attempts to take over the E license for American Samoa. In the last three rounds of the day, the only bids placed were for Tehama CA and the tiny island of Culebra PR.

There are now just eight licenses held by the FCC since a bidder picked up the Steubenville OH license in the first round this morning. The eight remaining unsold licenses are the A block licenses for Wheeling WV and Lubbock TX, the B block licenses for Fargo ND, Grand Forks ND, Bismarck ND, and one RSA in each of NC, SC, and VA.

For the moment, it appears that all three licenses in Puerto Rico that have received bids recently have changed hands since the activity started in Round 213, so these battles may be nearly over. Hopefully, bidding on these licenses will not resume tomorrow, and we will be that much closer to the end. But to get there, the Tehama CA battle must also end. We believe that the FCC's new formula will quickly raise the price out of reach of one of the bidders. Lastly, we hope that the disruptive bidder trying to take the American Samoa E license will stop trying, as it does not appear that it will be successful. If all this happens and nothing else breaks out in the meantime, then the auction should end tomorrow. Anything can happen, but we're cautiously optimistic that tomorrow is the day.


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