FCC Considers Blind Wireless Auctions

TechNewsWorld reports that the "Federal Communications Commission (FCC) is considering a blind bidding process for wireless spectrum auctions, a move that is both supported and opposed by major wireless carriers, depending on their own spectrum situations." According to the article, The "FCC votes Wednesday on whether to change the wireless auction process to prevent participants from knowing who else is bidding while disclosing only the top bids."

The FCC plans to "begin the bidding for wireless licenses on June 29, and they are expected to bring in as much as US$15 billion. The move could do a great deal to help prevent collusion or unfair bidding and reselling strategies."

Roger Entner at Ovum thought "one major reason the FCC is contemplating the change is that a number of registered bidders for wireless spectrum auctions in the U.S. never make any bids at all." He said, "They're merely registered to see what the other guys are doing."

He also noted "some companies aim to buy up spectrum that competitors want, or to buy spectrum to resell with no intention of using it." Entner said the FCC is trying to "clamp down on financial speculation."

DataComm President Ira Brodsky didn't believe spectrum speculation by competing wireless firms was wrong. He said, "I believe spectrum auctions, as bad as they've been, are the fairest way to split up spectrum. This way, at least it's a matter of who's willing to pay the most."

Entner remarked, "T-Mobile desperately needs nationwide licensed spectrum; they want to avoid preemption in a given market. Cingular, on the other hand, has plenty of spectrum at the moment." On the topic of a blind auction, Entner added, "If they close [bidder information], that means Uncle Sam gets less money, but it's a cleaner auction."

Regarding the issue of designated entities (DEs), Yankee Group analyst Marina Amoroso thought this might "be more significant and have more impact on this summer's auction than the blind bidding proposal." She mentioned that "in past auctions, it has not been uncommon for large companies to have two, three or more DEs, which get preferential bidding because they are supposedly smaller companies." Amoroso said the use of designated entity status does not necessarily skirt the rule of the law, "but it was skirting the spirit of the law."