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700-MHz Showdown: Who Has The Highest Bid For The C Block? Google Or Verizon?

The rules governing the FCC 700-MHz auction prevent anyone -- even the bidders -- from knowing the identities of the other bidders. Late last week, the C block surpassed its reserve price with a bid of $4.71 billion. And there it sat for nearly a week. Then, someone sneaked in a bid for $4.75 billion. Was it Google, or Verizon?

My money is on Verizon Wireless. Google committed to participating in the auction, and even said it would bid the minimum $4.6 billion to trigger the open access provision of the C block. It never said anything about winning spectrum and operating its own wireless network. The week before the auction, analysts believed that Google would bid, but plan to lose in the auction. That just might be the case.

I'd bet that Verizon and Google were playing a game of one-upsmanship during the early rounds of the auction. When round 30 came around, Google placed the winning bid of $4.71 billion on the table. Verizon bided its time and took measure of its hand. It knew Google was bluffing. As bidding for the auction in general slowed down in recent rounds, Verizon knew it had the better hand and placed a higher bid, just edging out Google. Will Google counter-bid? Probably not.

Verizon can use that spectrum right away to help its mobile TV service, o or later for other wireless services. As serious as Google is about wireless, I don't think it is so serious that it is going to build and operate its own wireless network.

In other developments, the FCC hoped to speed up the bidding process. It has initiated Phase 2 of the auction, which means new bids only have to be 2% higher than the current bid. This is lower than the 5% increase required in Phase 1.

Bidding has increased slowly in these latter rounds, and recently pushed past $19 billion in total bids. This is well above the FCC's hoped-for jackpot of $10 billion.

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