On Thursday, the coveted "C block" of the FCC's 700 MHz auction saw its high bid rise to $4.7 million, passing the reserve price of $4.6 million set by the FCC. This is critical because the FCC has set the restriction on the C block that any licensees must "allow consumers to use the handset of their choice and download and use the applications of their choice in this spectrum block."
However, that stipulation, which Google pressured the FCC to put in place, would only go into effect if the reserve price of the auction was met. Otherwise, the stipulation would be removed — as current wireless giants in the United States requested — and then the U.S. carriers would have the opportunity to purchase the C block and turn it into a walled garden.
The C block is the jewel of the 700 MHz auction, because it will offer its winner the opportunity to build a nationwide U.S. network for wireless broadband Internet. That new network, which is being auctioned as a result of U.S. television stations moving off of it and converting to digital signals in February 2009, could serve as a disruptive influence for both the Cable/DSL industry and the future of the cell phone, as I explained in The 700 MHz auction will tip the wireless balance, but in which direction?
Since the $4.6 million barrier has been eclipsed, it is likely that multiple bidders are vying with each other, but we won't know the identity of the winner until the auction closes later in February, and additional bids could still drive the price even higher. The three highest bidders are expected to be Google, Verizon Wireless, and AT&T Wireless, but there are also a handful of other deep-pocketed entities involved in the auction who could be making a run at the C block.
There has been speculation that Google plans to merely make a few token bids to make sure the reserve price is met. Of course, others think Google is ready to become a wireless ISP. We won't know Google's true intentions for several more weeks, but it does appear that Google's dream of an open wireless Internet platform for mobile devices will come true.
Jason Hiner has nothing to disclose. He doesn't hold investments in the technology companies he covers.
Jason Hiner is Global Editor in Chief of TechRepublic and Global Long Form Editor of ZDNet. He's co-author of the book, Follow the Geeks.