Is AT&T bitter about the C Block?

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Is AT&T bitter about the C Block?

Sound bites and dollar signs: That's what keeps our legislative branch humming along. Yesterday, the House of Representatives subcommittee on telecommunications hosted FCC chairman Kevin Martin to discuss the results of the 700 MHz spectrum auction. Three Republican representatives grilled Martin over whether Google "gamed" the system by lobbying to get the open access provisions on the C Block and then not bidding to win.

"Google was successful in gaming the system," Rep. Fred Upton (R-MI) said. The open access provisions were simply a "social engineering" experiment by the FCC that prevented the C-Block from raising billions of dollars more, Upton continued.

Google, of course, did bid on the C Block. The company bid just as it promised it would: until the provisionally winning bid on the C Block had reached its reserve price: $4.6 billion. By meeting that reserve price, Google triggered the open access provisions the company so desired. The FCC, not Google, decided on the reserve price and if it proved (in hindsight) to be too low, then the FCC is at fault for short changing Congress of the extra billions--not Google. Verizon Wireless ultimately bid to win the C Block for $4.7 billion.

Rep. Cliff Stearns (R-FL) and Rep. John Shimkus (R-IL) both followed Upton's lead. Shimkus asked Martin whether Google had "duped" the FCC by bidding in order to trigger the open access rules. Martin assured them that the agency was not duped and that the rules were not put into place to keep any company from bidding.

FCC commissioner Jonathan Adelstein noted that Google did precisely what it had promised to do: Bid enough to trigger the open access provisions. "They put over $4.6 billion of their capital at risk," Adelstein noted.

The 700 MHz auction brought in more than $19 billion, far more than the most optimistic projections of $15 billion in winning bids. The final $19 billion figure is not even counting the D Block, which did not garner enough to meet its reserve price.

So who would have swooped in and driven up the price of the C Block had it been provision-free? Most analysts figured AT&T would compete with Verizon Wireless and Google for the C Block, but the carrier acquired some spectrum from Aloha and bid on other blocks instead. So is AT&T upset about the results?

It may be worth noting that all three of the Republican representatives that grilled Martin yesterday entered office about 14 years ago. The company whose political action committee contributed most to each of their campaigns during the past 14 years? That's right: AT&T. -Brian

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