Verizon Wins 'C-Block' in Spectrum Auction

The Federal Communications Commission said Thursday that Verizon (VZ) has emerged as the winner of the prime "C-block" from the agency's recent 700-megahertz spectrum auction.

The C-block carried the hefty price tag of $4.74 billion and will likely be used for expansion into "4G" territory. Verizon's main competition in the secret bidding was largely believed to have been rival carrier AT&T (T).

"We are very pleased with our auction results," Verizon Wireless, a venture of Verizon and Vodafone (VOD), said in a news release. "Specifically, we were successful in achieving the spectrum depth we need to continue to grow our business and data revenues, to preserve our reputation as the nation's most reliable wireless network, and to continue to lead in data services and help us satisfy the next wave of services and consumer electronics devices."

Shares of Verizon rose 99 cents, or 2.8%, to $36.12. AT&T added 80 cents, or 2.2%, to $36.85.

Because the sale price of the C-block topped the $4.6 billion reserve, Verizon must use the spectrum as an open network, allowing any mobile device to run on it. Perhaps not coincidentally, Verizon Wireless, offered new details Wednesday on the company's plans to open its wireless network to other device makers.

Google (GOOG), long rumored to have taken part in the bidding process in order to benefit its forthcoming Android handset, had pushed for the development of the C-block into an open network in hopes it would increase wireless competition.

The FCC's 700-MHz auction -- the highest-earning spectrum sale by the FCC -- closed Tuesday after the latest round fielded no new bids. While the A, B, C and E blocks all met and exceeded their respective reserve prices, the D-block did not meet its established reserve of $1.3 billion. The FCC said Thursday it will not reoffer the D-block immediately but will consider options for how to license that spectrum in the future.

"The 700-MHz spectrum will provide consumers with mobile broadband, mobile video, and other services not yet imagined," said FCC Commissioner Deborah Tate in a statement. "With its excellent propagation characteristics, this spectrum may be particularly useful in expanding advanced services in rural areas, a key goal of the Commission that has been mandated by Congress."

The spectrum will be freed up next February, when television broadcasts move to digital from analog.

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