Auction Day 23: Vidéotron withdraws bids as spectrum auction nears end

Industry Canada's Advanced Wireless Services (AWS) spectrum auction appears to be taking its toll with bidding slowing down considerably over the past two days and withdrawals leaving some contenders on the hook for hefty sums of money.Vidéotron withdrew its standing high bids on the 10 MHz E-band licences of Quebec City and Chicoutimi/Jonquière yesterday, but without any takers, the company now finds itself having to a pay penalty. According to the auction rules, a party that withdraws its standing high bid for a licence will have to pay the difference to Industry Canada if that licence sells for less than the withdrawn standing high bid."If a bid is withdrawn from a licence that ultimately sells for less than the withdrawn bid, the withdrawal penalty will equal the difference between the withdrawn bid and the ultimate selling price," states Industry Canada's AWS auction licensing framework.In this case, Vidéotron will be on the hook for $15.36 million - the combined price of the two licences - because now they are unclaimed. The Quebec cable, telephony and Internet provider found itself in a similar situation much earlier in the auction when it bid up the 10 MHz Toronto D-band licence to more than $96 million and then twice withdrew its standing high bid only to see no other bidders take the licence.The company can wait a few more rounds to see if any remaining bidders make an offer for these two licences, but if there are none, then Vidéotron will likely replace bids on those two licences since it will have pay the full amount to the department.Despite the excitement caused by Vidéotron's unexpected withdrawals, the drama of the auction is starting to wane as the number of bids placed in each round drops. The end could finally be near for Industry Canada's AWS auction.The number of new bids dipped below the 40-mark on Wednesday and dropped into the 20s on Thursday. While it's still unclear whether the auction will end today or early next week, the decreasing number of new bids shows that spectrum portfolios are round out with some bidders getting what they want and others being left out in the cold.There are some battles that will continue, however, prolonging the auction. SaskTel will not give up on acquiring 40 MHz of spectrum for Saskatchewan. It continues to battle Shaw Communications for the 20 MHz B-band set aside licence and Rogers Communications for the 20 MHz A-band licences covering Regina, Moose Jaw and Saskatoon.The Big Three also find themselves in some interesting contests for what might be considered less important spectrum. The 5 MHz I-band, which has been linked to the digital video broadcast - handheld (DVB-H) mobile TV application - has seen some activity recently with Rogers and Telus Mobility jostling over the Newfoundland and Labrador, Saskatchewan and Far North licences. Bell Mobility, which was also involved in the fight for the NF I-band property at one point, is now standing high bidder on the New Brunswick and Eastern Quebec I-band licences.

Auction Day 23: Vidéotron withdraws bids as spectrum auction nears end

News | 06/27/2008 1:38 pm EDT

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