Prepaid Reviews Blog » 700 MHz spectrum

New plan for the 700 MHz D Block

Joe — Tue, 09 Sep 2008 12:30:20 +0000

It’s been a while since we’ve talked about the 700 MHz auction. That’s mainly because everything is said and done. We’re not going to see much in terms of new network coverage, since the big players are planning to use it for LTE, which we won’t see for a few years. Metro PCS is one of the exceptions, as it plans to roll out the Boston license it acquired in the auction sometime early next year. ANYWAY, we’re now hearing that the FCC has a new plan to auction the D Block. You know, that one reserved for public safety, but didn’t meet the reserve price.

The idea is to split it up into regional licenses. Only there’s still a chance to get the whole license in one, cheaper, bid. I’ll let Ars Technica explain:

One of the two parallel auctions that the agency plans to hold aims to sell the D Block to a single bidder who will run both a commercial service and share the spectrum with public safety agencies via a leasing system. This time the FCC has reduced the minimum asking price to 750 million dollars, far less than the previous reserve bidding level of $1.33 billion.
…
But on top of that, the FCC will run another auction in parallel, this time for 58 regional licenses. Bidders will have the option of competing for the licenses in a WiMax or LTE environment. The agency’s new rules also propose that the auction cannot succeed unless the regional players collectively pony up more money than the national bid raises.
…
If, however, the national bid fails again to attract that minimal reserve price, then the auction becomes by default a competition between regional WiMax and LTE. Whichever license system produces bids that serve the most population or raise the most money will become the preferred platform for the regional licenses, as long as at least 50 percent of those licenses are sold nationally.

If that sounds too complex, well, it is. Normally I’d rewrite that stuff in my own words, but I can’t even fake knowing what I’m talking about. There’s also a long, complex, bureaucratic procedure for getting this plan approved. Chances are, it will undergo a few more mutations before becoming official.

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New plan for the 700 MHz D Block

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New plan for the 700 MHz D Block

As expected, Verizon wins C-Block

Joe — Fri, 21 Mar 2008 12:45:23 +0000

Well, that didn’t take too long. After months of speculation, the results of the 700 MHZ auction are in. And you know what? They aren’t too pretty. See, the government raked in nearly $20 billion on this deal. The two largest wireless carriers in the nation, Verizon and AT&T, put up $16.3 billion combined. So it looks like all hopes of regional companies expanding and new names hitting the cellular market have just crashed and burned. All this auction did was make the rich richer.

It was kind of predictable, really. In talking about the auction when the C-Block hit the reserve price, I felt little doubt that Verizon had won it, and that AT&T hadn’t even put in a bid. Well, that’s the case. Verizon was only bidding against Google in that block, and all Google wanted to do was to get it above the reserve price. Because of the lack of competition, Verizon got it on the cheap.

But they spent an overall $9.63 billion, so yes, they picked up licenses elsewhere. Verizon was actually the largest winner in the A-Block, which covers medium-sized licenses. And on top of that, they took 77 B-Block licenses, which are the really small ones.

Speaking of B-Block, this is where AT&T dominated. See, they already had huge chunks of 700 MHz spectrum from their purchase of Aloha Partners. So they were able to stay away from the big chunks, and just feed off the smaller chunks. All this did was take away from the smaller companies who could only afford smaller chunks.

Of our prepaid providers, MetroPCS picked up a Boston license for $360 million. And that’s it. Leap Wireless was shut out. Same for Alltel.

So was it a success? Well, if you consider the two largest companies taking over two-thirds of the auction, yeah, it was a success. But as far as creating more competition, it failed horribly.

[Business Week] [CNN Money]

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As expected, Verizon wins C-Block

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As expected, Verizon wins C-Block

700 MHZ auction grosses $19.6 billion

Joe — Wed, 19 Mar 2008 15:20:22 +0000

And so we have finally reached the end of the 700 MHz auction. It was a long, grueling process, with little to speak of after the first few weeks in February. But the bids kept coming in in snail-like fashion, so the auction went on. And on. And on. Until we finally reached the closing point. However, don’t think this is through. If you remember back to high school, there was something called Freytag’s Pyramid, which described dramatic structure. There is the exposition, followed by rising action, then the climax, falling action, and finally denouement, or resolution. Well, we haven’t quite hit the climax yet.

That’s Freytag’s Pyramid. However, we didn’t have a real conventional one here. No, our pyramid looked more like this:

For now, all we know is that the public safety block didn’t do so well. “Kevin Martin, the FCC’s Republican chairman, has said he still hopes to come up with some sort of public/private partnership to solve public safety’s inability to communicate with each other effectively.”

The winners should be announced in about 10 days. We’ll surely hear more then.

[CNN Money]

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700 MHZ auction grosses $19.6 billion

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700 MHZ auction grosses $19.6 billion

Just one snag left in the 700 MHz auction

Joe — Mon, 11 Feb 2008 16:33:06 +0000

Okay, so the government has raked in a ton more money than they had anticipated — or at least publicly anticipated — with the 700 MHz auction. They’re up near $20 billion, which has to be a major victory, since publicly they were saying they would be happy with $10 to $12 billion. The C block has also been freed, with the reserve price of $4.6 billion being met. There were rumors of a bidding frenzy for that block, but in the end it turned out to be Verizon and Verizon only, with Google there to bring the bid over the reserve mark. And now we’re left with the public safety aspect of the spectrum, which still hasn’t moved from its first-day bid of $472 million.

Things aren’t looking good going forward, either. From Rep. John D. Dingell (D-Mich.), chairman of the House Energy and Commerce Committee:

“We now know that only the D Block may not sell in this auction,” Dingell said in a statement. “The construction of a nationwide, next-generation, interoperable broadband network for public safety is a crucial policy objective, and the need for such a network has not diminished.”

There really doesn’t seem to be a plan in place for when the D block doesn’t hit the reserve price. From FCC Chairman Kevin Martin:

“I will always continue to be optimistic that someone will take on the burden of working with public safety to resolve these interoperability issues,” Martin said. “But if no one steps forward, the commission will have to reevaluate, obviously.”

Hey, maybe this is how Sprint could get back in our good graces. Hey, just sayin’…

[Washington Post]

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Just one snag left in the 700 MHz auction

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Just one snag left in the 700 MHz auction

Bidding slowing down on 700 MHz C block

Joe — Wed, 06 Feb 2008 14:30:55 +0000

Late last week, after speculation that the reserve might not be met, the 700 MHz spectrum C block hit its reserve price of $4.6 billion. Yes, the auction is still official. But since Friday, the bid has only reached $4.74 billion. There are potentially several weeks remaining to bid — the auction won’t end until all licenses have been finalized. But indicators are that the C block might be all but done at this point.

The problem, it seems, is lack of competition. The only three real players in the C block game were Verizon, AT&T, and Google. Yes, those are rather large entities, and could potentially incite an enormous bidding war that would have the government licking their collective lips. However, the balance of interest was never there.

First, AT&T wasn’t really interested in the C block. They already acquired a national 700 MHz license from Aloha Partners. That deal was approved on Tuesday. The company has made it know that they plan to fill out their 700 MHz spectrum by bidding on regional licenses. The spectrum from Aloha covers 250 markets, so AT&T is pretty set in that regard.

Then you have Google, who many thought didn’t want to win in the first place. They were there as a symbolic gesture, pushing for openness on networks they do not control. Yes, it’s nice to think about a Google wireless service, but the company has other matters to attend. It’s entirely possible that Google pushed the bid over the $4.6 billion reserve mark because of the other player.

That leaves Verizon as the only truly interested party. Normally, that would play in their favor. Less competition usually means a better bargain. And in the end, Verizon will get a good deal on the C block. I’m just sure that they would have rather had the auction fall short of the reserve, and had the bidding re-started with no open-access provision.

It appears, though, that everyone is getting what they want. The two major U.S. carriers get their slices of the spectrum, and Google gets their open access provision in place. Of course, it’s Verizon that feels the brunt of that, while AT&T gets their spectrum with no restrictions.

So I suppose now it’s a matter of figuring out where the regional licenses are going.

[Reuters]

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Bidding slowing down on 700 MHz C block

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Bidding slowing down on 700 MHz C block

Google gets open access wish

Joe — Fri, 01 Feb 2008 13:57:42 +0000

Things looked a little hairy headed into Thursday. The coveted C block — the one with the open access provision attached to it — had stalled on Wednesday. It was approaching the $4.6 billion reserve price, but hadn’t quite reached there. In fact, a few were wondering if it would be stuck at that level for quite some time. After all, AT&T and Verizon would love for the spectrum to be re-auctioned with fewer restrictions. But all of that was blown up yesterday, as one of the bidders upped the ante to $4.71 billion. Ladies and gentlemen, mission accomplished.

Of course, there’s a long way to go before we can realize the benefits of open access. first, those airwaves have to be turned into a network, whether that’s operated by Google or one of the existing carriers. Then, programmers and handset manufacturers have to be motivated to created programs and devices for use on the network.

So there will be no instant gratification. We’ll see results, but they’ll be down the road.

The question now is if Google will just drop out of the proceedings. They got their wish. If they were the ones who pushed the envelope, they’ll have to wait to be outbid. But that should come soon enough — and if it doesn’t, we’ll know who made the $4.71 billion bid.

Bids now total $15.6 billion, which is more than the government was expecting from this. So good job all around.

I do have one final question. How much does everyone else care about open access? I mean, I care because I’m sick of seeing press releases for new phones that have such similar functionality. I want to see something new, not just a new casing on an old phone. Does the average consumer — the average prepaid consumer, even — care about the ramifications of open access?

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Google gets open access wish

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Google gets open access wish

C block bidding nearly at reserve price

Joe — Wed, 30 Jan 2008 13:30:20 +0000

While we still won’t know the bidders until after the auction is over, all indications are that the C block of the 700 MHz spectrum — the “open access” block — is nearing its $4.6 billion reserve price. Had it not reached the reserve price, the FCC could have opted to re-hold the auction, possibly with different provisions. Meaning, of course, that they’d auction it off without the open-access regulation. But once it hits $4.6 billion, it’ll be official.

We’re reminded, though, to not think that just because bidding has neared the reserve price that it will necessarily meet it.

“The question is, when you’re bidding underneath the reserve price, are you really bidding?” asked David Spofford, president of the Telecom Expense Management Industry Association, in an interview. He explained that when the bidding is under the $4.6 billion goal, a deal won’t be completed and companies don’t have to put up any money.

So while the auction is on pace to meet the reserve price on Wednesday or Thursday, it might linger for a bit.

(Purely a hypothetical on my part: Many have said that Google doesn’t intend to build a network. Even so, they could push the auction over the reserve limit, and then let AT&T and Verizon battle it out for the spectrum. It would still be open access, so they’d win on that front. I somehow doubt both AT&T and Verizon would back out after the block hits the reserve price.)

The D block is in a bit of trouble, though, still sitting at the $472 million bid we saw on the first day. The reserve for that block is $1.6 billion.

[Information Week]

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C block bidding nearly at reserve price

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C block bidding nearly at reserve price

First day of 700 MHz auction worth $2.8 billion

Joe — Fri, 25 Jan 2008 13:47:45 +0000

No, it’s not the $12 billion they’re seeking. Yet. But the FCC has to be marginally pleased after the first round of bidding on the 700 MHz spectrum on Thursday. Wireless carriers and other assorted technology companies dropped bids worth $2.8 billion in the first two rounds. Of course, we don’t know exactly who placed the bids. I’m sure that some sites will come up with lists, but most of them can be considered bogus. Consider it like the Mitchell Report, where false lists of the accused circulated before the official list was announced.

One bid is said to be near $1 billion itself, though it didn’t come from one source. It was eight bidders who wanted to set up a spectrum across the U.S. An initial reaction would be that Google teamed with some of the bidders in this effort. But that is pure speculation. For all we know it could have been eight unheard-of companies.

Better news is that someone actually did bid on the D-Block, which is reserved for a public safety network. There were fears that this block would be ignored. Frontline was the only company really interested in it, and they’re kaput. But there is a $472 million bid in, so something’s going to get done.

[Gearlog]

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First day of 700 MHz auction worth $2.8 billion

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First day of 700 MHz auction worth $2.8 billion

Today begins the 700 MHz auction

Joe — Thu, 24 Jan 2008 13:30:55 +0000

We’ve been talking about it for months, and its finally here: The fabled 700 MHz spectrum auction. The FCC will be putting 1,099 spectrum licenses up for bids, which will be awarded to a number of the 214 registered applicants. So it’s time to get excited, right? Well, maybe not quite yet. The bidding will go on for quite a while — possibly a month — and we really won’t know who won until 10 days after the auction. Hey, it’ll be more interesting than watching paint dry, at least.

The government is expecting a $12 billion return from the sale of 62 megahertz of spectrum. Among the larger profile bidders are Verizon Wireless, AT&T, Google, and Qualcomm, with a number of cable juggernauts — including Cablevision and Cox — also vying for airwaves.

Bidders of note to the prepaid community are MetroPCS, Leap Wireless, and Alltel. Manyt of our other pay as you go phone provider reviews will benefit from their parent networks acquiring spectrum.

One of the provisions of the auction is the appropriation of a C Block which is to be reserved for public safety and first responders. Originally, Frontline Wireless had their eyes on this block, but were disqualified after failing to submit an upfront payment. This does not bode well for public safety:

“I have a hard time understanding why any of the big incumbent wireless carriers would go after the D Block with all the conditions,” said Carol Mattey, managing director of telecom regulatory consulting at Deloitte Touche, and a former FCC official.

If you like watching grass grow, you can follow the auction on the FCC’s website.

[RCR Wireless News]

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Today begins the 700 MHz auction

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Today begins the 700 MHz auction

A strange new entrant to the 700 MHz auction

Joe — Wed, 19 Dec 2007 15:20:13 +0000

Surely you’ve heard of Paul Allen. You know, the dude who co-founded Microsoft with Bill Gates back when they both looked like this. He’s representing his investment company, Vulcan Capital, represented as Vulcan Spectrum LLC. His is just one of 96 current names accepted for bidding. There are 170-something incomplete applications, which has led the FCC to move the deadline to January 4, from December 3. Yeah, there are some interesting applicants on the already-accepted list.

Notably, Verizon, Alltel, and AT&T are among the incompletes. It probably means nothing, but it’s still strange to see such noteworthy companies — bidding on such a coveted spectrum — hand in an unacceptable applications.

On the completed applications end, there are few surprises, other than Allen, of course. There are a bunch of small-name companies bidding in the zero to 15 million range, and the 15 to 40 million range. A notable name on the incomplete end we hadn’t considered yet is Qualcomm, though they won some 700 MHz spectrum back in 2003.

If you want to browse the lists yourself, you can see the accepted applications here, and the incomplete applications here. WARNING: They’re both PDFs.

By the way, and not that this is his intention, but if Paul Allen started a cell phone company called Vulcan, we’d totally sign up. And we’re not even Sci-Fi fans.

[Reuters] via [Engadget]

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A strange new entrant to the 700 MHz auction

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A strange new entrant to the 700 MHz auction