Communications Crossroads - Fall 2008 - (Page 15)

The Auction The 700 MHz auction began January 24 and ended March 18. It was actually a sale of the band from 698 to 806 MHz that will be made available, in early 2009, by the move of television broadcasts to digital transmission. The change for television meant that a lot of high quality airspace became available for a variety of communications uses. The Federal Communications Commission used this opportunity to try to improve emergency communications, and industry insiders and observers saw big opportunities for competitive advantage, including changing the rules of engagement. The bidding was anonymous, which the FCC stated had never been done in an auction of this size, and was intended to help minimize “anti-competitive bidding behaviors” as well as increase efﬁciency. The spectrum can be used for “ﬂexible ﬁ xed, mobile, and broadcast uses, including ﬁ xed and mobile wireless commercial services (including FDD- and TDD-based services); ﬁ xed and mobile wireless uses for private, internal radio needs; and mobile and other digital new broadcast operations. These uses may include two-way interactive, cellular, and mobile television broadcasting services.” This wide open use, along with the high quality of transmission available, led to the commonly accepted description of the spectrum as beachfront property. What it Was Auction 73 was the offering of a total of 1,099 licenses, broken up as shown in the table below. Notice the aggressive build-out requirements; these were established to prevent speculators from tying up spectrum without providing any beneﬁt to consumers. Block D was the only nationwide license available, and is a very attractive space, as it is at the upper end of the spectrum. However, this spectrum was limited since it could be used commercially only when not needed for emergency communications. The winning bidder would be obligated to participate in a public/private partnership to build an emergency communications system, and would yield use of the airwaves in case of emergency. With that condition came especially stringent construction requirements. Why It’s Important And why was this auction so important? The biggest reason, of course, is that there is very little spectrum unclaimed, so a band this large newly available is a rare opportunity. Additionally, this particular spectrum has characteristics that make it promising for long ranges and high power, including the ability to send signals into buildings. After all, it was used to broadcast television, which consumers expect to come into the house; as opposed to cellular signals, which are often lost once indoors. A tower broadcasting at 700 MHz is estimated to cover twice as many square miles as one broadcasting at 1900 MHz. This is considered particularly good for wireless broadband transmission. These technical characteristics and the unusually permissive use for it make the spectrum very appealing for all number of business ventures. The Outcome At the end, Auction 73 had 1090 winning bids and made almost 19 Build out Rules—Must provide signal coverage and service to: % of geographic area Within # of years 4 End of license term 4 End of license term 4 End of license term 4 End of license term # of years 4 7 10 Block # Licenses Offered License Type Bandwidth A 176 Economic Area (EA) 12 MHz (698-704 / 728-734 MHz) 35 70 B 734 Cellular Market Area (CMA) 12 MHz (704-710 / 734-740 MHz) 6 MHz (722-728 MHz) 22 MHz (746-757 / 776-787 MHz) 35 70 35 70 40 75 Population E 176 Economic Area Regional Economic Area Grouping (REAG) C 12 D 1 Nationwide 10 MHz (758-763 / 788-793 MHz) 75% 95% 99.3% Fall 2008 COMMUNICATIONS CROSSROADS 15

Table of Contents Feed for the Digital Edition of Communications Crossroads - Fall 2008

Communications Crossroads - Fall 2008 Up Front Contents TeleBites The Urge to Merge The 700 MHZ Auction: Results and Speculation Industry Calendar Advertisers DotCom Index to Advertisers People Straight Talk

Communications Crossroads - Fall 2008

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