Communications Crossroads - Fall 2008 - (Page 17)

How the auction played out: Blocks A, B and E: Varied Verizon Wireless won 25 licenses in Block A and 77 in B. AT&T Mobility (this is “essentially Cingular beefed up with AT&T’s Aloha Partners acquisitions” according to one pundit) invested heavily here, with 227 licenses in Block B. QualComm bought only a small number of licenses, in Blocks B and E licenses, but analysts speculate that the company may be planning to do a joint venture with AT&T and/or Verizon, which makes those few licenses a bit more interesting. Other winners in these blocks include, for Blocks A & B only: Cavalier Wireless, Cellular South, CenturyTel Inc., Cox Communications, US Cellular Corporation, and for all three Blocks, Chevron. Vulcan Spectrum LLC bought two licenses in Block A. MetroPCS Communications won only one bid, but it was an A Block for Boston. EchoStar Corporation, a satellite television company, paid $11 million for 168 licenses in the E Block. The FCC Chair commented that these results amount to small and rural providers winning “spectrum that covered almost the entire country.” Block D: No Sale The consensus seems to be that the reasons Block D did not sell were a very high reserve price ($1.33 billion), stringent rules for build out, and confusing rules. The buyer would have been required to build a network to meet public safety needs. If the buyer did not meet those needs, or couldn’t reach agreement with the FCC over what was to be done, the company would be subject to enormous ﬁ nes. Block C: Open Access Verizon Wireless won seven of the ten licenses available here, despite originally opposing the open access requirement. Chairman Martin credits discussion of this auction with changing their opinion, as well as that of many smaller wireless companies. In his written statement, Martin says that “In less than a year, many wireless providers evolved from vocal opponents to vocal proponents, embracing the open platform concept,” and that “Less than a month after the auction concluded, this interest now appears to be shared across the industry…” billion dollars after application of bidding credits (more than 19 billion before credits). A third of the spectrum is now designated as open access. In his formal statement on the closing of the auction, FCC Chairman Kevin Martin stated that the open platform will allow consumers to make their own choices of wireless devices and software to be used in those portions of the spectrum. He went on to say that this would “foster innovation on the edge of the network” and that this would move the results of innovation to the consumers swiftly. Also, 35 percent of the licenses awarded went to 56 bidding companies designated as small businesses. And the FCC noted that “a bidder other than a nationwide incumbent won a license in every market.” And in cases where a larger communications company won the bid, Chairman Martin pointed out that the auction will still offer consumers one more choice than they had before. All of this prompted the FCC to proclaim the auction a success. However, the bids for Block D did not reach the reserve price. Since the Block D license did not sell, the emergency communications system still needs a solution. The Future Few auction winners have been willing to talk on the record so far about their plans for the spectrum. Apparently no one wants to give the competition any hints of what’s to come. The fact that the bidding was done anonymously and that the legal uses of the spectrum are much wider than ever before have combined to make protection of plans much more feasible than usual— and perhaps more appealing. Pundits and industry insiders are predicting the new licenses will produce rapid expansion in rural access to wireless and Internet, and that increased competition in the bigger metropolitan areas will be good for consumers, but no one really knows exactly what any one company will do. Still less do we know the future of the industry in the aggregate. Something will have to be done about improved emergency communications. FCC Chairman Martin He still believes the public-private partnership is the right approach, but acknowledges that more research is needed into exactly how that could be made to work, and could be made appealing to the private side of the equation. Was the auction a success? Only time will tell, but the build out requirements mean that time is limited. By 2013, we should have a very good idea of whether Auction 73 fulﬁ lled hopes of cheap and reliable wireless broadband, provider competition in all markets, and increased communications access across the country. Fall 2008 COMMUNICATIONS CROSSROADS 17

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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