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« First Hot Shoe Drops: Eye-Fi Tied into Nikon Camera | Main | Reserve Price Met for Important Licenses in 700 MHz Auction »
The future of competition for broadband and cellular wireless hits one milestone, close to other: The 700 MHz auction currently underway will distribute thousands of licenses to entities across the country for effective, widespread distribution of broadband, voice, and other services. The C Block is the most hotly contested block, representing a set of licenses that covers the entire U.S. The reserve bid for the block was $4.6b; the current high bid is $4.3b, while the next qualifying bid must be at least $4.75b. The auction as a whole had to gross over $10.3b, and that mark was also hit around noon with $10.8b bid so far. That means that it’s extremely likely now that the auction will conclude successfully, and that the C Block will be won. Google at one committed to the reserve price, so if they’re bidding—bidders are anonymous in this auction—they will make at least one bid to cross that mark.
The mixed public safety/private use D Block is still up for grabs. The reserve price is $1.4b, but the bidding has hit only over $470m. If the bids don’t reach the reserve price, the block will likely be reformulated. Harold Feld alleges monkey business in how the rules for the band were set for a putative winning bidder. In short, he writes that a one-time potential bidder moved into an advisory role to the body that will control the block for public-safety interests. He says that would allow them to set unreasonable terms for a winning bid, and that the FCC refused to set rules that would prevent unreasonable terms from being proposed. Thus, Frontline Wireless, the firm most likely to operate the D Block, shut down, as they couldn’t come up with a strategy that was financially sound. (The auction rules state that if you default, you forfeit the difference between your bid and the ultimate winning bid; Frontline could have easily been out hundreds of millions of dollars in that scenario.)
Update: By day’s end (Round 16), overall bids reached $11.5b, but no new bids had been registered for either the C or D Blocks.
Posted by Glennf at January 30, 2008 12:24 PM
Categories: Financial, Spectrum
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One area that is not been reported on is the aggressive activity in the Lower Band B Block where Regional and Local Service Providers are bidding on spectrum in their CMA. If these folks can win a License in their markets they can look to a series of vendors (Airspan, Telsima and SOMA)who will be making new Radios (2009) using WiMAX feature sets in the 700Mhz spectrum-much to the chagrin of the WiMAX Forum and their 2.5Ghz systems. These vendors are also looking to address the new White Spaces spectrum (400Mhz+-) that Google has been focusing on and will make sure it gets release as an Unlicensed spectrum.
In addition, these new WISP do not have to wait for a Standards based 700Mhz WiMAX product (as a Nationwide LIcensee would) in that they will only be operating in their own CMA and can move very aggressively.
The big Carriers are also desperate to keep these new 700Mhz/WiMAX based systems from gaining traction in the markets since they effectively represent a potential 4G competitor to their future Lite Tech scheduled for release in 2011/2012.
Posted by: Jim A at January 31, 2008 5:37 AM