Spectrum Auction: Now Comes the Action-Packed Bonus Round
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The Federal Communications Commission said that,  starting Wednesday, new rules will apply that will encourage more bidding and hasten the auctionâs end.
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The FCC auction of 700-MHz spectrum, which started January 24, is one of the biggest sell-offs of radio spectrum in years, and it's expected to raise at least $10 billion. Wired News explains what's at stake with this list of questions and answers.
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(InfoWorld) - New broadband providers should be given a better chance of winning pieces of valuable wireless spectrum to be auctioned by early next year, several groups said Friday. The groups, including Google, startup Frontline Wireless, and consumer advocate Public Knowledge, called on the U.S. Federal Communications Commission to change the way it auctions spectrum when it sells off 60Mhz of spectrum to be freed up when U.S. television stations move to all-digital broadcasts. The auction of the coveted 700MHz band of spectrum -- which allows broadband-speed wireless signals to travel farther and penetrate buildings better than some other bands -- presents the best hope U.S. consumers have of a third major broadband service to challenge cable and DSLÂ carriers, said Michael Calabrese, director of the Wireless Future Program at the New America Foundation, a think tank that hosted Friday's spectrum forum. "If we do nothing -- if we take the [auction] rules we've used for the last 10 years, the same incumbents are going to win," added Harold Feld, senior vice president of the Media Access Project, an open media advocacy group. "There is no competition fairy. There is no magic that's going to happen that if we just deregulate enough, somehow a new competitor is going to emerge." The groups at the spectrum auction forum didn't agree on all the details, but they suggested that the way the FCC has auctioned spectrum in the recent past has favored large incumbent telecom carriers. The FCC is expected to set the rules and conditions for the auction of the 700MHz band of spectrum in the coming weeks. The groups called on the FCC to require that the winners of a chunk of the spectrum allow "open access" -- sell access to competitors on a wholesale basis. The open access requirement would allow a nearly unlimited number of competitors to offer wireless broadband services, said Gigi Sohn, president of Public Knowledge. The groups also want the FCC to conduct anonymous auctions -- where bidders wouldn't know whom they're bidding against. In the past, large wireless carriers have used transparent auctions to drive up prices on chunks of spectrum being bid on by small competitors, said Gregory Rose, an econometrician and game theorist working with open access proponents. In many cases, many larger carriers then dropped their bids after the smaller carriers were eliminated, he said. Some carriers have also engaged in retaliatory bidding against other companies that bid on spectrum they were interested in, he said. The retaliating bidder will bid on spectrum the second company is interested in, "as a signal to say, 'back off on the license I want, or I will drive the price of the license you want through the roof,'" Rose said. VerizonÂ and AT&T, two large broadband and wireless carriers, have declined to comment on the upcoming auctions. But some free-market think tanks and carrier trade groups have been vocal in opposing open access requirements for the spectrum auctions. Scott Cleland, chairman of advocacy group NetCompetition.org, questioned Frontline Wireless' open access goals in a blog post Thursday. Frontline "wants the FCC to auction spectrum to them requiring ... open access -- so effectively no company will be able/or want to pay much for the 700 MHz spectrum -- and so Frontline Wireless could capture this most valuable spectrum available at the market-managed price of pennies on the dollar," he wrote. But Frontline chairwoman Janice Obuchowski, speaking at Friday's forum, noted that the two largest wireless carriers are gobbling up market share, and without new auction rules, that will continue to happen after spectrum auctions. She called for the FCC to auction off the 700Mhz spectrum in small chunks that smaller companies can afford, breaking with Google's call for larger blocks to be auctioned. The goal of the auction should be for "true, robust competition" to emerge, she said.
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(InfoWorld) - The U.S. government has given away between $140 billion and $480 billion worth of radio spectrum to wireless providers and broadcasters since 1993, according to a study released Tuesday. The New America Foundation, a think tank calling for new ways to manage U.S. spectrum, said most of the giveaway has come not through underperforming auctions but through "below the radar" lobbying tactics by spectrum holders. Much of the spectrum giveaway comes through strategies like case-by-case waivers for flexible spectrum use granted by the U.S. Federal Communications Commission (FCC), poorly defined spectrum boundaries, and spectrum holders polluting neighboring spectrum, said J.H. Snider, author of the study. In many cases, the FCC has automatically renewed spectrum licenses even through spectrum law allows for licensing for "limited periods of time," he added. The U.S. government raised about $40 billion in more than 80 spectrum auctions since 1993, Snider said at a forum in Washington, D.C. But wireless providers and broadcasters, in financial reports to the U.S. Securities and Exchange Commission, have given that spectrum a value of about $180 billion, he said. The spectrum is likely worth much more than those estimates, he added. Using past auction figures, the value of the spectrum could be more than $520 billion, he said. The U.S. government is losing "mega dollars," said Bob Edgar, a former Democratic congressman and president and CEO of Common Cause. "We've got to generate some reasonable recovery" of the spectrum value, he said. He compared the current auction model to New York City licensing hot dog stands and giving the vendors the authority to build skyscrapers next door. Edgar, also a United Methodist Church minister, said the U.S. government could provide health care to the poor and several other services with the money if it charged the full amount for the value of the spectrum. Gary Bass, executive director of government watchdog group OMB Watch, agreed and called for more spectrum to be opened up to multiple users. "What would be our reaction if we gave away our interstate highway system to General Motors, then General Motors decided what cars were allowed on the highways?" he said. Snider called for a less complicated spectrum policy in the U.S. and a more open process for auctioning and making changes to spectrum allocations. Right now, only a few experts understand spectrum policy, he said. The FCC needs a new way of auctioning spectrum "so the public can value its worth and is motivated to get involved in the process," he said. Participants in the New America forum said it's important to look at FCC spectrum policy now as the agency prepares rules to auction about 60MHz of spectrum in the valuable 700MHz band. That auction is set to happen by early next year. An FCC spokesman didn't immediately respond to a request for a comment on the New America study, but CTIA, a trade group representing wireless carriers, said recent auctions have been successful in raising money for the U.S. government. An advanced wireless services auction that concluded in September raised $13.7 billion for the U.S. government, said Joseph Farren, CTIA's director of public affairs. That auction was "an enormous success" and shows major changes aren't needed, he said. New America has called for open access rules that would require winners of part of the 700MHz spectrum to sell the spectrum at wholesale rates to competitors. Such proposals would decrease the value of the spectrum and limit bids, Farren said. "The most effective and efficient way to action spectrum in the public interest is thorough an open and fair process where all providers are on equal footing," Farren said.
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AT&T Inc  said on Friday it  plans to participate in an upcoming government auction of  airwaves in the 700-Megahertz spectrum band, but it is still  deciding whether to bid for a portion of the spectrum reserved  for open access.
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New broadband providers should be given a better chance of winning pieces of valuable wireless spectrum to be auctioned by early next year, several groups said Friday.
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In what will certainly come as relief to advocates of open access rules for wireless services, someone this morning placed a bid for the jewel-in-the-crown "C-block" of spectrum just above the minimum reserve trigger price.
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Bidding on the most attractive block of wireless frequencies in the government auction exceeded the $4.6 billion minimum.
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The FCC's auction of prime wireless spectrum could create new competition for broadband Internet. Or not. The bidding rules will be key.
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Five separate blocks of spectrum up for auction by the FCC are eventually expected to net the federal government at least $10 billion.
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As the FCC opens a multibillion-dollar spectrum auction, questions remain, including  whether the auction will produce a winning bidder that will challenge telecom and cable-based broadband providers with a national wireless broadband network.
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An anonymous bidder has met the reserve price for the so-called C-block of 700 MHz in the FCC's ongoing auction, virtually guaranteeing that the FCC's open-access conditions will be met. Open-access advocates greeted the news with mixed reactions.
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The high bids totalled $3.2 billion in the U.S. Federal Communications Commission&#39;s&#160;auction of wireless spectrum licenses in the 700MHz band&#160;after three rounds and a day and a half of bidding.
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AT&T, Verizon Wireless, Google and Chevron are among the applicants for next month's 700MHz spectrum auction.
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Top bidders put up a total of almost  $2.78 billion on Thursday in the opening rounds of the Federal  Communications Commission's auction of coveted U.S.  government-owned airwaves.
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More than 200 companies qualified to bid in the upcoming auction of public airwaves that could raise as much as $15 billion for the U.S. Treasury. But it's not clear whether any of those companies will fulfill one of the key goals of the auction -- to attract a bidder that would build a wireless...
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Bidding begins on Thursday in a crucial auction of government-owned airwaves that is expected to help set the future course of the U.S. telecommunications business.