Bits: Spectrum Auction: C Block Hits Reserve 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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Within weeks, the U.S. Federal Communications Commission is expected to set conditions for the auction of the most valuable wireless spectrum still available in the United States.
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(InfoWorld) - Google and Intel have already expressed interest in the forthcoming 700MHz spectrum auction. Now, speculators say Apple may throw its hat into the ring. TheÂ auctionÂ is creating a bit of a frenzy because the winner will obtain some of the last available prime spectrum, ideal for delivering broadband wireless Internet access. The U.S. Federal Communications Commission (FCC) expects to auction it off next year. While Google has said that it may bid in the auction, Apple's participation is pure speculation, and analysts appear split on whether it makes sense for theÂ iPhoneÂ maker to become a network operator. Apple's entry into the carrier business, while interesting to speculate, is difficult to imagine since the company already has a "sweetheart deal" with AT&T, said Michael Gartenberg, an analyst with Jupiter Research. In an unusual arrangement for the mobile industry, Apple is thought to receive a portion of the monthly service revenue that AT&T earns from iPhone customers. AT&T is the iPhone's exclusive carrier. Gartner analyst Van Baker finds it "highly unlikely" that Apple would be interested in buying the spectrum. "It's a very different business than they're in, and it's not something they have a whole lot of expertise in," he noted. Apple could decide to partner with another company that has more experience in the mobile operator business, which could make more sense, Baker said. Still, the arrangement between Apple and AT&T looks beneficial to both companies, so there probably isn't a significant incentive for Apple to want to change that setup, especially because the operator business comes with "lousy margins," he said. However, Apple might have at least one good reason for wanting to operate a network, said Avi Greengart, an analyst with Current Analysis. "They do like to control the end-to-end experience," he said. While becoming a mobile operator would be a "tremendous stretch" for Apple, it wouldn't surprise Greengart if Apple was considering it. An Apple network would likely be very tightly integrated with Apple products and come with very simple pricing, he said. Such a strategy could have a ripple effect across the industry. Operators tend to watch what competitors are doing and make adjustments to their own strategies accordingly, he said. Greengart and the others cautioned that they hadn't heard directly from the company or other sources that Apple was considering the auction. "But they're pretty good about being tight-lipped," Greengart said. Apple is known for being very secretive, with big announcements leaking out only days in advance, if ever. BusinessWeek first reported on the rumor that Apple might be interested in the spectrum auction.
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(InfoWorld) - Several companies have challengedÂ spectrum auction rulesÂ recently set by the U.S. Federal Communications Commission, with Frontline Wireless protesting that the auction of the 700MHz band to be auctioned in January could shut out small bidders. In addition, AT&T has asked the FCC to reconsider requirements for the winning bidder of a block of spectrum to be used to build a nationwide broadband network for public safety agencies. The rules require bidders to reach a service agreement with public safety officials before the auction, and the FCC's decision to deny bidders the spectrum if an agreement is not reached is "an extreme penalty," AT&T said in its petition. AT&T and Frontline, a startup made up of government and wireless industry veterans, filed petitions for reconsideration of the auction rules with the FCC Monday. They were among 10 companies that filed petitions in the last week asking the FCC to reconsider the auction rules it set in July for the 700MHz band of spectrum being vacated by U.S. television stations. The FCC is scheduled to auction 62MHz of spectrum in the 700MHz band beginning Jan. 16. The FCC set a reserve price of $10 billion for the entire 62MHz, but many observers believe the auctions will raise much more than that. The spectrum is currently controlled by U.S. television stations using channels 52 to 69. The U.S. Congress in late 2005 passed legislation that requires the stations to move to digital broadcasts and abandon this spectrum by February 2009. Frontline raised several objections about the auction rules. The company and someÂ consumer groupsÂ had called for the FCC to require that the winning bidder of a portion of the spectrum resell the spectrum at wholesale rates, but the FCC declined to do so. FCC members talked about including small businesses in the auction, Frontline noted. But the FCC denied bidding discounts, called credits, for small business wholesalers, Frontline said. Small businesses can't compete against large wireless carriers unless they adopt a wholesale model, the company said. "Wholesaling is also the only model a new nationwide wireless network operator could realistically afford to adopt, given the massive costs associated with providing retail service -- consider Verizon's 2,300 retail outlets and its $1.9 billion annual advertising budget," Frontline said in its petition. Frontline also suggested the reserve, or minimum prices, for two blocks of spectrum are too high. Frontline objected to a reserve price of about $1.3 billion for a 10MHz portion of spectrum to be paired with 12MHz set aside for emergency response communications. Frontline said the $4.6 billion reserve is also too high for another 22MHz of spectrum, for which the FCC adopted so-called open access rules. If the reserve price is met, the FCC will require the winning bidder to allow customers to bring wireless devices from other carriers and prohibit the winner from blocking or slowing competing Web content. Under the FCC rules, both blocks of spectrum would be re-auctioned under new rules if the reserve prices aren't met. "The unlawfully high reserve prices will nullify or disrupt and damage the Commission's carefully considered decisions as to the highest and best use of this spectrum, encourage bidding strategies that defeat these sound allocations decisions and seriously reduce auction revenues," Frontline's lawyers wrote. Earlier this month, Verizon Wireless asked the U.S. Court of Appeals for the District of Columbia Circuit to review the FCC's decision to require open-access rules supported by Frontline and some consumer groups. Those rules are "arbitrary, capricious, unsupported by substantial evidence and otherwise contrary to law," Verizon Wireless said in a brief filed with the court.
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The upcoming 700MHz spectrum auctions by the U.S. Federal Communications Commission (FCC)&#160;have drawn bid applications from giant companies including Google and AT&amp;T. But a number of small companies and individuals have submitted bid applications as well.
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Several companies have challenged spectrum auction rules recently set by the U.S. Federal Communications Commission, with Frontline Wireless LLC protesting that the auction of the 700MHz band to be auctioned in January could shut out small bidders.
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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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Interest rates on short-term Treasury securities were mixed in yesterday's auction. The Treasury Department sold $19 billion in three-month bills at a discount rate of 2.210 percent, up from 2.195 percent last week. An additional $17 billion was sold in six-month bills at a rate of 2.380 percent, down from 2.395 percent.
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The upcoming 700MHz spectrum auctions by the U.S. Federal Communications Commission (FCC)&#160;have drawn bid applications from giant companies including Google and AT&amp;T. But a number of small companies and individuals have submitted bid applications as well.Late Tuesday, the FCC announced that it had accepted bids from 96 applicants and has another 170 applications that are incomplete for the auction of highly coveted spectrum that can be used for voice or wireless broadband service.Some of those applicants may not complete their applications. In the FCC&#39;s advanced wireless services auction in 2006, 252 organizations submitted applications, and there were 168 qualified bidders.It&#39;s typical that several initial applicants will bow out before they have to submit deposit payments, said analyst Jack Gold of J. Gold Associates. &quot;When it comes to putting down earnest money, many [applicants] back away or can&#39;t get the money,&quot; he said.Applicants have until Jan. 4 to pay their deposits or resubmit their applications for the auction, which begins Jan. 24.The FCC designed the auction in an effort to attract small bidders. Up for sale is 62MHz of spectrum in the 700MHz band, now occupied by U.S. television stations. In late 2005, Congress passed legislation requiring U.S. TV stations to move to all-digital broadcasts and abandon analog spectrum between channels 52 and 69. The deadline for TV stations to end broadcasts in the 700MHz band is February 2009.The spectrum is broken up into five blocks, with three of the five blocks divided into small geographic areas. A 12MHz block of spectrum called the A block is divided up into 176 small geographic areas, called economic areas, as is the 6MHz E block. The 12MHz B block is broken up into 734 local areas called cellular market areas. Bidders can win multiple regional or local licenses.But the chances of small companies winning significant amounts of spectrum is &quot;pretty slim,&quot; Gold said. &quot;Any areas with significant population densities will bring in the big boys, who seek revenues from a mass market,&quot; he said. &quot;I suppose some smallish rural areas may be of less interest to AT&amp;T [or] Verizon, but these guys want true countrywide networks, so they will likely bid there anyway.&quot;Several unfamiliar names are among the prospective bidders who submitted incomplete applications:-- Office of Spectral Ecology, listed as an unincorporated association, with one board member, based in Montreal.-- Dragon Arch, listed as a corporation based in New York City.-- FaithFone Wireless, a Phoenix wireless carrier launched in September 2006. FaithFone is a self-described &quot;purpose-driven Christian mobile phone company, offering a cell phone service combining faith and family content.&quot; FaithFone&#39;s wireless service offers daily devotionals, Bible passages and a prayer of the day through text messaging.-- The Navajo Department of Information Technology.-- Part-15.org, a nonprofit organization for users of unlicensed wireless spectrum.Smaller companies with annual revenue of less than $15 million that have submitted complete applications include:-- Grain Spectrum, based in Sarasota, Florida, a minority-owned company focused on building wireless networks for government users.-- GreenFly, a mobile services provider founded in 2006 and based in Scottsbluff, Nebraska.-- Xpressweb Internet Services, an Internet service provider based in Kanab, Utah.The auction, expected to raise more than $10 billion, is likely to last several weeks. Many spectrum experts call the 700MHz band &quot;beachfront&quot; property because it can carry wireless broadband signals three to four times farther than some other spectrum bands.Since early December, applicants have been in an FCC-mandated quiet period. The FCC spectrum auction rules prohibit collusion on bidding plans.
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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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AT&amp;T hasn&#39;t decided whether it will bid for the highly desirable 700MHz band because it doesn&#39;t know if it can build a profitable business, given the open-access rules set for the wireless spectrum by the U.S. Federal Communications Commission in July.Calling the rules &quot;interesting,&quot; AT&amp;T&#39;s CEO Randall Stephenson said the company is hard at work crunching numbers and analyzing business scenarios, but hasn&#39;t reached a conclusion yet.&quot;Is there a business model there? I&#39;m not sure if there is or not,&quot; he said Friday at the&#160;Web 2.0 Summit, where he answered questions from conference chair John Battelle and from audience members.The FCC conditions, which include&#160;open-access rules on a third of the spectrum, have been a major source of controversy.The winner of 22MHz of spectrum must allow any wireless devices to connect to the network, permitting wireless telephone customers to use handset devices from other carriers. The winning bidder also can&#39;t block or slow down wireless and Web content from competitors.Some telecom carriers wanted no conditions, while some consumer advocacy groups and Google wanted the FCC to require that winning bidders also resell the spectrum at wholesale rates to competitors, something the FCC didn&#39;t adopt.The FCC is scheduled to auction 62MHz of spectrum in the 700MHz band beginning in January. The spectrum is ideal for long-range wireless telephone and broadband services, with signals that travel up to four times farther than in higher spectrum bands.&quot;It&#39;s a huge opportunity. It&#39;s beachfront property. When it comes to buying spectrum, it&#39;s the best you&#39;re going to find for a long time,&quot; Stephenson said.Data consumption on wireless networks is growing fourfold year over year, so a company&#160;such as&#160;AT&amp;T needs to bulk up on spectrum to keep up with the demand, he said.&quot;It&#39;s very obvious we&#39;re going to have to add to our spectrum holdings,&quot; he said.That&#39;s why AT&amp;T earlier this month reached an agreement to&#160;buy 12MHz of high-speed wireless spectrum&#160;in the 700MHz band from Aloha Partners for $2.5 billion.&quot;It&#39;s the first time, I think, that we&#39;ve ever paid $2.5 billion for a company that had no revenue,&quot; Stephenson said.The Aloha spectrum covers 196 million U.S. residents, including 72 of the 100 largest markets in the United States.In other matters, Stephenson said he was very satisfied with the&#160;iPhone deal between his company and Apple.&quot;I&#39;m not sure I could have asked for much more out of it than what we got,&quot; he said.Asked to comment on the decision to use the slower EDGE network for the iPhone, Stephenson said it was a request from Apple CEO Steve Jobs.&quot;He wanted a broad ubiquitous data network. The EDGE network is the only data network that covers the entire United States,&quot; he said. The situation will improve as AT&amp;T upgrades markets to 3G, he said.Stephenson acknowledged that AT&amp;T&#39;s directory assistance business is being challenged by ad-supported options from Internet companies&#160;such as&#160;Google.&quot;We better get our advertising-supported [directory assistance] model up fast,&quot; he said, adding that AT&amp;T is building such a service internally.On a lighter note, he said he&#39;s &quot;envious&quot; of Google and the success it has had with its business model. &quot;It&#39;s a great gig if you can get it,&quot; he said.(Grant Gross in Washington, D.C. contributed with this story.)
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The high bids totaled $3.2 billion in the U.S. Federal Communications Commission's auction of wireless spectrum licenses in the 700MHz band.
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Wireless carriers planning to offer next-generation wireless services have bid $13.9 billion in a spectrum license auction that ended Monday, the U.S. Federal Communications Commission (FCC) said.
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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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And Eric Schmidt will die in 2039 As the US Federal Communications Commission auctions off the coveted 700-MHz "C Block" - a prime portion of the American airwaves - bidding has topped $4.6bn. And that's a key number.â¦
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Interest rates on short-term Treasury bills came in mixed in yesterday's auction. The Treasury Department auctioned $19 billion in three-month bills at a discount rate of 5.010 percent, unchanged from last week.
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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.