FCC auction reaches $2.8B for 700MHz wireless licenses
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At the close of the first full day of&#160;bidding for 700MHz wireless spectrum&#160;Thursday, the Federal Communications Commission reported nearly $2.8 billion in provisional winning bids.There were 1,122 new bids filed in the second of two rounds that was held in the afternoon. The total value of all provisional bid winners jumped 15 percent from the morning bidding round, when $2.4 billion was offered.A total of 1,099 licenses can be bid upon, although only 902 had received bids by the end of the day.All the bids are filed anonymously and bidders are prohibited from publicly discussing their bids in an effort to reduce anticompetitive behavior, the FCC said.Computerworld is an InfoWorld affiliate.
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A handful of people who bid in the disastrous C-Block PCS auction in 1996 plan to participate in the upcoming 700MHz contest despite warning signs indicating the potential for similar troubles.Like the earlier auction, the 700MHz auction is set to occur in a faltering economy, presenting challenges to license hopefuls needing cash. Yet, just like that ill-fated auction more than 10 years ago, an oddball collection of participants plan to bid, this time including the Missouri Farmers&#39; Union, the Roman Catholic Diocese of Brooklyn, and Disney.The C-Block PCS auction was infamous because it was designed not just for companies with access to billions of dollars but for entrepreneurs interested in getting into the wireless industry. Postal carriers, lawyers, and doctors quit their day jobs and invested their savings, confident that U.S. Federal Communications Commission (FCC) incentives would help them make it big.But the auction turned into a debacle. Of the original 255 bidders, 89 emerged with licenses, and only a handful of them actually started businesses. The rest went bankrupt, sold their licenses for pennies on the dollar, or returned them to the FCC in an amnesty program.Take Vince McBride, an approved bidder for the upcoming 700MHz auction who lives in San Diego and has won and lost in several auctions. &quot;There are ups and downs, but I keep trying,&quot; he said.McBride was a postal carrier who sunk his life savings into the PCS auction in 1996. A series of lawsuits delayed the auction and then the award of licenses. During that time, Wall Street soured on the wireless market and license winners, who bid prices sky high based on attractive payment terms set by the FCC, struggled to finance their wins. McBride got lucky and returned his licenses to the FCC for little loss.Then the FCC reauctioned licenses and McBride won a new one, which he managed to sell for a nice profit. But in a subsequent reauction, he won another license that was later repossessed by the FCC, which was forced to give it back to the original winner after a series of lawsuits.McBride&#39;s sometime partner Scott Reiter, an emergency room physician who splits his time between Santa Monica and the Philippines, has had a similar series of wins and losses in FCC auctions. He too plans to bid in the upcoming auction. Reiter won a few licenses back in 1996 and shortly after got a few good offers from operators interested in buying them.&quot;I got greedy, basically,&quot; he said. He held out for better offers, which didn&#39;t come, and eventually had to sell his licenses at a loss.Reiter was undeterred, though. He entered the 2002 auctions for 700MHz licenses --&#160;back before there was a solid deadline for when TV broadcasters had to vacate the spectrum. He bought licenses in three markets, later selling the spectrum for a nice profit to AT&amp;T.&quot;When I bought that spectrum, it went up in value like crazy,&quot; Reiter said. McBride also won 700MHz licenses then, later selling them to AT&amp;T. They both agreed with AT&amp;T not to disclose the purchase price.Bidders are currently in a quiet period during which the FCC forbids them to discuss their plans for the upcoming auction. But some of them say that because this time around there is a fixed date for when the spectrum will be available to buyers -- 2009, after the TV broadcasters must vacate it -- the value is easier to gauge than in the previous 700MHz auction. However, it may be difficult for some bidders to get credit these days, which could help keep prices down, they say.While many of the individual bidders insist they intend to build networks if they win the spectrum, many likely have other plans. &quot;I think many of them want to buy and resell it,&quot; said Nadine Manjaro, a senior analyst with ABI Research. A look at the result of the earlier 700MHz auctions, which distributed what&#39;s thought to be less valuable portions of the band, could be spurring big dreams for bidders.Aloha Partners, one of the biggest winners in those auctions, sold its licenses to AT&amp;T for $2.5 billion late last year. Aloha spent over $40 million at the auctions but also later bought licenses from other companies for undisclosed amounts. It is thought to have made a handsome profit.While much attention has been focused on the billions that big companies like Google had to put up to enter the 700MHz auction, some of the licenses could go for quite cheap, which could be attracting some of the individuals hoping to turn around and sell the licenses for a profit. Some licenses in small markets require as little as $10,000 in an up-front payment, Manjaro said.Still, for bidders with bigger aspirations, the sinking economy will likely harm their efforts, unless they already have secured funding.&#160;The recent collapse of Frontline Wireless, a company created by luminaries in the wireless industry to win 700MHz licenses, has raised concern among other bidders. &quot;They had a really strong team of players, and for them to not be able to secure the money shows the impact of the economy,&quot; Manjaro said.One difference in the rules for this 700MHz auction compared to previous contests that could affect individuals who participate is that bidders will be anonymous. That could cut back on potential collusion, a problem that many have said plagued previous auctions.Another auction change, however, likely works against the smaller players. This time, license winners have just four years to build out a portion of their networks. That&#39;s a relatively short amount of time for smaller winners to raise money and build a network.A number of other license winners from the C-Block PCS auction are also approved to bid in the upcoming auction. Bill McKell, CEO for Horizon Chillicothe Telecom, an Ohio telecommunications provider, is on the list. His company was one of the first winners from the C-Block PCS auction to launch a network, but it later&#160;returned the licenses to the FCC.These previous bidders seem prepared to go ahead with this auction despite warning signs that the market might not work in their favor, just like in the PCS auction from 1996. FCC Chairman Kevin Martin recently acknowledged that poor economic conditions could impact the auction because bidders might struggle to raise capital.But these smaller bidders must be gamblers. &quot;Sometimes you get lucky,&quot; McBride said.
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AT&amp;T and Verizon Wireless want to go up against other current mobile operators and some possible future competitors, including Google, in next month&#39;s&#160;auction for 700MHz wireless spectrum&#160;around the U.S.
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The bidding topped $3.7 billion on  the second day of the U.S. Federal Communications Commission's  auction of government-owned airwaves, but there were no new  suitors Friday for a closely watched block of spectrum to be  shared with public safety agencies.
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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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A nationwide block of&#160;spectrum in the 700MHz band being auctioned&#160;by the U.S. Federal Communications Commission received a high bid exceeding the &quot;reserve,&quot; or minimum, price of $4.6 billion on Thursday morning.A block of eight licenses covering the 22MHz C block of spectrum being sold by the FCC received a high bid of $4.7 billion in the 17th round of the 700MHz auctions, completed early Thursday. The C block is the portion of the 700MHz band on which the FCC will require open-access rules, meaning the winning bidder must allow outside devices such as mobile handsets from other carriers and must allow users to run outside applications on the network.Some critics have complained that the&#160;open-access rules&#160;would suppress bidding on the C block, but&#160;Google has pledged to bid&#160;at least $4.6 billion on the C block. Bidding is anonymous during the 700MHz auctions, so it&#39;s impossible to tell which company has the high bid.Through the 17th bidding round, high bids on the entire 62MHz of spectrum being auctioned totalled nearly $12.8 billion. The FCC and U.S. Congress had budgeted the auctions to raise at least $10 billion, but many observers had expected the auctions would raise much more than that.One block of spectrum unlikely to reach the FCC&#39;s reserve price is the D block, a 10MHz band of spectrum that would be paired with another 10MHz assigned to public safety agencies. The FCC required that the winning bidder build a nationwide voice and data network to be shared between commercial users and public safety agencies such as police and fire departments.After 17 auction rounds, the high bid for the D block stood at $472 million, far short of the $1.33 billion reserve price set by the FCC. That bid happened in the auction&#39;s first round on Jan. 24, and there&#39;s been no higher bids since then. If the reserve price is not met, the FCC would have to re-auction the D block.Many members of the U.S. Congress pushed for a public safety network, after emergency responders couldn&#39;t communicate with each other during the 9/11 terrorists attacks and more recent disasters. Police and fire departments in neighboring cities often use different devices on different blocks of spectrum.Critics have pointed to an FCC rule for the D block saying the winning bidder would have to give up millions of dollars in a deposit if it couldn&#39;t come to an agreement on network design with the Public Safety Spectrum Trust (PSST), which controls the public safety spectrum. Scott Cleland, founder of telecom analyst firm The Precursor Group, called that provision &quot;onerous.&quot;&quot;That is not a negotiation,&quot; said Cleland, speaking at a 700MHz forum Wednesday. &quot;Auctions are free markets, and people don&#39;t have to show up.&quot;The FCC may have to re-auction the spectrum without the reserve price and perhaps without public safety obligations, said Michael Calabrese, director of the Spectrum Policy Program at think tank the New America Foundation. The PSST could use its block of spectrum to negotiate service with the auction winner if no build-out rules are in place, he said.A PSST spokesman wasn&#39;t immediately available for comment on the bidding.
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Carnegie Mellon professor and telecommunications expert David Farber explains what's at stake in the January 2008 FCC auction of spectrum in the 700-MHz band -- spectrum that Google has expressed interest in.
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The U.S. Federal Communications Commission has approved the purchase by AT&amp;T of 12MHz of wireless spectrum that covers 60 percent of the U.S.AT&amp;T bought the spectrum from Aloha Spectrum Holdings. The spectrum, in the highly coveted 700MHz band, covers 196 million of the 303 million U.S. residents and includes 72 of the top 100 media markets in the country. Aloha acquired the spectrum in earlier FCC auctions and from other auction winners. This portion of the 700MHz spectrum is not part of the&#160;FCC auction&#160;now in progress.The FCC, in an order issued Monday, approved the sale despite concerns expressed by the commission&#39;s two Democratic members. AT&amp;T announced in October that it intended to buy the spectrum for $2.5 billion. The company said then it planned to use the spectrum for broadcast video or for two-way communications such as voice, data or multicast content.The 700MHz spectrum band carries wireless signals three to four times farther than some higher spectrum bands, making it optimal for long-range broadband networks.Commissioner Jonathan Adelstein said he voted to approve the deal because of a lack of public opposition, but he had concerns about the FCC&#39;s review of the deal.The agency&#39;s review &quot;lacks both substance and analysis in its review of whether, on balance, the transaction serves the public&#39;s interest,&quot; Adelstein said in a statement. &quot;We are required to do more than simply conclude that a transaction benefits the public and will not have an adverse effect on competition. I would have preferred to see a more thorough assessment weighing the potential public interest harms and benefits of this transaction and its impact on the mobile telephony market.&quot;Commissioner Michael Copps voted against the deal. The deal could have a large impact on a mobile voice and data market &quot;that has seen round after round of consolidation in recent years,&quot; he said in a statement.Copps also raised concerns about the FCC&#39;s review of the deal. The review &quot;contains only an extremely abbreviated analysis of the competitive effects of this change in ownership,&quot; he said.AT&amp;T, in a statement, said it was pleased with the FCC&#39;s decision. The deal will help AT&amp;T meet growing customer demand for wireless services, the company said.
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The U.S. sale of airwaves for  advanced wireless services grossed a record $13.9 billion when  it ended on Monday, and spectrum-hungry wireless carrier  T-Mobile USA, Verizon Wireless and a group of cable companies  were the highest bidders.
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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.
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A bidder on Thursday offered $4.71  billion for a key slice of wireless airwaves being sold by the  government, triggering a condition that the spectrum be  accessible to any device or software application.
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The FCC releases names of 266 companies officially planning to bid in the government's upcoming 700-MHz-spectrum auction. More than half those botched their initial applications, including big names like Verizon, AT&T,  Qualcomm and Alltel. They have until Jan. 4 to qualify for the auction.
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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 U.S.
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If the FCC's auction of former UHF bandwidth were to end here, it might raise over $19 billion. But with bidding activity slowing to a crawl, the Commission has one more tool in its arsenal to squeeze out some more value.
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AT&amp;T and Verizon Wireless want to go up against other current mobile operators and some possible future competitors, including Google, in next month&#39;s&#160;auction for 700MHz wireless spectrum&#160;around the U.S.The U.S. Federal Communications Commission on Tuesday released lists of accepted and incomplete applications for the auction, in which it will sell licenses to frequencies that are set to be vacated by analog TV stations. It has accepted 96 applications and reported 170 as incomplete. The latter need to be completed by Jan. 4.AT&amp;T and Verizon are not surprise entrants but are the country&#39;s biggest mobile operators. If either carrier won a portion of the spectrum that has been designated for use by any device and any service, it would have to open up its network more than any big U.S. operator ever has. Verizon has already unveiled part of a plan to further open its network.They were on the list of incomplete applications, along with smaller mobile operators Alltel and MetroPCS. Cable operator Cox Communications, an archrival of the telecommunications giants, is also preparing an application. And cellular technology giant Qualcomm, which is already building a mobile entertainment network on vacated TV channels, is also gearing up to bid. Would-be bidders with incomplete applications have until Jan. 4 to complete their paperwork.Google earlier this year&#160;offered to participate in the auction&#160;in return for the FCC imposing open-network requirements. The booming Internet company&#39;s involvement could drive up bids all around, helping the government reap its hoped-for $10 billion payday for the spectrum.&#160;Google&#39;s application&#160;has already been accepted, the FCC said Tuesday. So has that of Towerstream, a wireless broadband provider to businesses.One surprise applicant yet to complete its papers is oil giant Chevron.Participation by Chevron in the auction comes &#8220;out of the blue,&#8221; said analyst Jack Gold of J. Gold Associates. However, oil companies and utilities are big wireless users, so he can see why Chevron might be interested.Chevron, like Google, is unlikely to actually build a network, though, he said. &#8220;I can see them potentially winning but then becoming landlords, renting it out,&#8221; he said. For both companies, that decision wouldn&#8217;t be based on the cost of building a network but on the experience required: Neither company has any history of constructing and operating a wireless network, a complicated undertaking.Also Tuesday, the agency extended the Dec. 28 deadline for upfront payments in the auction to Jan. 4 and pushed back a mock auction until Jan. 22. The auction itself is set to begin Jan. 24.Nancy Gohring, in Seattle, contributed to this report.
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(InfoWorld) - T-Mobile USA Inc. came out the biggest spender in the U.S. Federal Communications Commission's Advanced Wireless Services spectrum auction, which ended Monday. Participants bid a total of nearly US$13.9 billion on 1,087 licenses to offer 3G (third-generation) mobile services in areas across the U.S. The auction began Aug. 9 and went on for 161 rounds. The radio frequencies could be used for services including data, voice and video on mobile devices. The auction is the first of two that should roughly double the amount of radio spectrum available in the U.S. for mobile services. The FCC is also preparing to auction frequencies around 700 MHz that have been used for TV broadcasts. Moving those to mobile use could take years. T-Mobile is playing catch-up against bigger carriers in introducing 3G services. Its bidding company, T-Mobile License LLC, had the winning bids on 120 licenses and will pay almost $4.2 billion for its spectrum. All told, the licenses it won could reach almost 475 million people, a number greater than the U.S. population. There was a wide variety of licenses up for auction, ranging from local to regional coverage. The five biggest bidders, led by T-Mobile, represented the country's biggest cellular companies. Cellco Partnership, representing Verizon Wireless Inc., came in second place with $2.8 billion in bids for 13 licenses. SpectrumCo LLC, representing Sprint Nextel Corp. and cable partners, bid almost $2.4 billion for 137 licenses and Metro PCS AWS LLC bid almost $1.4 billion for eight licenses. Cingular Wireless LLC, represented by Cingular AWS LLC, came in fifth with bids of more than $1.3 billion for 48 licenses. Overall, more than half of the 104 winning bidders that participated were certified as small businesses, according to the FCC. The agency put 1,122 licenses up for auction. The unsold licenses will be made available again in a future auction. The winners need to make down payments within ten days after the FCC puts out a public notice on the close of the auction. In the same time period, they have to submit long-form applications for the licenses.
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A federal airwaves auction starting today is expected to bring consumers improved wireless broadband services and will likely provide the last opportunity to create a nationwide challenger to the big cellphone companies.