South Carolina is offering to lease a huge 1.59 GHz statewide swath of 2.5 GHz EBS wireless spectrum to what it hopes will be an eager audience of broadband wireless service providers that answer an RFP by Feb. 16.
The timing, which seems a little strange considering today's economy, is at least partly due to inertia. The state legislature has been fiddling with a bevy of EBS licenses held by the South Carolina Educational TV (SCETV) since 2007, and only recently formed the South Carolina EBS Commission (SCEBS) which released the RFP.
Bidders will have two broad options. They can lease 75 percent of the spectrum, which would give SCETV the opportunity to preserve some for future use for educational purposes, or they can lease up to 95 percent of the spectrum as allowed by FCC rules and regulations, said Gary Pennington, an attorney in the Pennington Law Firm in Columbia, S.C. and chairman of the SCEBC.
The commission directly contacted a known group of potential buyers, including ILECs, CLECs, wireless carriers and the new breed of WiMAX players like Clearwire and Digital Bridge. To make sure it was covering all its bases, it also hired Spectrum Bridge to "put out the word" and John Mansell Associates to develop a ballpark figure of how much the spectrum might be worth.
"I'm trying to value the thing and it's a little tough," admitted John Mansell, president of John Mansell Associates. "EBS spectrum, like any other spectrum, the real value is in the major markets; Charleston, Greensboro, Spartanburg and Columbia."
The question is who wants, or, possibly better yet, who can afford the spectrum? Sources say Digital Bridge, with some Cisco backing, is interested and it's likely this should draw Clearwire's attention. Of course the national wireless players might want it for 4G expansion and local or regional ops might see good use for a chunk of it for private or public business concerns.
With the RFP process still working, nobody's talking value other than to acknowledge, as Mansell did, that "it's one of the biggest single auctions of EBS spectrum."
While it's strange to find a block of bandwidth this big still available, it's even odder it's been offered in the worst economy in decades. Most likely the timing is bad because legislative bodies traditionally move at sloth speeds but some rumors claim a national wireless carrier heavily lobbied the legislators against taking any action.
Mansell dismissed that notion but did agree "the timing in South Carolina could be better."
The timing is also serendipitously good. The Obama administration has embraced broadband with an almost New Deal-like zeal, which is nice and potentially helpful but maybe a little misguided, said Craig Settles, an industry watcher and president of Successful.com.
"We're not trying to build the interstate highway system in digital form," Settles said. "It's a nice analogy but it's a wrong implementation for this kind of technology covering this geographical map."
It is important that local authorities follow some kind of "national standards and recommendations" for best serving the public with the spectrum, he said.
South Carolina's RFP asks bidders for some definition of a "willingness to provide a lifeline broadband service to low income residents," Pennington said.
That's a good start, said Settles, but there also needs to be "some sort of standards for quality of service, interoperability and addressing the social needs with speed. Public interoperability is there because there's a public safety and even a commerce issue."
Public safety and commerce are part of the process, said Rick Rotondo, chief marketing officer of Spectrum Bridge, because "there is an opportunity for municipalities, public safety agencies and the like to make their case for this spectrum--or at least part of it."
Spectrum Bridge's job is "to be sure that the RFP had maximum exposure ... to make sure that we were targeting non-traditional possibilities, things like municipalities, things like public safety, potentially regional businesses, making sure that the local ILECs and CLECs in South Carolina also understood they could bid on portions of this spectrum, not just the whole thing," he said.
The opportunity is a breath of fresh air compared to the stale uses other states have proffered for wireless spectrum, Settles said, who pointed to New York State where the government put aside $2 billion to build a statewide network.
"The New York thing started in 2004 and the farthest they've gone is to have a couple of pilot projects, and those didn't even work well," he said. "South Carolina's position is probably better."
Probably.
"The state really took a different approach than everyplace else," said Rotondo. "They've bundled it all up and said, ‘Here's the whole enchilada; you can bid on this as a part or whole or by channel block or whatever you want to do. Here it is.' It's a massive amount of spectrum. This isn't going to happen again."