Economy doesn't appear to hurt 700 MHz auction
Fears about the economy's impact on the 700 MHz auction have been unfounded. After 26 rounds of bidding, the auction has raked in more than $18 billion in provisionally winning bids, exceeding the FCC's expectations of between $10 billion and $15 billion.
The auction comes at a time when a meltdown of the U.S. housing and subprime mortgage markets is hurting the ability of companies to raise money. Last month, FCC Chairman Kevin Martin said he wasn't sure this was the right time to move forward with an auction but that the FCC's hands were tied because Congress requires the agency to proceed. Last week, Martin was singing a different tune: "It will probably exceed any other auction that we have had in the past," he said.
We still could see some impact of the economy on the auction, especially when it comes to rural telcos and small wireless ISPs. They don't have access to the capital larger bidders do. Moreover, it doesn't appear the D Block of 700 MHz band, the spectrum that is supposed to be set aside for a nationwide public-safety/commercial network, will get the minimum $1.3 billion bid set by the FCC. Only one bid was made on that Block, for $472 million. Perhaps the real test of the economy's impact will be whether non-traditional players--those whose core business isn't building wireless networks--were aggressive in the bidding.--Lynnette
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Posted by Amitabh Kumar | February 5, 2008 - 9:57am
The continuous round of biddings have been like a turning jackscrew and finally the bidders have reached the stratosphere. These bids have dwarfed any other bids made for spectrum and that too by a large margin. Why so much euphoria for terrestrial spectrum?
It is almost certain that the bidders will be looking beyond the traditional DTV transmissions onto broadband wireless of the WiMAX variety, though not yet a part of the WiMAX profiles defined till date. &00 MHz spectrum gives a second lease of life to companies which have missed the action on the mobile front as well sa to those who wish a new positioning in the broadband wireless broadband, which will be the new face of the next generation internet. It meets the requirements of city wide connectivity and is application as well as access independent. There has been a growing realization that the existing video heavy applications have already outgrown the capabilities of current generation mobile networks and many companies are willing to bet much more on a new disruptive medium.
Well, 700 Mhz band is going to be it, if the bids have any logical reasoning. The band , incidentally is far better suited for higher reach and speeds than the 3GHz bands currently in use.
It is exciting because the companies which emerge as winners will also need winning applications to use these airwaves, with the WiMAX forum and other bodies playing ball.
Unfortunately it also raises the valuation of companies which already hold spectrum,in whichever band ( and specially the mobile WiMAX band of 2.5-2.7 GHz) manyfold, a spectrum which was once given away at throwaway prices in comparison to what is happening today.
More information
http://www.wimax-tv.info/
