700 MHz Auction Likely Competitive, Though Public Safety Block Concerns Remain
Except for the public safety D-block, a headline magnet since Frontline Wireless disclosed it won’t bid, the 700 MHz auction seems to be on track, industry and regulatory sources said Tuesday. They cited the number of large entrants still in the running. Some 214 potential bidders made requisite down payments, including heavy hitters AT&T, Verizon Wireless and Google. Besides Frontline, U.S. Cellular and the Alaska subsidiary of Leap Wireless, most bowing out on down payments were small players not expected to play major roles in the sale.
Sign up for a free preview to unlock the rest of this article
If your job depends on informed compliance, you need International Trade Today. Delivered every business day and available any time online, only International Trade Today helps you stay current on the increasingly complex international trade regulatory environment.
“I think you could still have a successful auction, though the big question mark is the D-block,” said a wireless industry attorney. “There are a lot of potential bidders, including rural telcos that should be interested in the smaller spectrum blocks.” A second wireless industry attorney compared the qualified bidder list to that for 2006’s advanced wireless service auction, deemed a success. “There were 168 qualified bidders for the AWS spectrum, so there are actually more qualified bidders here, although many of them are small,” the lawyer said.
The plethora of rural players means regional carriers are “trying to protect their roaming businesses,” Janco analyst Donna Jaegers said. Rural carriers might not be in the auction to win, said Terry Cavanaugh, a lawyer working on the auction: “It will be interesting to see how many actually bid in Auction 73 as opposed to just preserving their rights for a potential Auction 76.”
The list of those making no down payments offered few surprises. The Navajo Department of Information Technology did not qualify. Nor did National Datacast Inc., a subsidiary of the Public Broadcasting Service that handles datacasting on PBS TV stations. The non-qualifying list mostly consisted of small phone companies and ISPs and other nontraditional types.
Alltel, ever more prominent as a national carrier, is on the list, though it sat out the AWS auction. Other intriguing bidders include energy giant Chevron, expected to focus on leases that would help its Gulf Coast oil and gas production. Cablevision and the Dolan family which, among other partners, will bid under new name CSC Spectrum Holdings LLC. EchoStar is in the auction, as is Frontier Wireless LLC. Microsoft co-founder Paul Allen filed to bid as Vulcan Spectrum. Cable operators Cox and Newhouse filed as the Wireless Inc. and Advance/Newhouse Partnership. Qualcomm qualified.
Allen probably wants to “supplement” 700 MHz spectrum won in previous sales, said Current Analysis’ William Ho. There could be cable implications, he added. “Although Vulcan is not blatantly cable… Charter Communications is also Paul Allen’s, so we [know] indirectly there is another cable player.” Qualcomm owns Channel 55 and probably will bid on Channel 56 -- the E Block -- to expand its MediaFLO business opportunities, Ho said. Buying the spectrum would boost the unit’s value, positioning Qualcomm to fetch a good price if it spins the unit off down the road, he added.
The list’s insights are veiled, sources noted. “There really is less to report on and analyze when the FCC does not publish the upfront payments,” Cavanaugh said. The bidder list is “not worthwhile to research” because many companies don’t use their real names, said GimmeCredit analyst Dave Novosel.