The FCC’s upcoming wireless spectrum auction is supposed to offer beachfront property for the wireless industry. But not all of it offers oceanfront views: Some of the spectrum, apparently, is going unloved.
Last night, the FCC released a list of 214 approved bidders for the auction, which begins on Jan. 24. Among them: Google, satellite TV giant EchoStar, and a host of wireless giants like AT&T and Verizon Wireless. The big firms will be angling for big licence swaths that could help build a nationwide network, and smaller firms will look to pad their spectrum holdings with smaller, regional chunks. The minimum bid for the prime real estate — the “C” block — is $4.6 billion.
Then there’s the “D” block, a large section previously set aside for a joint private/public safety network. The block has a $1.33 billion reserve price, and stringent conditions for the winner: The company would have to build out the network to cover 99.3% of the population by 2019; other spectrum winners will only have to cover 75%. The winning bidder would also have to pay a $128 million, non-refundable down payment, and would have to give emergency responders priority access to the network during emergencies.
Last week, Frontline Wireless, the most likely bidder for that block, dropped out of the auction. It’s hard to see profit-obsessed firms like AT&T and Verizon, already making concessions for “open access” on other chunks of the airspace, bidding aggressively for that spectrum. So what happens if it goes unsold?
In its report released last night, the commission gave itself an option, buried in the footnotes: “If the reserve price established for the D Block of the 700 MHz Band is not satisfied by the results of Auction 73, the Commission may decide to re-offer that licence subject to the same service rules or reconsider the rules applicable to that block.” Translation: The FCC could relax some of the requirements to get the spectrum into active use. The WSJ reminds us today that the FCC could also give the spectrum to the highest bidder, even if no bidders reach the $1.33 billion reserve — which could lead to some interesting gaming.
But even that might not satisfy would-be bidders, especially the deep-pocketed, publicly held wireless giants. In a note today, Stifel Nicolaus analyst Blair Levin says it’s unlikely the FCC would strip all of the block’s requirements. “It may tinker with some of the particular aspects of the various conditions, but it will be virtually impossible to remove the core condition which requires the licensee to build out a network for the public safety community.”
See Also: What Would Paul Allen Do With Spectrum? Who Knows!
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