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1.
Feature Story /
"Sold"
-- said the FCC auctioneer to the highes bidders
at the end of Round
129 - Friday, February 29, 2008.
The winners walked away
paying $19,555,473,900, for 62 MHz of RF-300
spectrums payable
to the U.S. government.
CLICK
FOR MORE ABOUT
RF-300.com
Without Google, the
spectrum auction might not have attracted the
minimum $4.6-Billion bid required to trigger the
openness rules. But as reports come in, the
government was said to be happy with the number
$19.6 billion.
Some
of the airwaves spectrums abandoned by TV stations
as part of the February 2009 switch from analog to
all-digital signals will be part of VoIP network
that will be combined with land-lines to produce a
joint public - commercial network that would give
priority to police and firefighters during
emergencies.
But that piece, called the D
block, received only one bid, for $472 million, far
below the $1.3- billion minimum.
The Los
Angeles Times were the first to report
(April) -- that despite
raising a record $19.6 billion, congress is asking
the FCC, to go back to the drawing board to
determine the best way to create a nationwide
public safety network after no private-sector
partners emerged during the auction, Chairman Kevin
J. Martin
said.
Google Inc. -- was
accused of "gaming" the auction. They said the
Internet search giant bid only to assure that new
provisions would kick in on a large swath of the
spectrum allowing people to use any device or
application -- including ad-supported services
Google wants to offer.
Those lawmakers also
criticized Martin for pushing the open-access
requirements, which they argued lowered the demand
for those airwaves and probably cost the government
billions of dollars. Verizon won the airwaves for
$4.74 billion, while the rest of the auction
produced three times as much per unit of
spectrum.
Google had said that it
was prepared to buy the spectrum, but that its main
priority was to assure the rules kicked in.
Spokesman Adam Kovacevich said the company was
"proud" of its role in helping open part of the
closed wireless world to new devices and
applications.
"This auction generated
not only a record amount for the U.S. Treasury, but
also historic new rights for wireless consumers as
a direct result of Google's bidding," he
said.
Martin defended the
auction against bipartisan criticism, noting that
it raised about $500 million more than the agency's
previous 68 spectrum sales
combined.
"The auction stands as
the most successful FCC auction ever conducted, but
there's still more work that needs to be done," he
said.
The
first 16 FCC Spectrum
Bidding process
held between July 1994 and July 1998, raised a net
of $22.9 billion dollars for the U.S Treasury --
assigning 5,893
licenses
Some
of the licenses are paid for with installment
payments over 10 years. The $22.9 billion figure
includes the sum of these payments. Recently, some
of the bidders in the C-block auction have
defaulted on their payments. The $22.9 billion
figure does not deduct any losses from
defaults.
Lawmakers wanting to fix
the major communications problems that emergency
workers faced during the Sept. 11 terrorist attacks
and Hurricane
Katrina
included: Rep. Joe L.
Barton (R-Texas)
and
Subcommittee Chairman
Rep. Edward J. Markey (D-Mass.). But Martin said
Congress would have to authorize such a
plan.
Rep. Barton said a
public/private partnership was the best option and
could work if the FCC adjusted the rules to
encourage more bidders.
Part
02
/ Friday, February 29, 2008:
Bidding at the end of Round 129
License
|
MHz
|
Aggregate Total PWBs
|
Aggregate Reserve
|
Delta
|
% of Reserve
|
Total Pops
|
Current Cost per MHz-pop
|
A
|
12
|
$3,949,829,000
|
$1,807,380,000
|
$2,142,449,000
|
219%
|
285,245,819
|
$1.15
|
B
|
12
|
$9,136,750,900
|
$1,374,426,000
|
$7,762,324,900
|
665%
|
284,435,538
|
$2.68
|
C
|
22
|
$4,748,319,000
|
$4,637,854,000
|
$110,465,000
|
102%
|
285,620,445
|
$0.76
|
D
|
10
|
$472,042,000
|
$1,330,000,000
|
$(857,958,000)
|
35%
|
285,620,445
|
$0.17
|
E
|
6
|
$1,248,533,000
|
$903,690,000
|
$344,843,000
|
138%
|
285,620,445
|
$0.73
|
Total
|
62 MHz
|
$19,555,473,900
|
$10,053,350,000
|
|
|
|
|
Thursday, February 28, 2008:
Bidding at the end of Round 129
License
|
MHz
|
Aggregate Total PWBs
|
Aggregate Reserve
|
Delta
|
% of Reserve
|
Total Pops
|
Current Cost per MHz-pop
|
A
|
12
|
$3,948,515,000
|
$1,807,380,000
|
$2,141,135,000
|
218%
|
285,245,819
|
$1.15
|
B
|
12
|
$9,134,733,900
|
$1,374,426,000
|
$7,760,307,900
|
665%
|
284,435,538
|
$2.68
|
C
|
22
|
$4,748,319,000
|
$4,637,854,000
|
$110,465,000
|
102%
|
285,620,445
|
$0.76
|
D
|
10
|
$472,042,000
|
$1,330,000,000
|
$(857,958,000)
|
35%
|
285,620,445
|
$0.17
|
E
|
6
|
$1,244,316,000
|
$903,690,000
|
$340,626,000
|
138%
|
285,620,445
|
$0.73
|
Total
|
62
|
$19,547,925,900
|
$10,053,350,000
|
|
|
|
|
Today's net was just over $5M, and again it was
driven by continued activity on big licenses in the
E block. A quick look at the first graph shows the
total value of new bids has remained nearly
constant over the past three days, with only some
very modest declines revealing themselves today.
This is a good indication that the remaining major
bidders have been bidding enough to maintain their
eligibility levels, and that no major bidders have
dropped out lately.
The
Denver-Orlando-Phoenix pattern in the E block was
altered again today: Yesterday, Orlando was
replaced by New Orleans and Las Vegas, and today
Denver was replaced with Minneapolis, a slightly
bigger but less expensive license. Once again,
Phoenix was the third license in the pattern to
receive a bid today. So today's pattern was
Minneapolis-New Orleans/Las Vegas-Phoenix, and of
course all received counterbids. The bidders
involved do not seem tired.
Wednesday, February 27, 2008: Bidding at the
end of Round 123
License
|
MHz
|
Aggregate Total PWBs
|
Aggregate Reserve
|
Delta
|
% of Reserve
|
Total Pops
|
Current Cost per MHz-pop
|
A
|
12
|
$3,947,956,000
|
$1,807,380,000
|
$2,140,576,000
|
218%
|
285,245,819
|
$1.15
|
B
|
12
|
$9,133,641,900
|
$1,374,426,000
|
$7,759,215,900
|
665%
|
284,435,538
|
$2.68
|
C
|
22
|
$4,748,319,000
|
$4,637,854,000
|
$110,465,000
|
102%
|
285,620,445
|
$0.76
|
D
|
10
|
$472,042,000
|
$1,330,000,000
|
$(857,958,000)
|
35%
|
285,620,445
|
$0.17
|
E
|
6
|
$1,240,930,000
|
$903,690,000
|
$337,240,000
|
137%
|
285,620,445
|
$0.72
|
Total
|
62
|
$19,542,888,900
|
$10,053,350,000
|
|
|
|
|
It
was another record low for the auction, as the
total proceeds today were just $5.4M. However, as
predicted yesterday, the general bidding activity
trend reversed itself today, as the number of new
bids either increased or stayed the same in each
round of the day until the last. This can be seen
in today's first graph. Once again the E block was
most active drawing nearly $4M in new bids, due in
part to more bids on several large licenses.
The
Denver-Orlando-Phoenix bidding pattern in the E
block almost repeated itself today for the fifth
consecutive day, the only deviation being that the
Orlando license was replaced by a combination of
New Orleans and Las Vegas. Together these two
licenses are about the same size as Orlando in
terms of pops and bidding units (combined they are
less than 5% smaller), but the total bid price for
both is about a third of Orlando's $30M price tag.
So it seems that the bidding in E has in fact moved
to smaller licenses as predicted yesterday, and we
believe this trend will continue. At six rounds per
day, this means that we could be in for a long haul
to the end.
Tuesday, February 26, 2008: Bidding at the end
of Round 117
License
|
MHz
|
Aggregate Total PWBs
|
Aggregate Reserve
|
Delta
|
% of Reserve
|
Total Pops
|
Current Cost per MHz-pop
|
A
|
12
|
$3,947,354,000
|
$1,807,380,000
|
$2,139,974,000
|
218%
|
285,245,819
|
$1.15
|
B
|
12
|
$9,132,667,900
|
$1,374,426,000
|
$7,758,241,900
|
664%
|
284,435,538
|
$2.68
|
C
|
22
|
$4,748,319,000
|
$4,637,854,000
|
$110,465,000
|
102%
|
285,620,445
|
$0.76
|
D
|
10
|
$472,042,000
|
$1,330,000,000
|
$(857,958,000)
|
35%
|
285,620,445
|
$0.17
|
E
|
6
|
$1,237,089,000
|
$903,690,000
|
$333,399,000
|
137%
|
285,620,445
|
$0.72
|
Total
|
62
|
$19,537,471,900
|
$10,053,350,000
|
|
|
|
|
The
auction netted only $6.2M today, another record low
number, but certainly not the last. Although daily
proceeds continue to decline as shown in the first
graph, all indications are that we are still a few
dozen rounds from the end, as the day saw more than
a few bidding wars continue as well as several new
bids placed on long-idle licenses. The second graph
shows the number of bids placed, and indicates
somewhat of a small resurgence in the A block along
with a very slow decline overall, but it is a
decline that could easily reverse itself or go flat
tomorrow.
For
the fourth day in a row, the bidding pattern on the
E block licenses of Denver, Orlando and Phoenix was
repeated. That is, for the last four consecutive
bidding days a bidder has placed bids in the first,
third, and fifth rounds of the day on the Denver,
Orlando and Phoenix licenses, respectively; and in
the second, fourth and sixth rounds, the incumbent
has placed the appropriate counterbid.
Today,
these six bids caused the aggregate PWB of the E
block to increase by nearly $4M, or 85% of the E
block total and 62% of the entire net proceeds of
the day from all bidding. We have to assume that
one way or another, this money will be coming from
Qualcomm. If this activity suddenly stops, the
auction will be quickly be reduced to another level
by almost an order of magnitude. But we suspect
that rather than stop, this bidding activity may
move around to other licenses once the limits on
Denver, Orlando, and Phoenix are reached.
A
few licenses in the Dakotas are still active in the
A block, and B block activity is spread out with
pockets of activity in Kentucky, Georgia, Michigan,
Virginia, and the Caribbean territories. In
addition to the six big bids discussed above, there
were a several other bids on E block licenses today
that included activity on several licenses in the
southwest desert, such as Tucson, Flagstaff &
Santa Fe. Other than that, the bidding action in E
was generally widespread geographically. In all
three blocks there were several new bids today on
licenses that had laid idle for many rounds, so the
action is continuing to move around.
Apparently
the FCC clearly does not share our desire to speed
this auction along, so we will have another
six-round day tomorrow.
Part
03 / Monday, February
25, 2008: Bidding at the end of Round
111
License
|
MHz
|
Aggregate Total PWBs
|
Aggregate Reserve
|
Delta
|
% of Reserve
|
Total Pops
|
Current Cost per MHz-pop
|
A
|
12
|
$3,946,618,000
|
$1,807,380,000
|
$2,139,238,000
|
218%
|
285,245,819
|
$1.15
|
B
|
12
|
$9,131,734,900
|
$1,374,426,000
|
$7,757,308,900
|
664%
|
284,435,538
|
$2.68
|
C
|
22
|
$4,748,319,000
|
$4,637,854,000
|
$110,465,000
|
102%
|
285,620,445
|
$0.76
|
D
|
10
|
$472,042,000
|
$1,330,000,000
|
$(857,958,000)
|
35%
|
285,620,445
|
$0.17
|
E
|
6
|
$1,232,546,000
|
$903,690,000
|
$328,856,000
|
136%
|
285,620,445
|
$0.72
|
Total
|
62
|
$19,531,259,900
|
$10,053,350,000
|
|
|
|
|
We
are now through 22 days of bidding, and the auction
is extremely slow and showing few signs of stopping
anytime soon. The net proceeds today were only
$6.7M, just over $1M per round, but bidding
activity was nearly constant. The first graph shows
bidding activity, and we have added gray bars
representing the total new bids (i.e., the sum of
all new bids across all blocks) and this did not
continue its downward trend today. Similarly, the
second graph shows only a very slight decline in
the value of bidding activity. The A block is
closest to being finished, having gained only $230K
today, and averaging just three bids per round.
The
E block was responsible for $5M of today's $6.7M
proceeds, partly because the pattern of bids on
Denver, Orlando and Phoenix repeated itself for the
third consecutive day. With each bid, there was a
counterbid, so none of these licenses have changed
hands yet. But since this activity started a few
days ago, the PWB on the Denver license has
increased by $4.4M (or 27%), the Orlando PWB has
increased by $4.2M (or 17%), and the Phoenix PWB
has increased $3.1M (or 17%). This represents a
very significant portion of the recent activity in
the auction, so we will see a sudden drop when one
of these two bidders gives up.
4.
Related Stories
/Interested in further
auction analysis and wireless strategy? Contact us
at auction@wirelessstrategy.com
or 703-506-0041.
Information
is compiled from publicly available data on the FCC
web site. Wireless Strategy, LLC cannot guarantee
the accuracy or completeness of this information
and shall not be held liable for any errors or
omissions. Observations are the opinions of
Wireless Strategy, LLC, and are not based on
confidential or proprietary bidding
information.
All
material copyright © 2007, 2008 Wireless
Strategy, LLC.
5.
NBS100 Review WiFi / NBS100
TeleComunication Study - Regulatory Frequency
Seizure
More
Articles Converging
News 2008 / TeleCom BuyOuts, Spinoffs and Asset
Seizure Boom
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