Comments on: Spectrum Prices Down?

By: Sunil

Sunil — Sun, 06 Aug 2006 12:08:30 +0000

Yes, the spectrum is funky. 1.7 uplink and 2.1 downlink. If you look at the "850" band, the uplink and downlink are closer together. It's the nature of the traditional FDD approach. However, if they were to do TDD, then 2.1 makes sense for Europe for roaming.

The spectrum for the most part is the government clearing their own usage. If you take a look at the incumbents, they're US agencies. Like in any auction, spectrum used right away does not equate to using it the next 6 months or a year, I agree.

The 2.5 GHz stuff is awaiting technological selection and development - TDD iPWireless or WiMAX. That is the question! I think the real interesting development is how heavy will the cable cos and satellite guys go in. If you look at the companies who threw down the highest up front payment, it's cable cos and satellite guys. IF they have national ambitions, they'd go for the block of national licenses.

By: Jesse Kopelman

Jesse Kopelman — Fri, 04 Aug 2006 20:46:31 +0000

Sunil, this spectrum is not that funky. It has good alignment with Europe’s 3G spectrum, at least on the 2.1 GHz side. Anyway, as Cingular proved by forcing GSM vendors to support 850 MHz (Ericsson, told us at AT&T Wireless that they had no plans to ever support this profile), if you start ordering base-stations by the thousands the vendors will support whatever frequency profile you want. The bigger issue with this spectrum is that it is not clear. Just like with PCS back in 1996/7 it will take a few years to get the incumbants relocated. Given that Cingular and Verizon (the traditional auction pigs) are sitting on piles of unused spectrum in most markets people are thinking there may not be that much demand for spectrum that isn’t useable right away. Then again, people have been wrong before. All it takes is a little speculation from guys like Super Mario and Salmasi to drive prices through the roof. Meanwhile, what about all that MMDS and WCS spectrum that has sat unused for 10 years? Are the owners finally going to deploy or will they manage to weasel out yet again while at the same time acquiring even more spectrum they have no intention of using at the AWS auction?

By: Sunil

Sunil — Thu, 03 Aug 2006 21:22:23 +0000

It's a funky spectrum - 1/7/2.1 GHz and not really ideal in how we think today's cellular system works today. That's why the major carriers are not all in. That's a factor in why Alltel has not participated. If you look at some of the bigger players, they need this to expand (T-Mobile, MetroPCS, Leap/Cricket). The cable guys must have an interesting plan because it isn't easy build a network from scratch.

Sprint is a 5% ownership partner in the Spectrum Co LLC I think.

You forgot Cellco Partnership d/b/a Verizon Wireless - $383.3M

By: DG Lewis

DG Lewis — Thu, 03 Aug 2006 19:07:42 +0000

The Clearwire entity that acquires spectrum is called Fixed Wireless Holdings, LLC. (The FRN is 0010490498, if you’re really into that kind of thing.) Fixed Wireless Holdings didn’t file to take part in Auction 66, and to the best of my knowledge, none of the companies in which Craig McCaw has a “disclosable interest” put in any upfront money to participate.

By: Katie Fehrenbacher

Katie Fehrenbacher — Thu, 03 Aug 2006 17:40:58 +0000

Jacomo, thanks for the add. I also posted about the upfront money last weekend, in the post Wireless Spectrum Bidders Put Down Billions, but meant that the UBS report is looking at a lower per POP than some had expected. – KF

By: Jacomo

Jacomo — Thu, 03 Aug 2006 17:18:57 +0000

Clarification on my earlier post: Bidder $$$ are Upfront Payments. Cingular: $500Million SpectrumCo LLC: $637 Million T-Mobile: $583 million Wireless DBS: $972 Million MetroPCS AWS, LLC: $200 Million

By: Jacomo

Jacomo — Thu, 03 Aug 2006 17:14:26 +0000

May want to check out what is really happening in this Auction: Some Major-National Bidders in our Listed BEA (Source FCC)

Cingular SpectrumCoLLC T-Mobile Wireless DBS $500 Mil $637 Mil $583 Mil $972 Million

Note: SpectrumCo LLC are: Time Warner/Cox and Sprint/Nextel. Wireless DBS boys are EchoStar/DirecTV & some Cable players. Cannot find Clearwire in here-anyone know their bid name??

By: Seamus McCauley

Seamus McCauley — Thu, 03 Aug 2006 16:04:37 +0000

But as economist Tim Harford (http://www.timharford.com) has shown at various times (notably in his book The Undercover Economist, I think – someone’s borrowed my copy), the price governments have been able to command for spectrum licenses have tended to be a function of how well they design the auctions more than the supply and demand for the spectrum. So that the one Paul Klemperer designed for the UK’s sale of 3G licenses raised $34 billion not because of any special scarcity of 3G spectrum in the UK but because the auction was especially well designed, and the next one in the Netherlands raised just $2 billion in almost identical circumstances due to the auction having been mis-designed. See amongst other things http://qurl.com/11vhs by Ken Binmore and Klemperer himself, and The Undercover Economist at Amazon http://qurl.com/7z21j