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Summary:

Not to be outdone by the U.S. government estimates that spectrum currently set aside for digital TV transmission is worth $27.8 billion, CTIA and the Consumer Electronic Association said those airwaves were worth $33 billion. But these estimates make several assumptions.

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Not to be outdone by the U.S. government estimates that spectrum currently set aside for digital TV transmission is worth $27.8 billion, CTIA and the Consumer Electronic Association said those airwaves were worth $33 billion. The inflated valuation estimates, like the inflated fears of a spectrum shortage, are all aiming to get more airwaves in the hands of those who would use them to deploy mobile broadband. Under a plan proposed last week by President Obama, broadcasters could give up their used airwaves in their markets and in turn receive a cut of whatever the government nets for that spectrum at auction.

The plan details — and the estimates of the spectrum’s worth– are by no means certain. Determining valuation will require an actual auction and rules around the spectrum that will either enhance or diminish its value, as well as for Congress to pass a law allowing the government to split the proceeds. At this point, analysts and sources inside the FCC put that chance at about 50-50. So, while CTIA’s estimates of scoring $0.978 for every megahertz covering a single member of the population sound lovely, they’re still pie in the sky until we get a law enabling an incentive auction to proceed and rules that will determine how a winner can use the spectrum it buys. However, given that the 700Mhz auction netted the feds 1.03 for MHz/POP from Verizon and more on a MHz/POP basis from AT&T, CTIA and CES may not be out of the ballpark on their estimates, as long as the auctions take place.

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  1. We need to consider the value of the lower MHz spectrum being described in this article. If we are talking about the under 700MHz channels, which are actively being called the White Space spectrum , the value of thse services is overstated at best.
    1. The FCC has severely limit the broadcast power on the White Space spectrum limiting its bandwidth carrying capabilities and thus its value as a WAN solution.
    2. If I recall the FCC has also said this spectrum is to be a free and opens (unlicensed) standard like WiFi which means there is nor value from an auction.
    Now, the real value is in the D Block(10Mhz)of 700Mhz spectrum the FCC wants to auction and provide to the private sector. The only issue here is the Public Safety groups want it free and have the public pay for it. WHile the FCC would prefer the Private sectors bids on it, wins and builds out the network and makes it available to the PS groups in any give emergency for thei use.
    What can go wrong: AT&T and Verizon Wireless already own sufficient 700MH for their planned LTE network , having spent billions in the last auction. They may find that having to deal with the Public Safety groups (free of charge)may be too honorus for them.

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  2. [...] products, new sites and new services. However, amid this collegial gathering of industry folks a $33 billion fight is brewing — or maybe it’s only a $27.8 billion fight, depending on whose numbers we [...]

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