@ Convergence 2.0: The 700 Mhz Auction: “The Last Big Event”

“The last big event” is how former FCC official and current Stiefel Nicolaus analyst Blair Levin characterized the upcoming 700 mhz wireless auction, as it represents the last significant chance for a company to enter the wireless space on a major scale. But, will a new entrant make a splash? Levin doesn’t think it’s going to happen and that the market status quo will persist following the auction. Ultimately, for all of the talk about folks like Apple (NSDQ: AAPL) and Google (NSDQ: GOOG) making a buy, the odds are still stacked heavily in favor of the incumbent wireless firms.

For those hoping that the auction significantly changes the game, the next best outcome may be for the FCC to impose open access requirements that actually have some teeth. That, too, appears unlikely. Art Brodsky of Public Knowledge argued that FCC Chairman Kevin Martin basically co-opted the term “open access,” as he didn’t buy into the idea of open wholesaling of spectrum. On the other side of the spectrum (no pun intended), Adam Thierer of the Progress and Freedom Foundation warned that these regulations would commoditize and devalue wireless networks, while opening them up to unnecessary (as he sees it) net neutrality regulations.

On said net neutrality regulations, everyone agrees that the debate isn’t going away, but from the sound of this discussion, it doesn’t seem like the debate will evolve. Little new ground covered here.

XM (NSDQ: XMSR)/Sirius (NSDQ: SIRI): Looking more and more likely, says Levin. as evidenced by stock spreads. Key is in the definition of the market. Decision likely at the end of October/early November. Key to making the deal likely is Karmazin’s receptiveness to a la carte programming, notes Thierer. Meanwhile, broadcasters’ opposition to the deal is a mistake, since it limits them when they want more liberalization of their own industry.

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