The Fun is Starting as the 700 MHz Auction Approaches

Carl Weinschenk

There is a fun time before the beginning of a baseball, football or basketball season when the pundits and fans make predictions about what will happen based on the rosters of the teams and their preparation for the upcoming campaign. It's fun because it doesn't matter, ultimately, whether the predictions are on target or off by a mile.


We've reached that point in the 700 MHz auctions, which will get under way Jan. 24. This week, the Federal Communications Commission released the list of companies that will participate in the bake-off. The FCC accepted 96 auction applications; another 170 will be accepted if changes are made and deposits paid during the first week of January.


This auction is generating tremendous interest because the spectrum is prime and we are at a singular moment in telecommunications history characterized by tremendous demand and tremendous innovation. The release of the list led to an outbreak of sports-like punditry by insiders.


Of course, many of the names are not surprising. This CNET post mentions some of the more interesting names. One, Vulcan Spectrum, is led by Paul Allen, who will forever be known as "the other founder of Microsoft." His participation isn't really surprising, however, since he is very active in telecommunications and technology (as well as collecting Jimi Hendrix and other rock 'n' roll memorabilia). The CNET writer, Marguerite Reardon, points to Qualcomm as an intriguing entry. The company already controls spectrum, which it uses with its MediaFlo technology to support its own video broadcast network. Adding spectrum from this auction, she points out, could make it a much bigger telecom player.


Some of the names on the list can be confusing. For instance, direct broadcast satellite (DBS) provider EchoStar registered through a company called Frontier Wireless, according to this mocoNews piece. Some big entities join auctions under different names to keep a low profile and to gain some advantages offered to smaller entities. Other interesting names among the participants, the story says, are Mexican telecom billionaire Carlos Slim Helu and Mario Gabelli, a money manager who was accused of some monkey business during a spectrum auction in the 1990s.


Analyst Jack Gold points out that that many of the 266 companies are likely to pull out, either by not finishing their applications or not submitting their initial deposits. The InfoWorld piece carrying Gold's views provides a concise overview of how the FCC structured the auction. Though big names and massive amounts of money have characterized coverage of the auction, the story says that it also was designed to enfranchise small entities. The piece ends with a list of some of the unfamiliar names, which include companies such as Dragon Arch, FaithFone Wireless, Grain Spectrum, GreenFly and something called the Office of Spectral Ecology.


This TechDirt blogger lists the usual suspects, notes that the cable industry is represented through Cox and Cablevision and agrees that the presence of Allen and Qualcomm may be significant. His favorite unexpected bidder is Chevron. He doesn't elaborate, but does say that it is unclear what the company would do with the spectrum -- but that it certainly has the money to win. The writer subscribes to the theory that Google's goal was to get the FCC to agree to open access rules, not to actually win spectrum.


The bottom line is that this is a wide open race, and it should be fun. To the extent that the FCC rules allow folks to follow what is going on, it will be interesting to track which companies are serious about bidding and who wins.

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