C Block

Andrew Seybold: The Rush to 4G

Andrew M. Seybold — Tue, 05 Aug 2008 16:42:11 -0400

Over the next year, we will be hearing more about the network operators' move to 4G all over the world. I see the shift to 4G as inevitable, but does it need to happen as soon as LTE, for example, is finalized and the first equipment is built? We are hearing wonderful things about LTE, but the data rates and capacity increases being bandied about are theoretical and based on using 20 MHz of spectrum.

One reason the WiMAX community can claim data speed and capacity gains over today's EV-DO Rev A and UMTS/HSPA is due to the amount of bandwidth it uses. EV-DO Rev A occupies only 1.25 MHz of spectrum per carrier and UMTS/HSPA occupies 5 MHz per carrier. The WiMAX community is basing its claims on bandwidths of 8 MHz or more. If you normalize these three technologies in 10 MHz of spectrum, you find they offer about the same data rates and capacity.

Not many network operators have 20 MHz of contiguous spectrum to use for LTE, but LTE can run in any amount of spectrum from 1.25 MHz up to 20 MHz so it will fit almost anywhere. The caveat is that when LTE is used in less than 20 MHz of spectrum, data speeds and capacity are lower than the published specifications and, in most cases, are about the same as the next revisions of UMTS/HSPA+ and EV-DO Rev B (second release). Thus, I wonder why there is a rush to LTE instead of continuing with the enhancements to HSPA and EV-DO. If you put LTE in the A and B Blocks of the just-auctioned 700-MHZ spectrum, you are using 6 MHz by 6 MHz, which is a long way from 20 MHz of spectrum. When you look at what else can be done with this spectrum, you find that you can deploy four or five carriers of EV-DO or one carrier of UMTS/HSPA or LTE (depending on guard bands).

If you look at the data speeds and capacity of all three of these technologies in 10 MHz of spectrum, you will find that LTE has only a slight advantage (10 percent or less). Verizon, with its C Block holdings of 11 MHz by 11 MHz of spectrum, fairs better with LTE but not as much as is being claimed by LTE promoters. As with any new technology, it will take time to get the bugs out and it will be more expensive to deploy.

A lot of the rush to move to LTE is because of the "threat" of WiMAX and WiMAX proponents' claims about high-data speeds and lots of capacity. We are about to learn the truth about WiMAX as the Sprint portion of the new Clearwire network is turned on and independent tests are conducted. For an idea of what is in store for us, go to the WiMAX Forum website (http://www.wimaxforum.org/technology/) where you can read the following statement: "Mobile network deployments are expected to provide up to 15 Mbps of capacity within a typical cell radius deployment of up to three kilometers." If you compare both of the 3G standards deployed today, you will see that there is virtually no difference in total data capacity available per cell sector or cell site.

Perhaps the commercial wireless community is rushing headlong into 4G when it should be continuing to deploy the next revisions of 3G and watching LTE. But most network infrastructure companies would not be happy with this since many of the revisions for the 3G networks are software upgrades and not nearly as expensive as the upgrade to LTE.

The race is on. NTT DoCoMo has fully committed to being the first LTE network operator and others are raising their hands. But like any new technology, it will take years to fully build out on a nationwide basis. The best we will see over the next three to four years is LTE deployed where there is a high demand for data services, and I don't believe we will see anything like a nationwide network in the United States until 2014 or 2015.

Network operators are trying to attract more customers to their broadband data networks and are still rolling out coverage in some areas. If I were a network operator, I would stay with 3G and implement the new revisions as they become available. I would let LTE technology and pricing mature before I made up my mind to deploy it, especially in less than the 20 MHz of spectrum on which today's specifications, including data speed and capacity, are being calculated.

Don't get me wrong, I believe in LTE and next-generation technology. But I also believe in making money and that the best way for networks to do that is to let demand drive them to LTE, not competition from WiMAX or wanting to be the first kid on the block with LTE.

Andrew Seybold is an authority on technology and trends shaping the world of wireless mobility. A respected analyst, consultant, commentator, author and active participant in industry trade organizations, his views have influenced strategies and shaped initiatives for telecom, mobile computing and wireless industry leaders worldwide. www.andrewseybold.com

Andrew Seybold - A New Wireless Opportunity!

Andrew M. Seybold — Thu, 10 Jul 2008 10:22:28 -0400

Great! Chairman Martin of the FCC has decided to auction more spectrum. It is called AWS III (Advanced Wireless Services) and it is made up of 25 MHz of spectrum from 2155 MHz to 2180 MHz. Spectrum is valuable, so perhaps I should bid on it. What are the rules? Well, according to the Chairman, I will have to build a network that will cover 50 percent of the U.S. population (not geography) within five years and 95 percent of the U.S. population within ten years (the end of the license term). And, by the way, if I am the winning bidder I will have to provide at least 786 Kbps data service to anyone who wants it for free. Of course, I can charge for data speeds higher than that.

Several companies have suggested a variation of this to the FCC. M2Z agrees with free Internet access to 95 percent of the U.S. population but wants the spectrum awarded to it for free, and it would fund the free Internet with advertising revenue, as would several others.

Okay, I am interested in bidding for all 25 MHz of spectrum, which on a nationwide basis has to be worth a lot of money regardless of the restrictions. So I run a few numbers before I bid to make sure I can make some money building out this network. First, what is the spectrum worth? Well, Verizon bought the 700 MHz C block that covers 285,620,445 pops (population), which is about 94 percent of the U.S. population, for just under $5 billion ($4,748,319,000). I know the 700 MHz spectrum is worth more because it covers more area with fewer cell sites, so I could probably win the AWS III spectrum for a nice round $3 billion.

Now, what will it cost me to build out a network and operate it for ten years? The first question is whether the network will be fully mobile (which means cell site hand-offs and a more extensive backend) or only for fixed services. In these competitive times, I had better figure on a fully mobile network to attract more customers, so I need to base the math on a full IP backend with hand-offs between cell sites.

How many cell sites will I need? It has been documented that I could cover 75 percent of the U.S. population on 700 MHz with 22,000 cell sites, and that at 2.5 GHz it would take 65,000 cell sites to cover the same 75 percent of the population. This means I will have to build a network of 80,000 cell sites. Some of these will be large, metro-area cell sites and some will be smaller (and therefore less expensive) cell sites. So I'll figure the network build at $20 billion for sites. Then I have to build the backend and provide backhaul to each site, which will have to be fiber or microwave because of the amount of bandwidth at each site. So the entire network and construction will cost me about $25 billion. Since I paid $3 billion for the license, my total capital expenditure for the network will be about $28 billion.

Perhaps I can fund this capital expenditure, but I also need to consider the ongoing or operating expenses for the network. Again using averages, I would guess site rental would come in at $800 per site, $500 per month for the backhaul and another $100 per month for maintenance. Doing the math, this means just the cell sites and backhaul will cost $114 million a month or a total of $1.37 billion a year. I haven't yet added in other items such as insurance, electricity at each site, technical and administrative staff, marketing and device purchases, but let's see what we have so far.

At the bottom of my spreadsheet, my total costs at the end of ten years to build and operate this network come to $43 billion (give or take a few billion). To keep the math easy, let's say the network will be available to 290 million people, but only toward the end of the license period. Until then, I will be offering services to a much smaller number of people--in year five, for example, I would have a potential of reaching 150 million (roughly 50 percent of the U.S. population). Most of those 150 million potential customers will already have a choice for fixed services of DSL, cable, perhaps fiber and even WiMAX on a 2.5 GHZ network. For mobility services, they would probably have a choice of three or four 3G wide-area networks and, perhaps, WiMAX. Of course, WiFi hotspots are another option.

I wonder how many of these potential customers would leave their existing network provider for free 786-Kbps service when most of them are getting 3 Mbps and higher services for less than $40 per month? If they elect to join my network for free, would they stop paying for the other service? How much advertising would I have to sell to make a profit? How would I attract (or sell up) services at higher speeds competing with three, five or even seven other providers? What would be better about my network? Would I have more device choices? Would I be able to offer a service that one no else could offer? In rural areas, would the advertising revenue even cover the monthly cost of operating my system?

Why would I pay $43 billion for the privilege of giving away 786-Kbps wireless services? For the privilege of competing with existing wired and wireless providers already engaged in a price war? In five years, 786 Kbps will feel like today's dial-up speeds. You know what? I think I will pass and not bid on this chunk of spectrum this time around. I will wait until the "lucky" bidder files for bankruptcy and pick up the spectrum and the network for pennies on the dollar. Perhaps then I will be able to make money either by operating the network or selling off pieces of it.

Verizon Wireless: 'Course will abide by the rules

Fri, 09 May 2008 06:59:55 -0400

After Google filed a petition with the FCC to insist that the regulator put in place stricter terms for Verizon Wireless' C Block 700 MHz spectrum, which requires open access for devices and applications, Verizon Wireless claimed the petition had "no legal basis." The carrier plans to file its own petition with the FCC soon, but noted that "it's really no surprise that despite not winning spectrum, [Google] continue[s] to try to change the rules and further their own business interests through the regulatory process." The carrier said it knew the rules before it took part in the auction and "of course" they will abide by them, but if it doesn't the carrier points out that "Google or anybody else..." can use "legitimate and expedited ways to address that."

For more on Verizon's response:
- read this article from Verizon's policy blog

SPOTLIGHT: Google calls out Verizon Wireless' "open" plans

Tue, 06 May 2008 06:59:52 -0400

TODAY'S SPOTLIGHT... Google calls out Verizon Wireless' "open" plans
Google is petitioning the FCC to obtain a guarantee from Verizon Wireless promising the operator will honor its commitment to open access. A Google filing Friday raises concerns that Verizon isn't fully dedicated to the open-access restrictions instituted by the FCC over the nationwide C block of 700 MHz spectrum the federal agency auctioned in March--the provisions mandate the C block winner (i.e., Verizon Wireless) allow consumers carte blanche authority over the devices and applications that run on the spectrum, and it seems Google fears Verizon won't uphold its end of the bargain. Read Jason Ankeny's column on Google's open access petition in FierceDeveloper.

AT&T cutbacks lead to mobility gains

Mon, 21 Apr 2008 06:59:58 -0400

The layoffs that AT&T announced last week, which look to put 1.5 percent of its employees out of work, will be recouped over the course of the year by hiring employees for its mobility division, the carrier said. Most of the expected 4,600 cuts will come from the company's landline division. Since the cuts will mostly be from the management level and the new employees on the mobility side of things won't be from the management level, analysts expect cost savings from the layoffs to approach half a billion dollars.

AT&T also announced today that it had completed the acquisition of a regional wireless service provider Edge Wireless, which served subscribers in Oregon, northern California, Idaho and Wyoming. The FCC just announced its approval for the acquisition. The newly acquired Edge subscribers now have access to AT&T's full portfolio of services. Edge and AT&T have long had a roaming agreement.

For more on AT&T's recent news:
- read this AT&T cutbacks article from the WSJ (sub. req.)
- check out this AT&T completes Edge acquisition article

AT&T to layoff 1.5 percent of employees

Fri, 18 Apr 2008 06:59:57 -0400

AT&T, feeling the pinch of a shrinking landlines business even as it suffers growing pains in its wireless and TV units, is laying off some 5,000 workers as it reconfigures its workforce. The 1.5 percent trimming will cost it $374 million in first quarter pretax charges.

The company said its overall numbers of employees won't actually change. "This is part of our ongoing evaluations to streamline the business," said spokesman Walt Sharp. "It's about having the right people in the right job."

- Click here to go to our dedicated AT&T page. More news and company profile. -

Most of the job cuts are at the managerial level. AT&T had a workforce of 309,000 at the end of last year. When it announced the acquisition of BellSouth in 2006, it projected 10,000 job cuts over the next three years. Instead, it's grown some 7,000 as its wireless and TV divisions expanded.

"We're always hiring for the growth areas," Sharp said, noting that the company was seeking talents in areas such as wireless and U-Verse, its Internet TV service. "We're shifting headcount to areas where the customers are."

For more:
- read the CNNMoney AT&T lays off 1.5 percent article

Related articles:
AT&T sees trouble refilling outsourced jobs AT&T jobs report
Is AT&T bitter about the C block AT&T auction report

Is AT&T bitter about the C Block?

Wed, 16 Apr 2008 06:59:59 -0400

- Click here for our full coverage of the 700 MHz Wireless Auction -

Is AT&T bitter about the C Block?

Sound bites and dollar signs: That's what keeps our legislative branch humming along. Yesterday, the House of Representatives subcommittee on telecommunications hosted FCC chairman Kevin Martin to discuss the results of the 700 MHz spectrum auction. Three Republican representatives grilled Martin over whether Google "gamed" the system by lobbying to get the open access provisions on the C Block and then not bidding to win.

"Google was successful in gaming the system," Rep. Fred Upton (R-MI) said. The open access provisions were simply a "social engineering" experiment by the FCC that prevented the C-Block from raising billions of dollars more, Upton continued.

Google, of course, did bid on the C Block. The company bid just as it promised it would: until the provisionally winning bid on the C Block had reached its reserve price: $4.6 billion. By meeting that reserve price, Google triggered the open access provisions the company so desired. The FCC, not Google, decided on the reserve price and if it proved (in hindsight) to be too low, then the FCC is at fault for short changing Congress of the extra billions--not Google. Verizon Wireless ultimately bid to win the C Block for $4.7 billion.

Rep. Cliff Stearns (R-FL) and Rep. John Shimkus (R-IL) both followed Upton's lead. Shimkus asked Martin whether Google had "duped" the FCC by bidding in order to trigger the open access rules. Martin assured them that the agency was not duped and that the rules were not put into place to keep any company from bidding.

FCC commissioner Jonathan Adelstein noted that Google did precisely what it had promised to do: Bid enough to trigger the open access provisions. "They put over $4.6 billion of their capital at risk," Adelstein noted.

The 700 MHz auction brought in more than $19 billion, far more than the most optimistic projections of $15 billion in winning bids. The final $19 billion figure is not even counting the D Block, which did not garner enough to meet its reserve price.

So who would have swooped in and driven up the price of the C Block had it been provision-free? Most analysts figured AT&T would compete with Verizon Wireless and Google for the C Block, but the carrier acquired some spectrum from Aloha and bid on other blocks instead. So is AT&T upset about the results?

It may be worth noting that all three of the Republican representatives that grilled Martin yesterday entered office about 14 years ago. The company whose political action committee contributed most to each of their campaigns during the past 14 years? That's right: AT&T. -Brian

Leap: VZW, AT&T maybe shouldn't bid on D Block

Tue, 15 Apr 2008 06:59:56 -0400

Leap Wireless' SVP and general counsel Robert Irving testified today before the House Subcommittee on Telecommunications and the Internet about Leap's take on the outcome of the 700 MHz auction.

"We have been concerned in recent years with the ever-increasing consolidation of spectrum assets and market share into the hands of the nation's largest wireless carriers, and the consequences that this portends for Leap and other small and mid-sized carriers," Irving said, according to his prepared remarks.

Irving outlined a few lessons learned from the 700 MHz auction:

One disturbing trend in wireless: Two of the largest carriers increased their vast spectrum holdings thanks to the auction. Verizon Wireless and AT&T contributed $16.3 billion of the total $19.6 billion raised during the auction.
Meanwhile, Leap and Alltel won no licenses, while MetroPCS won one license.
The auction provided limited bidding opportunities for small and mid-sized carriers and little headway was made in bringing new entrants into the industry.
The creation of large geographic areas in the C Block made it difficult for smaller and mid-sized carriers to compete.
The complex public/private partnership framework for the D Block, especially the extremely stringent geographic build out requirements, made the spectrum slice highly unattractive.
The FCC should examine whether breaking the D Block into smaller segments makes better sense and whether AT&T or Verizon Wireless should be allowed to bid on it given the large swaths of 700 MHz spectrum those carriers already have.

For more on Irving's remarks:
- take a look at the entire testimony

Operator community butts heads with Google again

Mon, 14 Apr 2008 06:59:59 -0400

Operator community butts heads with Google again

The operator community once again finds itself butting heads with the likes of Google as CTIA has now weighed in on the fight over unlicensed white-space spectrum--that spectrum that sits between airwaves currently licensed to TV broadcasters. CTIA wants the spectrum licensed. Google and others want it unlicensed. (And of course the National Association of Broadcasters wants nothing in that spectrum because of interference concerns.)

Since the closing of the 700 MHz auction, after which Google revealed it never really intended to become an operator but only drive the price up to kick in open-access requirements, Google has stepped up its efforts to open up the white-space spectrum on an unlicensed basis. In a recent filing with the FCC, the search giant said opening up the spectrum on an unlicensed basis would "enable much-needed competition to the incumbent broadband service providers."

CTIA joins Sprint Nextel and T-Mobile against the notion that the spectrum should be unlicensed. The two operators made a filing with the FCC in January urging the commission to open up the spectrum on a licensed basis, saying white spaces could be used for much-needed backhaul services.

For sure, unlicensed white-space spectrum represents a threat to those operators that spent billions at the 700 MHz auction and will spend billions more to deploy their licensed broadband networks.

For Google, white-space spectrum may be the best chance the search giant has to fully realize its dream of an open access circumstance that will enable it to transfer its dominance in online advertising into the wireless broadband world. While the FCC mandated open access for the 700 MHz C block, Google only got part of what it wanted. The FCC stopped short of requiring wholesale access, which would push the whole notion of open access in the first place through competition.

Google had big hopes in 2005 and 2006 that muni-WiFi was going to be the wireless broadband opportunity it was looking for. Pundits had speculated that Google was poised to blanket the U.S. with free WiFi in order to become one of the globe's largest Internet providers and one of the powerful ad sellers. That strategy didn't pan out as the muni-WiFi market hit a shakeout.

Fortunately for Google, the FCC has publicly favored the idea of unlicensed white-space spectrum. It appears the issue comes down to whether the devices will interfere with TV signals. The commission has been testing prototypes from Motorola, Philips, Google and Microsoft.

Of course, now there are some powerful lobbying forces at work against that plan, the broadcast and mobile-phone industries. But we also know how much a thorn Google can be.

The fight could get down-right dirty. -Lynnette

700 MHz winners reveal plans, no big surprises yet

Fri, 04 Apr 2008 07:59:58 -0400

Now that the FCC anti-collusion restrictions have been lifted, some 700 MHz spectrum winners are champing at the bit to talk about their plans and tout their newly achieved spectral positions. So far there have been few surprises. Ã‚Â

Verizon Wireless executives this morning assured investors their $9.36 billion investment in 700 MHz spectrum will provide a long-term foundation for Verizon's business. (The carrierÃ‚Â spent about half of that figure on C Block licenses and the other half on an additional 102 licenses across the country.)Ã‚Â Verizon WirelessÃ‚Â said that this year it will be conducting field trials of LTE. In 2009 it will select vendors, conduct some advanced device trials with a deployment planned for the second half of that year. By 2010 the operator plans to launch commercially and have rapid acceleration of its footprint.

Meanwhile AT&T, which spent $6.6 billion in the 700 MHz auction for B-block licenses, will also deploy LTE. The new B-block spectrum will be combined with AT&T's spectrum it acquired from Aloha Partners last year. Kris Rinne, senior vice president, architecture and planning at AT&T told the audience at Wednesday's FierceMarkets Path to 4G conference that the company will likely deploy LTE in the 2010 time frame. Ã‚Â

Meanwhile Qualcomm, which spent a total of $558.1 million on E- andÃ‚Â B-block licenses, said that it will use its licenses to enhance its MediaFLO broadcast TV service.

For more, see these releases:
- Verizon
- AT&T
- Qualcomm

CORRECTION: Verizon Wireless did not spend $9.36 billion on the C Block licenses--the figure was the amount the carrier paid for all the 700 MHz it acquires: the majority of the C Block as well as 102 additional licenses.

Google admits it never intended to win spectrum

Fri, 04 Apr 2008 07:59:57 -0400

Now that the 700 MHz auction winners are revealing their plans for the spectrum, Google is admitting it bid in the auction but never really intended to win the spectrum.

Instead, in a corporate blog, Google lawyers say that Google's game plan was to make sure that bidding on the C block reached the $4.6 billion reserve price that would trigger the important open access conditions. "We were also prepared to gain the nationwide C block licenses at a price somewhat higher than the reserve price; in fact, for many days during the early course of the auction, we were the high bidder. But it was clear, then and now, that Verizon Wireless ultimately was motivated to bid higher (and had far more financial incentive to gain the licenses)."

For more, see this article from TheStreet.com.

Related stories:
Is 'open network' just marketing hype? Editorial
Verizon, AT&T big winners in 700 MHz auction Article
FierceWireless' special coverage of the 700 MHz auction Coverage

What does public safety do now?

Mon, 24 Mar 2008 07:59:59 -0400

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What does public safety do now?

The 700 MHz auction ended last week, with Verizon and AT&T emerging as the big winners and public safety emerging as the big loser. The D Block, which was designed to offer a public/private partnership that would serve both consumers and public safety, giving them priority access during emergencies, failed to meet its $1.3-billion reserve price. Subsequently, the FCC de-linked the D Block from the rest of the auction and has plans to make the spectrum available before the DTV transition in February of next year.

The question is, will the FCC try this public/private partnership once again? If it does, it needs to make the terms more attractive for an entity willing to bid on the spectrum. A $1.3-billion reserve price is quite a risk for any company embarking on this unproven strategy. Clearly, investors see it as a risky proposition. Frontline had planned on building this nationwide, high-speed wireless network for public safety officials, but even with the backing of L. John Doerr of Kleiner Perkins Caulfield & Byers, as well as other supporters, the company raised enough for the $128 million down payment, but not enough for the $1.3 billion reserve price on the spectrum. Subsequently, Frontline closed its doors before the auction began.

If the FCC changes its terms and creates almost a spectrum give-away to the entity willing to build this public/private network, you can bet we'll see protests and legal maneuverings from the winners who bid billions to secure their spectrum. Meanwhile, public safety once again languishes, with no solution in sight to the interoperability problem that has been plaguing that industry for years. -Lynnette

Auction Results: Verizon Wireless wins the C-Block, AT&T and Echostar take smaller slices

Brian Dolan — Thu, 20 Mar 2008 16:08:56 -0400

As predicted, Verizon Wireless was the big winner for the 700 MHz auction after winning the UpperÃ‚Â C Block of spectrum, which is laden with open access provisions. Google did not win any licenses. Satellite television company EchoStar subsidiary FrontierÃ‚Â won a significant amount of licenses in the E Block--enough to give the company a nationwide footprint. Verizon Wireless not only won the coveted C Block, but also most of the A Block and 77 licenses in the B Block, which contained the smallest licenses in the auction. For its part, AT&T managed to scoop up 227 of the smaller slices of spectrum.

Verizon Wireless ended up winning seven of the eleven pieces of the C Block, butÃ‚Â the other fourÃ‚Â regional slices of the spectrum in that block went to other bidders. Triad 700 won the Alaska and Puerto Rico/U.S. Virgin Islands regional C Block slices for $1.78 million and $3.12 million, respectively. Small Ventures USA won a piece of the C Block that covers a part of the Gulf of Mexico for $1.05 million. Club 42 CM Limited won the C Block slice that covers Guam, Northern Mariana Islands and America Samoa with a $550,000 bid.

As part of the announcement, the FCC de-linked the D Block, which failed to meet its $1.3 billion reserve price, from the other four blocks. The D Block had special provisions for a public-private network that would benefit public safety workers. While the FCC plans to make the spectrum available before the DTV transition in February of next year, it said it has no immediate plans to re-auction the spectrumÃ‚Â in Auction 76, which was the original contingent plan.

For the entire list of winning bids and bidders:
- check out this document from the FCC (.pdf)

700 MHz spectrum auction: That's a wrap!

Brian Dolan — Wed, 19 Mar 2008 09:56:50 -0400

After 261 rounds of bidding and more than $19.59 billion in provisionally winning bids, the 700 MHz auction (officially Auction 73) is over. Four out of the five spectrum blocks achieved their reserve prices, which enabled the auction to more than double expected revenues: the congressional estimate for the auction was $10.2 billion. During the past 15 years the FCC has conducted 68 spectrum auctions, which collectively generated $19.1 billion. Not only did the 700 MHz auction raise more money than any FCC spectrum auction before it, the latest auction managed to raise more than every other auction combined. The proceeds from the auction will be transferred to the U.S. Treasury by the end of June, and, according to the FCC, the money raised will support public safety and the digital television transition.

The four spectrum blocks that met their reserve prices were the Upper C Block, the A Block, B Block and the E Block. The winning bids for theÃ‚Â C Block were on the 12Ã‚Â regional licenses that make it up rather than the nationwide package. TheÃ‚Â 12 bids total $4.75 billion,Ã‚Â more than the C Block's reserve of $4.6 billion. Provisionally winning bids on the A, B, and E Blocks were $3.96 billion, $9.14 billion and $1.27 billion, respectively. Those three blocks collectively more than doubled their reserve price of $8.72 billion.

The D Block, of course, languished during the 700 MHz spectrum auction, with only one bid during the first round. Because the bid was well under the block's $1.3 billion reserve price. In a statement yesterday, FCC Chairman Kevin Martin said that "the FCC is now evaluating its options for this spectrum" and that "the Commission remains committed to ensuring that we work to solve public safety's interoperability challenges." No word yet on whether the FCC will start Auction 76, the Plan B auction which was to take place after Auction 73 in the case that a spectrum block failed to meet its reserve price. The FCC will have to decide which rules if any it would remove from the D Block and/or what it's new reserve price should be.

The FCC will announce the winning bidders in the coming weeks.

Defining success for the 700 MHz auction

Wed, 19 Mar 2008 07:59:59 -0400

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Defining success for the 700 MHz auction

After 54 days and 261 rounds of bidding the usual pomp and circumstance that surrounds spectrum auctions understandably dies down, but now that the bidding is over in the 700 MHz auction the industry will once again turn its attention to what could be a watershed moment for the wireless industry.

Could be, but, probably won't be. Analysts seemed to have reached a consensus that either Verizon Wireless or AT&T has won the coveted C Block of spectrum, which is laden with open access provisions that Google lobbied the FCC to implement. Bloggers on-site at the Verizon Wireless Open Development Conference today claim that the carriers' onstage presenters hinted that it had won the C Block through well-timed smirks and subtle chit-chat. The speculation, of course, is more fodder for the rumor mill, but the time for speculation is almost over. The FCC is expected to announce the winners of the auction within the next couple weeks.

The FCC, the incumbent carriers and Congress will certainly see the 700 MHz auction as a smashing success for all parties. The FCC managed to raise more money than expected--doubling reserve prices in some cases--even though it implemented special rules on some of the spectrum blocks. The incumbent carriers are largely rumored and favored to have won the critical spectrum blocks. Congress, of course, is happy that the FCC raised close to $20 billion to fill its coffers.

But if the 700 MHz auction did not attract a new entrant--like a Google--was it really a success? Perhaps even more concerning, the FCC's auction failed to raise the $1.3 billion reserve price for the D Block of spectrum, which was set aside for a public-private network that would solve public safety interoperability problems nationwide.

Twice the money but two key goals may not have been accomplished. So will the 700 MHz auction be remembered as a smashing success or an epic failure? Chances are: a little from column A and a little from column B. What do you think? -Brian

700 MHz auction: That's a wrap!

Wed, 19 Mar 2008 07:59:58 -0400

The four spectrum blocks that met their reserve prices were the Upper C Block, the A Block, B Block and the E Block. The winning bids for the C Block were on the 12 regional licenses that make it up rather than the nationwide package. The 12 bids total $4.75 billion, more than the C Block's reserve of $4.6 billion. Provisionally winning bids on the A, B, and E Blocks were $3.96 billion, $9.14 billion and $1.27 billion, respectively. Those three blocks collectively more than doubled their reserve price of $8.72 billion.

The FCC will announce the winning bidders in the coming weeks. -Brian

700 MHz spectrum auction: Bids still trickling in

Wed, 12 Mar 2008 07:59:55 -0400

The wireless industry is impatiently waiting for the 700 MHz spectrum auction to wrap up as the bidding surpassed the 200th round yesterday. Earlier this morning in the 207th round of bidding, five bids were cast by the still anonymous bidders and each averaged about $16,000. Considering the auction has raised nearly $19.6 billion since it opened on January 24, the most recent rounds have been considerably insignificant. The auction should end any day now.

For more on the 700 MHz spectrum auction:
- check out our full coverage here

FCC seeks input on "open access" enforcement

Mon, 10 Mar 2008 07:59:56 -0400

FCC Chairman Kevin Martin asked attendees at the Legal Futures Conference, an event held at Stanford University and co-sponsored by Google, for advice on how to enforce the open access provision on the C Block in the ongoing 700 MHz auction.

Martin described the enforcement issues as "something the commission is grappling with." Martin also noted that Google has yet to address the enforcement issue: "They haven't given us insight into it, but that doesn't mean I don't think they will."

For more on Martin's speech:
- read this MarketWatch article

700 MHz Auction limps along

Tue, 19 Feb 2008 06:59:55 -0500

After 83 rounds, the 700 MHz auction is limping along with a just a handful of small bid increases on minor pieces of spectrum. The last few rounds have seen increases of $3 million to $5 million in new bids or about 0.03 percent change in the total amount raised by the FCC.

It appears the C-Block portion is over as the bidding has stopped at $4.7 billion. The D Block, the spectrum reserved for a private/public partnership for public safety, doesn't have any qualified bids. So far, the auction has a total of $19.5 billion in bids.

Now everyone is sitting on the edge of their seats wondering who walked away with most of the C Block spectrum. And the FCC is wondering what went wrong in the D-Block auction.

For more about the auction:
- read this article from TelecomWeb
- check out our 700 MHz coverage

Related articles:
C Block meets its reserve, open access sticks Report
New rule should end auction soon Report

Verizon sells $4B in bonds

Fri, 08 Feb 2008 06:59:58 -0500

Yesterday Verizon offered $4 billion in bonds. The company offered the bonds in three separate tranches: $750 million for five years, $1.5 billion for 10 years and $1.75 billion for 30 years. The dollar amount is conspicuously close to the current provisionally winning bid for the C Block of spectrum in the 700 MHz auction. The current pricetag is just more than $4.74 billion.

A report from BusinessWeek also noted that Verizon Wireless paid one lobbyist firmÃ‚Â $320,000 in 2007 to lobby the federal government on wireless airwaves use, employment issues and Net Neutrality.

For more on Verizon's bond issues:
- read this blog post from Across the Curve
- also read the lobbying report from BusinessWeek

CORRECTION: The original headline of this article incorrectly stated that Verizon Wireless offered the bonds instead of its parent company Verizon.