Lessons From The 700 MHz Auction? More Of The Same

from the no-surprises-here dept

So the winners of the 700 MHz spectrum auction have been announced and to say that there were no surprises would be an understatement. It played out almost exactly as most observers predicted it would. Verizon Wireless ended up with the C-block (with Google only bidding right up to the cut-off amount to force Verizon to play by "open" rules) and AT&T added some spectrum as well, which it can add to the 700 MHz spectrum it picked up separately last year. The end result? Nothing too exciting for consumers. Whether or not Verizon Wireless's required "openness" makes a difference remains to be seen. What didn't happen was someone new entering the scene -- meaning that we're not going to see anything really new come out of all this spectrum.

In fact, perhaps the most bizarre bid of all was EchoStar spending $700 million on spectrum that can only be used for one-way communication. One-way communication is less and less useful these days. EchoStar has been making some interesting moves of late, but using this spectrum to build a mobile TV broadcast solution (which is what many expect) makes little sense. It will cost the company billions, and then they'll be limited to a one-way communication system just as people are recognizing that the real value is in multi-directional communications. It may give the company another option rather than relying on satellites (which are costly and troublesome at times), but the expense is way too high considering the limitations. So, even with EchoStar, we're talking about "more of the same." That's too bad, as there was a quiet hope that someone different would step in and do something really new and interesting with this valuable spectrum.


Reader Comments (rss)

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    Nick, Mar 20th, 2008 @ 6:31pm

    And once again the public loses

    It's really sad that it ended up this way. This spectrum could have been so phenominally useful to all of the small ISP's out there to provide services in the areas that Verizon and AT&T have always, and will continue, to completely ignore.

     

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    Quantity Surveyor Man, Mar 20th, 2008 @ 7:23pm

    Think harder

    I can think of a whole lot of uses for a one-way broadcast band. Who says the answer has to come back in the same part of the spectrum?

     

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    Matt, Mar 20th, 2008 @ 7:23pm

    not quite, there was something shady too

    http://www.eweek.com/c/a/Mobile-and-Wireless/Ethical-Concerns-Swirl-Around-D-Block-Spectrum-Auction/

    this link points to that there may be a little more than meets the eye in dealing with the emergency spectrum block, it seems.

    So while EchoStar will fail, I wonder what will be done about D block?

     

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      Mike (profile), Mar 20th, 2008 @ 7:27pm

      Re: not quite, there was something shady too

      The D block will get re-auctioned without the open rules, and it will sell. I do think *something* fishy happened, but it's not clear how bad it really was. Unless there's more evidence, I'm not ready to say that anything really bad happened. It may have just been competitive jostling.

       

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    Mark, Mar 20th, 2008 @ 8:14pm

    Not all that surprising. . .

    that something auctioned off in huge segments by the federal gov't would not be being put to the most innovative use. We should go back to the pre-Hoover days when there were some private property rights in the spectrum.

     

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    mjr1007, Mar 21st, 2008 @ 7:36am

    Anyone else notice.

    The auction is just a giant tax on consumers. It's about the only thing that makes land lines competitive.

    Dedicating parts of the spectrum might have made sense years ago because of interference but it no longer does.

    Why not just let any and all companies use the spectrum and compete on price. Oh yea, the the bureaucrats and politicians wouldn't have anything to do or anyone to finance their campaigns.

    This is just a giant waste of time and money while being incredibly anticompetitive.

     

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    MaxB312, Mar 21st, 2008 @ 12:28pm

    What about the D Block

    What about the D block? As I understand it Congress just wanted to give first responders the spectrum. But instead our dear Chairman Martin decided to double the amount of spectrum for a public safety network and then sell it back to them. That worked out well. Did the Chairman not understand that the incredible build out requirements for a public safety network would probably not make it the most business-friendly? I guess not, or, maybe, he just didn't care. Either way, we're out a public safety network and Martin still gets to call the auction a success. I feel used.

     

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