What Does The FCC Wireless Auction Really Mean? A Revolution? Doubtful…

Posted: March 24, 2008 in Mobile
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Federal Communications Commission (FCC) Chairman Kevin J. Martin today released additional information
FCC Logo regarding the provisional winners in Auction 73 (the 700 MHz Auction).  The Auction raised a record $19.592 billion, advanced new wireless open platform policies, created opportunities for new entrants and small businesses both nationwide and in rural markets.

But will it create real change? Very doubtful – mainly because Verizon & At&T were the largest winners (acquiring 80% of the new bandwidth), thus making the largest national carriers even larger. Although this was of course no surprise.

Don’t get me wrong – there’s nothing wrong with the large carriers further bulking up. In fact, hopefully it will mean infrastructure improvements and the advancement of mobile web experiences for both consumers and marketers alike. But this certainly doesn’t seem like the beginning of competitive pressure on the carriers as the motivating force behind that advancement. Currently it is the infrastructure of the carriers that is our weakest link in mobile marketing.

The FCC statement continues to state that “A bidder other than a nationwide incumbent won a license in every market. As a result of the 700 MHz Auction, there is the potential for an additional wireless ‘third-pipe” in every market across the nation. Additionally, 99 bidders, other than the nationwide wireless incumbents, won 754 licenses – representing approximately 69 percent of the 1090 licenses sold in the 700 MHz auction. The Auction therefore drew wide-ranging interest from a number of new players. For example, Frontier Wireless LLC (EchoStar), which is widely viewed as a new entrant, won 168 licenses in the E block to establish a near nationwide footprint for its services for consumers.”

Non-nationwide incumbents showed significant interest in rural areas as well. 75 new players won licenses to serve 305 rural areas of the country (428 Rural Service Area licenses in total). Winners in these markets will provide increased access to broadband and greater choice in wireless service for consumers living in rural areas.”

I guess only time will tell. It is interesting to note however that Google, one of the many bidders for licenses who we all figured would have put their best foot forward to acquire some of this new found bandwidth, , did not win any, and that Paul Allen’s Vulcan Ventures was one of the lucky winners. Let’s see what that means, if anything…



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