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700 MHz: D block fiasco leaves public safety network in limbo

In the MRT Bulletin, Donny Jackson opines on the stalled D block auction and its impact on the public safety network its meant to support. But first, he speculates on the majors players in the other blocks:

Because of the FCC's anonymous-bidding rules for this auction, we don't know the identities of the high bidders to this point. Of course, that hasn't prevented analysts from speculating that AT&T Mobility is very active in the A and B blocks that are adjacent to spectrum it purchased from Aloha Partners before the auction, that Qualcomm is the leading bidder for the unpaired E Block and that Verizon Wireless trumped a bid from search-engine giant Google for the C Block.

But Google can claim a victory, since the open access rule took effect as the bidding pushed past the reserve price.

For the D block, the question is should the FCC simply accept the single $417 million bid and face the wrath of the bidders who question the fairness of the auction since the public-private partnership terms seemed to be customized for Frontline, a company that closed down before the auction started, or reauction this block after revising the rules stipulating the obligations of the winner?

Of course, a reauction also means a delay in the beginning of potential negotiations between the Public Safety Spectrum Trust (PSST) and the D Block winner. During this time, there's sure to be lots of fingerpointing -- at the FCC for pursuing the public-private partnership idea, at the PSST for releasing a bidder information document that scared off potential bidders and at Congress for focusing spectrum auctions on revenue generation, which forces the FCC to adopt reserve prices.

Jackson speculates that this decision could be pushed into the next presidential term which might mean a new FCC Chairman replacing Kevin Martin, further complicating the resolution of this matter, and leaving the bidders' investors wary.

700 MHz: D block under scrutiny by House panel

eWeek.com is reporting that "U.S. Rep. Ed Markey's Telecommunications and Internet subcommittee is prepared to move quickly if the public safety portion of the Federal Communications Commission's 700MHz auction fails to meet its milestones."

As I reported previously the D block auction has stalled, and its fate seems to be reauction, so it looks like Markey will have his chance to effect his influence.

From eWeek, again:

"If the auction ends and the D Block has not met its reserve price, the subcommittee will actively review the parameters of that auction, including an assessment of its various conditions, the reserve price and the structure of the public safety trust," Markey said. "I am eager to see the extent to which the auction actually results in the introduction of new competitors into the marketplace in different regions around the country as well as the advent of new wireless services, devices and applications."

700 MHz auction: C block has maxed out?

First, let me give the latest on the FCC Auction 73:

Wireless Strategy has plotted the progress of the auction in their "Cost per MHz-pop by Block" graph.

The C block auction appears to have maxed out with Verizon the suspected winner.

"The B block is still climbing and has reached an average price of $2.59 per MHz-pop, with Chicago topping the $9.00 mark, Oklahoma City and Seattle topping $7.00 and nine more in excess of $5.00." With 734 B block licenses up for auction, there are many bidders involved. However, Wireless Strategy thinks that it's Verizon at work trying to block AT&T who demonstrated their interested in B licenses with their Aloha Partners purchase which "may alter the competitive landscape for both mobileTV and mobile broadband," according to Telecompetitor.

The A block auction is slowing. "Prices in the A block are much more palatable than in B, with only four licenses currently commanding a higher price than the average price in B (Tampa, Boston, Philly and LA)."

Looks like the D block has only one bidder and is destined to race reauction.

Bidding on the E block is still $122M short of the reserve price, with the suspicion that Qualcomm is keeping this auction "barely alive."

Another take on the languishing D block 700 MHz auction

The stipulations for the winning bidder for the D block in the 700 MHz auction may be daunting enough to make the whole plan sound unfeasible. Besides their own network plans, they must roll-out a nationwide system for the first responders in the public safety community utilizing the 700 MHz D block.

I was speaking earlier with Michael Rubin who was detailing me on a product by In Motion Technology that I had blogged about previously, when I asked about the D block auction problems. He said, "technology is getting way ahead of the policy makers." He went on to say that the FCC might not appreciate other options or comprehend the obstacles in building a ubiquitous network for all first responders across the country. Even the major carriers would be hard pressed to build such a network.

Also, the first responders must adapt their equipment so it can utilize the allocated 700 MHz spectrum. In Motion's product can work on any number of frequencies, which is their main selling point.

Here's Glenn Fleishman's explanation of the D block kerfuffle that he derived from a long post by Harold Feld:

In short, he writes that a one-time potential bidder moved into an advisory role to the body that will control the block for public-safety interests. He says that would allow them to set unreasonable terms for a winning bid, and that the FCC refused to set rules that would prevent unreasonable terms from being proposed. Thus, Frontline Wireless, the firm most likely to operate the D Block, shut down, as they couldn’t come up with a strategy that was financially sound. (The auction rules state that if you default, you forfeit the difference between your bid and the ultimate winning bid; Frontline could have easily been out hundreds of millions of dollars in that scenario.)

Included in the unreasonable terms set by the FCC are the ones which ensure that the winning bidder negotiates in "good faith" with the public safety community, by threatening a fine of $100 million and revoking the bidder's right to the spectrum it had acquired if a complaint is filed.

700MHz Block C hits reserve price: open access becomes a reality

Via Ars Technica:

After 17 rounds, the 700MHz spectrum auction has finally hit its one of its most closely watched targets: bidding on Block C has surpassed the Federal Communications Commission's mandated $4.638 billion reserve, meaning that the FCC's mandated open access rules will come into play. Bids on the block of spectrum totaled $4.744 billion after Round 17.

The auction rules require anonymous bidding, but it's speculated that among the three major players, AT&T, Verizon and Google, Google will drop out now that the reserve has been met.

700 MHz Auction: Round 12 pushes C Block to $3.8B

Via continuing coverage from FierceWireless:

The C Block of spectrum attracted a new bid in the round that brought its provisionally winning total to $3.8 billion. That is close to the $4.6 billion reserve price that the FCC implemented, and the next round requires a minimum bid of just under $4.3 billion. Chances are that block of spectrum will meet its reserve price if it gets two more bids. If the C Block does not meet its reserve price, the FCC will probably re-auction it.

The D block is stuck at the one bid at $472 million. The FCC has a reserve price of $1.3 billion for this block. This auction is fraught with controversy as I reported in an earlier post.

Controversy over 700 MHz spectrum auction

Quick background: FCC auction 73 opens bidding for the 700 MHz wireless spectrum that was previously allocated to analog UHF television channels 52-69. With the impending switch to digital television these frequencies are no longer necessary.

This Dow Jones report, Frontline Wireless Bid Failed Amid Investor Concern, Bid Rules, suggest why Frontline dropped out of the auction of the D-block band which is reserved for an auction winner that plans to build a network for public safety and commercial customers. None of the present or former participants may discuss details of the auction, so reports are based on unnamed sources.

Frontline's bid collapse may have been due to the obligation of the auction participants who bid on the D-blocks spectrum chunks. What worried Frontline's investors:

In order to ensure the winner of the D-block license cooperates with the public safety community, the FCC rules say if it is deemed the licensee wasn't negotiating in "good faith" it could be forced to forfeit more than $100 million and lose all rights to the spectrum it had acquired.

Here's an angry op-ed from a former Frontline advisor, Perspective: Quit fooling with wireless-spectrum auction:

Now, with the closure of Frontline Wireless, Martin [FCC Chairman Kevin Martin] is indicating that he may change some crucial rules after all the potential bidders decided whether to participate in the auction. If he changes the rules, it would threaten the whole FCC auction process, and possibly any government auction.

Harold Feld is making a case for stopping the auction.

UPDATE: The rest of the 700 MHz is proceeding...

700 MHz auction reaches $3.7B in fourth round

The 700 MHz auction paused Friday with $3.7 billion in bids on 921 licenses at the end of four rounds. Some 178 licenses have yet to receive a qualified bid. The C-block package of licenses covering 50 states attracted the highest bidding with one new bid reaching nearly $1.8 billion at the end of the fourth round. A minimum bid of $4.6 billion in needed to enact the open-access provision for the C-block.

Coverage of the auction by RCRWireless News

It's official: Google to bid in 700 MHz auction

Google has officially announced that it will bid in the 700 MHz spectrum auction, which is scheduled to take place in late January. The FCC will require the winning bidder of a slice of the upper C-Block spectrum to allow any application and any device on its network. Google has said it is happy with these open-access provisions despite not getting everything it wanted when it lobbied the FCC for open access.

It could be that Verizon Wireless' move to open its network to outside devices and applications was a competitive move against Google's plan to purchase spectrum.

GigaOm's  8 Things to Know About the 700MHz Auction

Mahalo's list of wireless spectrum auction links

Complete 700 MHz auction coverage by FierceWireless