Spectrum Marketplace Funding Story Featured in Dow Jones eNewsletter

With talk about the tanking world economy becoming cliché, it's reassuring to hear someone is still receiving funding... Today's Dow Jones eNewsletter "VentureWire Alert" featured Spectrum Bridge's Series B financing news today.

The article reads as follows:

After seeing plenty of action on its newly launched online marketplace, Spectrum Bridge Inc., which matches up buyers and sellers of wireless spectrum licenses, has closed an $8.1 million funding round.

The Series B round, which is expected to be the company's last, should carry the 27-employee company to profitability within a year, said Rick Rotondo, vice president of marketing.

New investor Espirito Santo Ventures led the round, joined by previous backers True Ventures, Telecommunications Development Fund, Milicom Venture Partners and company founders.

In mid-September, the Lake Mary, Fla.-based company activated its Web site, SpecEx.com, and since that time has listed more than 1,000 licenses for spectrum, and registered more than 100 companies and agencies as potential buyers or sellers.

"It's been cranking," Rotondo said. "We are building [the site] so that buyers and sellers can have a one-stop shop."

Radio spectrum, which can also be used for broadband delivery, is a patchwork quilt of chunks of bandwidth, with pieces large and small, that together blanket most of the United States.

The FCC frequently auctions off parcels of spectrum, but until now an online marketplace for these pieces of bandwidth has not existed.

VentureWire is available for a two week trial, and touts itself as the "premier source of breaking news and critical information about venture-backed companies and their investors."

New Site Revealed

The SpectrumBridge.com website just completed its face lift this weekend. The site remains a portal and showcase for the SpecEx marketplace (for trading licensed spectrum), but it now also includes more info on:

• The FCC's view of secondary markets
• A breakdown of how SpecEx works for Buyers and Sellers of spectrum
• Education on the secondary market
• "Get Started" section for demos, eNewsletters, spectrum requests
• and more.

WCAI Trade Show Follow-Up

“The conference began the day of the presidential election, so that was fresh on everyone’s minds, “says Beverly Lambright, a member of Spectrum Bridge’s marketing team. “But the big buzz was focused on the economy and how that will be affecting the wireless industry."

The 3-day, annual conference included 700 registrants, 20 exhibitors, and 63 speakers in 19 panel sessions on wireless topics from WiMax deployment in North America to digital television white space and beyond. Attendees enjoyed keynote addresses from Kevin Martin, Chairman of the FCC, Benjamin Wolff, CEO of Clearwire and Larry Page of Google, among others.

The event also hosted a Broadband Summit with FCC Commissioners and State Utility Commissioners for a Joint Conference on Advanced Services.

To read Spectrum Bridge's full report on the show, visit our Industry Events page, or click here for a pdf document.

Commentary on the White Space Vote

The white space issue was pushed through at the November 4th FCC meeting, probably as a political expedient. As such, it was not well supported or thought out. At this time it is likely that there will be a court challenge and possibly a review by the new administration. Both of which will significantly slow things down.

Even then, this is only the beginning; not the end. The FCC now has to define rules and regulations for the use of White Space and you can be sure all the interested parties will be actively involved. So it will take a significant amount of time before we can truly analyze the impact. Right now White Space is perched on the crest of the hype curve.

We will have to watch how deeply it drops into the trough of disillusionment before the reality can be assessed.

The eBay of Wireless Spectrum

Network World published a great piece on Spectrum Bridge and the new online marketplace for spectrum: SpecEx. The article hit on major points relating to the FCC, past attempts at the spectrum marketplace idea, numerous quotes, and nails some points we are currenty explaining to interested users.

See the article here: SpecEx the eBay of Wireless Spectrum

Press Releases and Forbes

Among the notable sources which are now talking about Spectrum Bridge and our product, SpecEx are:

• forbes.com
• techcrunch
• moconews.net
• fiercewireless
• washingtonpost.com
• nytimes.com
• TheRegister

Each of these links goes directly to the story about SpecEx. We are trying to keep a running list of stories on our news page, but things are taking off so quickly we're bound to miss some!

Spectrum Bridge Featured in the Wall Street Journal

The Wall Street Journal newspaper reaches approximately 2 million subscribers, and the online edition boasts around 930,000 paying subscribers. The recent Spectrum Bridge feature in the WSJ was written by Mr. Amol Sharma and introduced this huge audience to the idea of buying, selling and leasing licensed spectrum on an online resource.

A notable quote from the piece was by an FCC spokesman who stated "Chairman Martin has always been supportive of secondary markets and generally sees this as a positive business framework."

We will never get tired of hearing how the FCC thinks this is a good idea. Look for Spectrum Bridge in more coverage from respected news sources such as the Wall Street Journal shortly...

Thanks Larry!

Larry Page: U.S. government should open up its spectrum.

If you read Larry Page's comments reported in the referenced article he could have been talking about Spectrum Bridge.

Within the next couple of months we will have all the capability Larry envisions online. I can't wait. We agree with everything Larry says, but would go further...

The FCC currently has a huge stash of "orphaned" spectrum that is too fragmented to auction in the traditional manner, but the spectrum exchange would be a great place to make it available to the commercial community while making some valuable revenue for the Government. So what sort of spectrum is out there?

First, there are holes between licenses. Many licenses are described as circles that don't overlap so there is the space between the circles. Then there are the left over pieces of spectrum from auctions that did not sell. Add in the little left over’s from various partitioning exercises over the years and spectrum returned to the FCC for one reason or another and the stash gets pretty big.

The Spectrum Bridge Message is Getting Out

This is just the first two links in a series of interesting takes on what Spectrum Bridge is doing:

The message is getting out

Spectrum Brokering

Cellular is Just the Tip of the Licensing Iceberg.

There is a perception that the cellular industry is the only game in town when it comes to spectrum. While it is true they are an "800lb Gorilla" both in terms of their size and spectrum holdings there are a few interesting numbers that provide a different perspective on life.

There are almost 2 million active licenses in the FCC database, discount the amateur radio licenses, the repair shop licenses and all the other odd ball stuff and there are still over 700,000 active licenses. Cellular only accounts for 8,000 of those licenses, roughly 1%. The big numbers are Public Safety, with over 148,000 active licenses and 'industrial/business" which accounts for around 400,000. Quite honestly the public safety number was a surprise to me. This is a number that begins to explain the magnitude of the spectrum management issue faced by Public Safety and Homeland Security.

To me the intriguing thing is the 400,000 industrial licenses. We live in the 21st century with a cellular service that is pretty reliable, ubiquitous and relatively inexpensive, so what is it that attracts industry to all those private 2 way, paging and P2P networks?

Is it still cost, availability, or something more subtle like the desire to be in charge of their own resources or the inability to overlay their business and applications on a cellular service model? As these industrial users begin to evolve to broadband wireless are they any more likely to adopt a cellular service provider than want to go it alone again?

The 700MHz Auction is Over.

The results are mixed, and we won't know who won, or what that means for our wireless future for a few days.

The good news from the government perspective is that the auction raised almost $20B which is twice what was expected. However the D block (the block that required sharing with Public Safety) did not get to it's minimum bid, and the C block (the block requiring open access) only beat it's reserve price by a few percentage points bringing in a total of $4,744,749,000.

The restrictions clearly hurt the perceived value which makes us think that the big bidders were the "usual suspects". We would expect that Verizon and AT&T will be the big winners. Anybody care to weigh in on alternatives? How about what this does for the future of wireless?

Over the next few days as the details emerge we will be able to determine who the big winners and losers are. Then we can start to discuss how spectrum needs will be met for all those who could not or did not participate.

One final thought, divide the $19.5B price tag by the size of the USA (3.79m sq miles) and divide by 52 (the number of MHz actually auctioned) and the price paid averages out to be $98 per MHz/sq mile over the 10 years of the initial license.

A Different Perspective on Spectrum

One of the basic tenants of our philosophy is that not all spectrum is created equal. A slice of spectrum has a different value dependent on time, location and application. The following link for an article in Wireless Design Asia has an interesting view of the issues that treating all spectrum the same can cause

Wireless Design Asia - Will US 700MHz Auction Be Remembered for Dismembering Wireless?

Every Blog has to Start Somewhere…

So I found myself staring at a blank screen thinking how do I make this relevant, useful and, valuable to anyone who reads it? So sticking to the tradition that a blog is a conversation let me start by telling you a story: Why did we start Spectrum Bridge and why do we think it will be successful?

We have spent most of our working lives in the communications industry and the wireless industry in particular - much of it providing wireless solutions to industries that need wireless communications as a business tool. In the days of two-way voice and push to talk communication this was pretty easy. But now those same enterprise customers need broadband data applications, everything from telemetry to remote desktops, video surveillance and mobile workers. These applications require bandwidth far in excess of a voice application. Voice can be compressed into a 12.5 kHz channel where as a video needs at least 20 times that much spectrum.

So where was all this spectrum to come from? New Spectrum allocations from the FCC are few and far between. What little is available (witness the current 700MHz auctions) is gobbled up by wireless titans like AT&T and Verizon for billions of dollars.

The only viable solution for enterprises today is to run in one of the unlicensed bands, either 2.4GHz or 5.8GHz, sometimes known as the ISM and UNII bands. The great thing about these bands is they are free. But, as with most things, you get what you pay for. The Part 15 radios that are certified for unlicensed operation are very low power and use contention based access which means that the coverage model is challenged and the QOS cannot be guaranteed. These are not things that an enterprise can compromise on for mission critical applications.

However if you break down a typical 700MHz auction bid, it translates into roughly $2,000 per square mile. So having a capability to disaggregate spectrum into small geographic areas was one of the basic ideas that became Spectrum Bridge. We knew of many enterprises that could afford a few thousand dollars per year to guarantee their access to spectrum. In many cases the cost could be instantly recouped because the capital cost of the equipment was much lower.

Deploying WiFi in the ISM band requires anywhere from 18-50 Access Points per square mile. Yet deploy a private WiMax network in the EBS band and the number of base stations required is 2-5. So even though the WiMax equipment is relatively expensive today compared to WiFi the overall cost is significantly lower, and we all expect WiMax equipment to get much cheaper as volumes increase.

Once we figured out how to disaggregate spectrum and manage its use to the satisfaction of the spectrum holder, the user and the FCC - the basic capability existed to turn spectrum into a commodity that could be traded on an open market. We believe this is by far the fairest and most efficient way to treat such a precious national resource. In effect the spectrum is always being used to provide the most economic benefit to the community.

Well it seems that I touched a lot of different topics here. Over the coming months we will discuss these and additional topics that catch our attention. Any thoughts or comments you may have are welcomed. Hopefully these will guide us to providing answers and information that keeps you coming back to visit.

-Peter Stanforth, CTO, Spectrum Bridge, Inc.