Wednesday, March 19, 2008

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.

No comments: