700 Mhz Worth $28B

Posted by Sam Churchill on

Companies could bid as much as $28 billion if the FCC auctions licenses for 700 MHz-range frequencies, “assuming that the spectrum is unencumbered,” wrote William P. Zarakas and Dorothy Robyn of The Brattle Group, a consulting firm in Cambridge, Mass.

Licenses in the lower 700 Mhz band have already been auctioned. The remaining five C blocks are in Puerto Rico. They remained unsold in Auction No. 49, which closed on June 13, 2003. Auction 60 for the lower 700 Mhz band is scheduled to begin on 7/20/2005. Block C licenses cover 710-716 and 740-746 MHz for 12 MHz of spectrum (2 x 6 MHz paired).

Steve Stroh points out an error we made earlier. Most of the lower 700 Mhz band has already been auctioned. The FCC has completed their initial auction of 740 licenses in the Lower 700 MHz band in the C and D blocks in 2003. Here’s a DailyWireless story on that auction.

In 2002, the FCC reallocated the 698-746 MHz spectrum band (Lower 700 MHz Band) that had been allocated to television Channels 52-59. The recovery of the Lower 700 MHz Band will be made possible by the conversion of television broadcasting from the existing analog transmission system to a digital transmission system.

One access point in a 700 MHz network can cover the same area as four access points in a 2.4 GHz network or 10 access points in a 4.9 GHz network. By having fewer access points, installation and maintenance costs are reduced. In addition, 700 MHz signals often penetrate building walls better, a critical benefit for first responders and consumers.

It’s prime real estate. It’s licensed. That reduces interference significantly. In addition, the 700 Mhz band can use more power. All that adds up to the best wireless broadband spectrum available in the United States. Some observers believe 700 Mhz will deliver better-than cell range with less cost and more speed.

A killer combination.

The $28 billion figure might even be conservative, given that bidders most likely will pay more to have access to a signal that covers twice the area of cellular at 1.9 GHz, the Brattle Group, added. The 700 MHz band is better equipped than the 1.9 GHz band “for providing broadband wireless services,” it said.

The 700 MHz category currently occupies 108 MHz of the radio-frequency spectrum, but 48 MHz of that bandwidth is not available for public auction because it has been sold or is allocated for public safety communications.

The FCC determined that all broadcasters could operate their DTV systems in Channels 2-51. That leaves the Upper 700 MHz Band (60 megahertz of spectrum corresponding to channels 60-69), and the Lower 700 MHz Band (48 megahertz of spectrum corresponding to channels 52-59), available for broadband wireless users. But there are still some tv stations using those frequencies — and now they don’t have to move until December, 2008.

Public service users already got a bundle of channels in the 800 Mhz band from UHF channels 70-83. And they’ll get some more when Nextel moves out.

In 1998, the FCC adopted service rules for the 24 megahertz of spectrum in the 764-776/794-806 MHz frequency bands (collectively, the 700 MHz band). That leaves 60 MHz of the spectrum, “which consist of Blocks C and D in the Upper 700 MHz Bandplan, and Blocks A, B, and E in the Lower 700 MHz Bandplan,” Zarakas and Robyn wrote.

“Our estimate represents only the auction revenue … that this 60 MHz of spectrum of unencumbered spectrum in the 700 MHz band would generate,” the Zarakas and Robyn letter continued. Their research was commissioned by Qualcomm, a member of the HDTV Coalition that wants the spectrum.

The letter also said the sale of the spectrum “would result in benefits to American consumers in the form of new broadband services and lower prices of existing services.”

Only six (“D”) channels are available in broad sections of the United States, nearly the size of time zones. That channel, at 716 MHz-722 MHz (UHF channel 55), is now home to Qualcomm’s MediaFlo, a mobile TV service wholesaled to cellular operators. It will cover the United States with mobile television. QUALCOMM bid $38 million for the five available Economic Area Grouping (EAG) D block 700 Mhz licenses and picked up the 6th (the Pacific Region) from Aloha Partners who won that license in the FCC s previous auction (Auction 44).

Qualcomm is investing $800 million to launch MediaFlo, their national cellular TV service in 2006 over its own 700 Mhz spectrum, broadcasting up to 20 channels for wireless carriers to sell their customers.

Qualcomm’s MediaFLO network is capable of carrying up to 100 channels, with as many as 15 of them streaming live video. As a shared resource for U.S. CDMA2000 and WCDMA (UMTS) operators, the network will carry content in the nationwide 700 MHz spectrum (UHF TV channel 55) owned by the CDMA pioneer. Qualcomm plans a one-way broadcast service for mobile users.

Another competitor, Crown Castle, owns 5 MHz of national spectrum in the L band (1670-1675 MHz) and owns, operates and manages over 10,600 wireless communication sites in the U.S.. The have deployed DVB-H technology in a three-site, single-frequency network trial in Pittsburgh. Crown Castle plans to broadcast to millions of mobile users using low powered transmitters on cell towers.

Some 90 Mhz of spectrum (see DW: President Wants 90MHz), will be auctioned in June, 2006. The spectrum, at 1710-1755 MHz and 2110-2155 MHz, will be broken up in smaller geographic portions in order for smaller carriers to bid on them.

In the past, federal auctions of American airwaves, especially for cellular communication, has been a “win-win situation for both the government and consumers,” said Patrick Ross, a spokesman for The Progress and Freedom Foundation, whose group is a conservative think tank in Washington focusing on digital technology.

Under FCC guidelines, the sale of 700 MHz band, currently used by some television stations, could start next year.

The United States “devotes only about 190 MHz of spectrum to fixed and mobile wireless communications services, and that figure has not grown since the mid-1990s” the letter said, adding that European nations “allocate 255-300 MHz on average” for similar services, with the exception of Germany, the Netherlands and the United Kingdom. These countries allocate 302 MHz, 355 MHz and 340 MHz, respectively, according to the letter.

Under current law, broadcasters are required to turn over their analog spectrum by Dec. 31 of next year. A cleverly worded, broadcaster-inspired caveat to the law, however, renders that deadline almost pointless: if fewer than 85 percent of the homes in a market can receive digital signals, broadcasters may continue to camp out in their analog spectrum.

A new bill drafted by House Republicans sets Dec. 31, 2008, as the date by which broadcasters must return their analog airwaves to the government and broadcast in digital only. That deadline two years later than Republicans originally advocated drew bipartisan support at a House hearing Thursday.

Lawmakers are split along party lines over whether the government should buy converter boxes for millions of Americans who still use antenna-based TVs, once the nation’s shift to digital TV is finished.

But the bill includes no subsidy for the $50 boxes, which would convert digital to analog for consumers who use analog TVs that rely on antenna rather than on cable or satellite TV.

Key Republicans say they’re willing to set aside $500 million for a subsidy for households that have no cable or satellite service and that earn less than $30,000. “I myself could support a limited subsidy for low-income households,” says Rep. Joe Barton, R-Texas, chairman of the House Commerce Committee.

America’s farmers and other rural consumers are pleased that Congress has pushed back the digital television transition to December 31, 2008,” said Larry Mitchell, spokesperson, the Alliance for Rural Television. “However, it is vital that the legislation mitigate the economic impact to rural residents who will be required to purchase expensive equipment to receive programming via free over-the-air, cable or satellite broadcasting.

Most Democrats say anyone who buys a box should get a subsidy. They would include even more affluent consumers, as well as lower-income, antenna-only homes where the box would be used for second sets and in pay-TV homes with extra sets that use antennas. “A digital TV tax will not go over very well with consumers,” says Rep. Ed Markey, D-Mass.

Aloha Partners, owner of 77 licenses in the 700 MHz band, said it is poised to receive a waiver from the FCC that will allow the company to launch a pilot high-speed mobile data network in Tucson, Ariz., to serve the public-safety community.

Mobile WiMax, on the other hand, should be here in a couple of years – right in time for the great DTV channel migration and freeing up the 700 MHz band. Alcatel and Intel plan to offer mobile WiMax products by mid-2006. When 802.16e comes out, it will feature scalability. Scalable-OFDMA (pdf) has better indoor penetration and multipath resistance. SOFDMA is not backward compatible with OFDM256, which is the basis of most early “pre-WiMAX” equipment.

Last year, Nextel picked up MMDS (2.5 GHz) licenses for almost half the big cities in the U.S. for $214 million, mostly as part of WorldCom’s bankruptcy fire sale. McCaw’s IFTS/MMDS (2.5 Ghz) patchwork includes WatchTV, which controls 33 channels of ITFS and MMDS in Ohio; Speednet, whose licenses cover 500,000 households in north and central Michigan; and Gryphon Wireless, which uses ITFS channels in Nebraska. Steve Stoh says Airspan and Vyyo are shipping 700 MHz gear. Airspan and picoChip plan a product, called SoftMAX, for 802.16e mobility.

Mobility is the next big thing for WiMax. WiBro’s 2,048-tone multiple-access scheme, compared with WiMax’s 256 tones, “means this stuff [harmonization] is really complex,” said Ron Murias, manager of applied R&D at future WiMax systems vendor Wi-Lan Inc. . The best solution, he believes, is to deploy OFDM 256 for both fixed and mobile WiMax. That will let carriers perform a software upgrade to their systems to achieve the MAC functions of 802.16e while avoiding the need to swap out the PHY board until the market is proven.

With WiMax Chipsets, McCaw’s Clearwire (or Sprint-Nextel) could offer a double-whammy; 700Mhz could handle public service radios (on their own frequencies or Aloha’s), while the 2.5GHz band (using 802.16e) could deliver mobile service to multi-media phones, music players, video-enabled PDAs and laptops.

Market researcher Maravedis predicts that there will be more than 16 million Mobile WiMAX users within the next few years and that Mobile WiMAX chipset revenues could reach more than $700 million by 2010.

But WiMax currently only works on 2.5 GHz, 3.5 GHz and 5.8Ghz frequencies. The 700 Mhz, 900Mhz, 2.4 Ghz, 24 Ghz, and 60-90 GHz bands do not have a working WiMax profile (yet). Airspan’s 700 Mhz WipLL broadband wireless system is eligible for purchase under Rural Utility Service (RUS) funds, however.

There are a number of public safety spectrum planning meetings coming up in June and July. These meetings will provide updates on both the 700 MHz and 800MHz bands of the spectrum. Meetings are scheduled for the Nevada, Oregon, West and Central Texas, Kentucky, Southern Lake Michigan and the New York City Metro Region.

The Oregon 700 MHz Public Safety Planning Committee will hold its next planning meeting on Thursday, June 23, 2005, at 10:30 A.M. at the Washington County Consolidated Communications Agency. Oregon’s State Interoperability Executive Council coordinates service in my neck of the woods.

Region 1: Alabama Region 2: Alaska
Region 3: Arizona Region 4: Arkansas
Region 5: Southern California Region 6: Northern California
Region 7: Colorado Region 8: Metropolitan NYC Area (NY, NJ, & CT)
Region 9: Florida Region 10: Georgia
Region 11: Hawaii Region 12: Idaho
Region 13: Illinois (except Southern Lake Michigan counties) Region 14: Indiana (except Southern Lake Michigan counties)
Region 15: Iowa Region 16: Kansas
Region 17: Kentucky Region 18: Louisiana
Region 19: New England and Metropolitan NYC Area (NY & NJ) Region 20: District of Columbia, Maryland & Northern VA
Region 21: Michaigan Region 22: Minnesota
Region 23: Mississippi Region 24: Missouri
Region 25: Montana Region 26: Nebraska
Region 27: Nevada Region 28: Eastern Pennsylvania (east of Harrisburg, southern NJ & DE)
Region 29: New Mexico Region 30: Eastern Upsate New York
Region 31: North Carolina Region 32: North Dakota
Region 33: Ohio Region 34: Oklahoma
Region 35: Oregon Region 36: Western Pennsylvania
Region 37: South Carolina Region 38: South Dakota
Region 39: Tennessee Region 40: Texas (Central & Northeast)
Region 41: Utah Region 42: Virginia
Region 43: Washington Region 44: West Virginia
Region 45: Wisconsin (except Southern Lake Michigan counties) Region 46: Wyoming
Region 47: Puerto Rico Region 48: US Virgin Islands
Region 49: Texas – Central (Austin Area) Region 50: Texas – West & Central (Midland Area)
Region 51: Texas – East (Houston Area) Region 52: Texas – Panhandle, High Plains & Northwest (Lubbock Area)
Region 53: Texas – Southern (San Antonio Area) Region 54: Southern Lake Michigan (Great Lakes inc. WI, IL, & IN)
Region 55: Western Upstate New York

Aloha Partners owns 77 licenses in the 700 MHz band and was a big winner in Auction 44 in the lower 700 MHz Band (pdf & html), which packages 12 MHz on a pair of 6 MHz channels; one at 710-716 MHz (on UHF channel 54) and one at 740-746 MHz (on UHF channel 59).

Aloha recently bought the second and third largest 700 MHz spectrum holders, Cavalier Group L.L.C. and DataCom Wireless L.L.C. for an undisclosed amount. That provides Aloha Partners with spectrum in 244 licensed markets, covering 175 million potential customers. That gives Aloha Partners 100-percent coverage in the nation’s 10 largest markets and 84-percent coverage in the top 40 markets.

DailyWireless has more on The 700 MHz Club, Auction #44 in the 700 MHz Low Band, Big Media Mobilize, Mobile TV Expands and WiMax on the Move.

Posted by Sam Churchill on Sunday, May 29th, 2005 at 12:21 am .

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