The FCC’s Advanced Wireless Services (Auction 66) starts today, bringing in as much as $15 billion to the U.S. Treasury, says the AP. It is targeting “3G” (UMTS) cellular services using the paired 1710-1755 and 2110-2155 MHz frequency bands. Business Week has a tip sheet on the contenders.
T-Mobile USA led the early bidding on Wednesday, provisionally winning 31 licenses by offering $437 million. The FCC auction raised almost $769 million after the first round of bidding. Bids for Round 2 totaled $933 million for 634 licenses with Wireless DBS (the satellite play) and T-Mobile coming in first and second with SpectrumCo (the cable play) coming in third. The sale could last several weeks.
UMTS-based Cingular and T-Moble might find the 5MHz wide channels of AWS a better match than Sprint and Verizon using EV-DO and 1.25 MHz channels. But other bidders including cable and satellite providers have put down earnest money for a shot at nationwide wireless service, providing real competition.
The 1710-1755 Mhz and 2110-2155 Mhz band was identified in NTIA’s July, 2002 Viability Assessment. They said that spectrum, currently used by a dozen government agencies, could be moved without disrupting communications systems critical to national security. That made room for some 90 MHz of spectrum, as per presidential directive (arguably, more of a Cingular directive).
It won’t be much good for Mobile WiMax. Athough WiMAX can use Frequency Division Duplex (FDD) which the FCC assigned to the AWS band, it gets it’s real cost/performance advantage by being optimized for single channel Time Division Duplex (TDD) voice and data.
Mobile WiMax uses SCOFDMA with techniques like beamforming, MIMO and sub-channelization. They work better on a single channel. Different sections of the same subcarrier (sub-channelization), allow multiple people to connect at the same time on the same frequency without interference. WiMax would be marginalized using duplex (FDD).
Isn’t that lucky for Cingular!
| Block | Total MHz | Pairings | Geographic Area |
| A | 20 | 1710-1720 and 2110-2120 MHz | Cellular Market Area (CMA) |
| B | 20 | 1720-1730 and 2120-2130 MHz | Economic Area (EA) |
| C | 10 | 1730-1735 and 2130-2135 MHz | Economic Area (EA) |
| D | 10 | 1735-1740 and 2135-2140 MHz | Regional Economic Area Group (REAG) |
| E | 10 | 1740-1745 and 2140-2145 MHz | Regional Economic Area Group (REAG) |
| F | 20 | 1745-1755 and 2145-2155 MHz | Regional Economic Area Group (REAG) |
Auction No. 66 will offer 1,122 licenses: 36 Regional Economic Area Grouping (REAG) licenses, 352 Economic Area (EA) licenses, and 734 Cellular Market Area (CMA) licenses, good for an initial term of 15 years.
Already, the auction has brought in $4.3 billion from 168 bidders (pdf) who made payments to qualify for participation. They are competing for the right to use a duplex (FDD) segment.
The top qualifier is Wireless DBS LLC, an alliance that includes two competing direct broadcast satellite providers: EchoStar and DirecTV. They paid $972.5 million upfront.
Second was SpectrumCo, a consortium of Comcast, Time Warner, Sprint Nextel, Cox Communications and Bright House Networks, with $637.7 million. Third was T-Mobile License LLC, at $583.5 million. T-Mobile is expected to be among the most aggressive bidders.
| Who Funds the FCC’s $300 Million Budget? |
| Telephone: $140.1 million |
| Cable: $49.7 million |
| Wireless phone: $42 million |
| Geostationary satellite: $9.6 million |
| Source: FCC |
Analysts say EchoStar and DirecTV plan to offer bundles of television and wireless services to customers. If EchoStar and DirecTV were to build a new cellular phone network from scratch, it would require billions of dollars and take years. The joint bid has helped to fuel rumors of a potential merger between the two companies.
SpectrumCo, the joint venture of Comcast, Time Warner and Cox along with Sprint is bidding against DirecTV & Echostar. The rumored DirecTV/Clearwire/Sprint deal for Mobile WiMAX and Sprint’s own Mobile WiMAX plans announced yesterday, provide an alternative route home (using 2.5 GHz TDD).
Perhaps the AWS auction (1.7/2.1 GHz FDD) is just a sideshow for satellite operators. They want to block cable’s wireless play anyway they can. Harold Feld, senior vice president of the Media Access Project, said the cable companies may also be getting into the auction simply to drive up the cost to the satellite companies.
The amount of spectrum, combined with the fact that the licenses for sale span the nation means a major new player could emerge. “If someone wanted to put together a national footprint they could do that in this auction,” said former FCC Commissioner Harold Furchtgott-Roth.
T-Mobile probably is the most motivated bidder in the auction. Compared to other wireless companies, T-Mobile is spectrum starved and their GSM-UMTS (W-CDMA) technology is a good match for the AWS spectrum. Other wireless carriers, like No. 1 Cingular Wireless (GSM) and No. 2 Verizon Wireless (CDMA) have also made large upfront payments and are expected to be active.
On Wednesday, August 9, 2006, there will be two rounds of bidding; from 10:00 a.m. – 12:00 p.m. ET and from 2:00 p.m. – 4:00 p.m. ET. Round results will be available approximately 15 minutes after the close of each round. The Commission will conduct this auction over the Internet, and telephonic bidding will be available as well. The Integrated Spectrum Auction System can be accessed at auctions.fcc.gov and here.
M2Z, a company funded by venture capitalists, hoped to launch a free nationwide broadband wireless network. They want to use the simplex part of the AWS spectrum (from 2155Mhz to 2175 Mhz).
M2Z argues the 20 MHz of bandwidth would lay fallow for years since they’re not paired with other airwaves. M2Z, which stands for “Move the cost of data transport to Zero,” has filed a 127-page proposal (PDF). It could also dovetail nicely with MVP’s satellite/cellular repeaters and Modeo’s DVB-H mobile television, which also use the 1.7GHz band. Triple play.
Cingular, Sprint, Verizon satellite and cable operators are not big fans of “free” nationwide broadband wireless. The FCC has taken that (TDD) 20 MHz frequency block off the auction table.
If M2Z’s proposal solves the Universal Service Fund dilema, as they claim, and provides a cost/effective “digital divide” solution, it may put the Republican-controlled FCC in a difficult position.
DailyWireless has more on AWS Spectrum for Cable/Sprint?, AWS Attracts Bidders, FCC Sued over AWS Auction, AWS Auction: Does it Suck?, AWS Auction Delayed, The AWS & 700MHz Dance and 3G Band Scam?
