The FCC’s 700 MHz auction starts tomorrow. Auction 73 includes 1,099 licenses in the 700 MHz Band. A total of 62 MHz will be auctioned with 6-22 MHz per license. RCR News and Blog Runner have complete coverage.
The NY Times says it is expected to include multibillion-dollar bids from the nation’s two biggest wireless phone companies, Verizon and AT&T, as well as Google. Frontline, which was expected to bid on 22 mhz for shared public safety/public service use, closed it’s doors last week.
That could leave an opening for Verizon, which could pick up the $5B tab. Building out that space could cost another $10B. But AT&T and Verizon already own cellular towers across the country, with many designed for 800 MHz service. Phone companies that provide rural phone service are also eligible for government-backed rural subsidizes.
In addition, Verizon is a subcontractor in the giant $10B dollar federal IWN project to install thousands of 700 MHz towers in every community in the United States. That might — in effect — act as a cross-subsidy. The communications network would use Project 25, 2-way radios, and be used only by federal law enforcement agencies (not local first responders). But the Integrated Wireless Network (Washington Post story) — was severely criticized by the Inspector General. Some critics believe IWN will never be completed because of the $5-$30B taxpayer cost (estimates vary).
The FCC’s 700 MHz Band Plan (pdf) includes these provisions:
- 62 megahertz of spectrum will be divided into five spectrum blocks, and auctioned for commercial uses.
- The commercial spectrum will be made available at auction in a mix of geographic area sizes, including Cellular Market Areas (CMAs), Economic Areas (EAs), and Regional Economic Area Groupings (REAGs).
- The 10-megahertz Upper D Block will be licensed on a nationwide basis and will become part of a 700 MHz Public Safety/Private Partnership.
- Within the 24 megahertz of public safety spectrum, the public safety wideband spectrum is being redesignated for broadband use to allow for nationwide interoperable broadband communications by public safety users.
- The public safety broadband spectrum is placed in a 10-megahertz block at the bottom of this band and the existing public safety narrowband spectrum is consolidated in a 12-megahertz block at the top of the band. Internal guard bands are placed in between the broadband and narrowband segments.
- There will be a single, nationwide license for the public safety broadband spectrum, assigned to a Public Safety Broadband Licensee, which will work with the adjacent commercial D Block licensee as part of the 700 MHz Public Safety/Private Partnership.
- The Upper D Block commercial licensee and the Public Safety Broadband Licensee will form a Public Safety/Private Partnership to develop a shared, nationwide interoperable network for both commercial and public safety users
Both AT&T and Verizon spent billions last year acquiring rural telephone operators.
Verizon Wireless bought Rural Cellular Corp. for $2.67 billion in cash and assumed debt last July. Verizon Wireless said the proposed acquisition will expand its wireless service coverage in rural areas; Minnesota-based Rural Cellular Corp. has networks located in Massachusetts, Maine, New Hampshire, and Vermont, as well as in Minnesota, North Dakota, Wisconsin, and several other states. AT&T bought the larger Dobson Communications for $2.8 billion, a rural wireless service provider.
Those acquisitions may give both AT&T and Verizon entree to federal rural subsidizes — and help shut down any plans by Google. Or maybe not.
The FCC is set to release several proposals aimed at reforming the Universal Service Fund, a government-subsidized fund that pays telcos to offset costs of deploying telecommunications services in rural areas. Kevin Martin, the Commission’s Republican chairman, likes “reverse auctions”, which would designate one company to receive financial assistance from the fund in any given geographic area.
In a reverse auction, only one company gets the subsidy. That company is chosen in a bidding process whereby the company that bids the least subsidy, wins.
There will be support for two providers in each under-served area; one providing voice and broadband (probably the landline incumbent), and one providing voice with wireless mobility. That would likely be AT&T or Verizon.
Related DailyWireless stories include; Frontline: Out of Business, The 700 MHz List, Google’s 700 MHz Plans, FCC Finalizes Rules on 700MHz: Limited Open Access, No Wholesale Requirement, Frontline: Martin Plan Not ‘Open’, Frontline Files 700MHz Plan with FCC, Cyren Call Proposes Joint Commecial/Muni for 700Mhz, 700 MHz Scenarios, AT&T Buys 700MHz from Aloha, Google Android hits G-Spot, Google’s 700 MHz Plans, Cyren Call to Manage Public Safety Spectrum, Android Developer Challenge — $10M, Google: We Got Trouble. . . In 700 Mhz, AT&T, Verizon & Frontline Want 700Mhz Changes, AT&T Buying 700 MHz from Aloha Partners, Oregon’s $500 Million Statewide Wireless Network, General Dynamics Wins IWN Contract, Joint Commecial/Muni Proposed for 700Mhz, Small Ops Squeezed Out of 700MHz?, Verizon Makes its Move for Universal Service Fund, The Smartest Guy in the Room, 700 MHz On The Line?, 700 Mhz Worth $28B, RUS Funding for 700 MHz, The 700 Mhz Club, Channel 54: Where are You?
