The advanced wireless services auction is scheduled to begin in less than two months. The filing deadline for short-form applications is Wednesday. The upfront payments deadline is three weeks later. And yet the unknowns are many.
If the objective is to create suspense in advance of the mother of all spectrum auctions-at least in the United States-a better script could not have been written. Indeed, it is still taking shape. The Federal Communications Commission is doing its part. And so are others.
June 29 is the scheduled start date of the AWS auction, yet a health-related suited being re-filed in a federal appeals court could complicate when bidding begins for the 1,122 wireless licenses in the 1710-1755 MHz and 210-2155 MHz bands. It will be a few weeks until anyone knows whether the FCC will employ a blind-bidding format or a transparent approach chock full of information on who is bidding how much on what licenses round by round. Put another way, will the AWS be competitive or complacent?
What about designated entities, the regulatory category accorded small businesses eligible for 25 percent bidding credits. They’re still digesting rule changes, undoubtedly burning the lines with lawyers and financiers about the new lay of the land.
Who might bid on this valuable spectrum? T-Mobile USA Inc., the No. 4 mobile phone operator, is a good bet. Other national wireless carriers may want to bulk up in this or that market or simply buy up frequencies otherwise needed by competitors. Will cable TV, Internet companies, telecom manufacturers and others show up at the big dance?
Just how much money might be generated for the U.S. Treasury? The Congressional Budget Office projects the AWS auction (and some smaller auctions) could ring up $15 billion for the government. That’s money the Bush administration, weighted down with a bulging budget deficit and superfluous spending by porkers on Capitol Hill, could use.
David Porter, an auction expert and professor at the Interdisciplinary Center for Economics Science at George Mason University-of Final Four fame-told a gathering last week he’s got a hint of what’s to come. Porter doesn’t have answers to all the unknowns. But he has identified what you might call a leading indicator: the demand for consultants. It’s off the charts, according to Porter. Porter predicts big things at the AWS auction.
“I would be absolutely surprised if it’s a blind auction,” said Porter. “And from all indications, it’s going to raise a significant amount of money…All the consultants are working.” Porter himself may well join their ranks before long.
