Hello! And welcome to our Friday column, Worst of the Week. There’s a lot of nutty stuff that goes on in this industry, so this column is a chance for us at RCRWireless.com to rant and rave about whatever rubs us the wrong way. We hope you enjoy it!
And without further ado:
I must confess up front that I love spectrum auctions. LOVE THEM!
(Maybe not as much as I love scotch, but they are right up there.)
This love of spectrum auctions is nothing new to those that have on occasion reviewed this weekly tirade.
As such, the Federal Communications Commission’s plans to auction off 600 MHz spectrum licenses at some point in the future has my full attention. And as such, seeing the hurdles that are in place to prevent a successful auction have me a touch concerned.
And to clarify, a successful auction is not one in which everyone gets what they want. To me a successful auction is one in which grown men are reduced to tears because they have sold their souls in order to purchase 5 megahertz of spectrum covering Converse County, Wyo.
The big hurdles concerning this auction, including when it will actually take place and how much of a pain television broadcasters will be in relinquishing spectrum, are ones I feel will eventually work themselves out and not have a real impact on the amount of tears eventually shed.
It’s the more mid-size hurdles that have me concerned, and some of them reared their ugly heads this past week. The most pressing was the continued bickering between those that want to limit the amount of participation from the nation’s two largest wireless operators and those that want to see un-godly amounts of money thrown at thin air.
Those that want to limit the participation of the “Big 2” claim that Verizon Wireless and AT&T Mobility already have near-total control of spectrum below the 1 GHz band and for that matter seem to be hoarding all of the industry revenues as well. (By using both of those comparisons, they have done a nice job of linking that spectrum control with that financial superiority. Well done.) This viewpoint also cites the need to increase competition in the wireless space and thus feel that if Verizon Wireless and AT&T are limited in how they can participate in the auction, those with less-endowed pocketbooks may have a chance to pick up some of that sweet, sweet spectrum.
There does seem to be some federal support for this side in the numerous statements from government officials claiming they want to see stronger competition and that by setting rules on who can have access to what spectrum is one way to do that.
The other side feels that the market should decide all, and that by setting artificial limits, the government is hindering the most productive usage of a resource. Also, by limiting the deep pockets from participates with deep pockets the government would be limiting the amount dumped into the pit of money the government wants to use to purchase $1,000 toilet seats. And we all know how much the government likes its $1,000 toilet seats.
The 700 MHz auction showed that when it comes to sub-1 GHz spectrum, carriers can’t help themselves in throwing money at it, even if some of that spectrum may have some interference issues. (Surely, those issues could be worked out later to the benefit of all?) So, you would think that in dealing with even “better” 600 MHz spectrum, the money tree will be stripped bare and those looking for the greatest financial gain would be doing all they can to ensure the greatest windfall.
If the government steps in and limits how much participation Verizon Wireless and AT&T can have in the 600 MHz auction, thus leaving most of the licenses open for less well-off carriers, the shape of the wireless space could indeed be changed. Of course, as we have seen in the 700 MHz space, many of those that won licenses realized that the financial commitment that came along with those licenses resulted in them eventually selling off those licenses to … wait for it … either Verizon Wireless or AT&T.
It should be noted that some of those opposed to unbridled participation from the Big 2 are not completely averse to at least some participation from the giants, citing the need for their economies of scale when it comes to getting equipment and devices manufactured to support those spectrum bands at reasonable prices. That part is sort of funny, no?
The smartest man in this whole mess would seem to be outgoing FCC Chairman Julius Genachowski, who is skipping town just ahead of all these decisions that need to be made. Sure, Genachowski was the man with the plan when President Obama laid out the administrations agenda to free up 500 megahertz of new spectrum over the next 10 years in order to satisfy consumer demand for mobile services. But, as we have seen over the past four years, following through with that plan is a bit different than just making a speech.
That leaves the >next FCC Chairman to handle this mess, and more importantly, ensure that those participating in the planned auction are at some point reduced to tears. Sure, that may sound cold and callous, but I have found it’s better to watch a grown man cry then to be that grown man crying.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–I have never been much for the brash, mobile virtual network operator types that have made the mobile space more colorful with their … brashness. I believe this boils down to my advancing years and general lack of flair.
(Did someone say flair?)
However, even my dulled senses were peaked this week when FreedomPop (best ice cream of all time) said it would begin offering free wireless services later this summer. I am not sure how they are doing all of this, though I am pretty sure there are some illusions involved.
Regardless, at that price point, seems like the risk of adding a bit of flair to one’s life is minimal.
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
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