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:
As has been often said, and in more loquacious ways, spectrum is the lifeblood of the wireless industry. Without it, we would all still be running for payphones, concentrating on our driving and having conversations with each other.
With that need, the Federal Communications Commission’s plans for the “one-of-these-days” auction of 600 MHz spectrum licenses is seen by many as a way to secure the future of the wireless market by providing much needed spectrum in a significantly valuable spectrum band. It’s not every day that spectrum below 1 GHz comes to market, and when it has wireless carriers seem to empty their piggy banks in trying to make sure they get a piece of it. Or so you would think.
T-Mobile US this week put out its idea on how the upcoming auction should be conducted, rolling out what it termed a “dynamic market rules” model that to those afraid of concrete decisions based on various probabilities would leave hiding under their beds.
I think the idea may have been best explained by Scott Cleland at The Precursor Blog with:
“To use a diving metaphor, this is like a synchronized diving event with unknown dozens of divers that first must do a reverse back flip to incentivize another set of divers right behind them to then do a front flip, but only if the particular diver before them does a reverse back flip that individually gets a good enough score to make a follow-on dive possible, and then if that happens for some of the diver teams, any follow-on dives would then be scored dynamically depending on a random target score of the previous dive, which would then determine if said diver can dive again or not.”
Now that’s loquacious! In fact, after having read that multiple times, I sort of can’t wait for the next Olympics so I can catch up on my synchronized diving.
Don’t get me wrong. I am all for kooky ideas, and the kookier the better.
But I can’t help but coming back to the notion that maybe we would not be in the competitive mess we are in if back in 2008 Sprint Nextel and T-Mobile USA had perhaps put in an effort to participate in the then auction of “beachfront” spectrum in the 700 MHz band. Instead, both failed to even participate, thus allowing the “big two” to run away with a vast majority of what has become central to their LTE efforts as well as the U.S. markets leadership position in rolling out LTE services.
I understand there were some financial and business decisions made back then that influenced Sprint Nextel and T-Mobile USA from participating, but when you need blood, haven’t vampires shown us that you do everything possible to get it?
More troubling is that proceeds from the 600 MHz spectrum auction will be needed to help fund the FirstNet public-safety network that to meet its coverage and capacity goals will need all the money it can get. Trying to limit the amount of money that could flow to that initiative in the name of creating stronger competition for commercial services seems to be a win-lose scenario. (Or is that lose-win?)
The fact that the FCC has to somehow placate television broadcasters looking to get every last penny out of the spectrum they are being forced to relinquish; the federal government that is looking to get every last penny to help pay for a spending “habit” it can’t seem to shake; the funding of a public-safety network that needs every penny to meet its coverage and capacity needs; and wireless carriers, each of which are looking to set up rules that tilt the competitive balance in their direction, seems to leave me with the sense that like most decisions in life, no one will be happy, but the lawyers will make a bunch of money.
Maybe it would be easier to just have a dive-off, where the winner gets to pick the rules. That should be unfair to all, and better yet, entertaining for me.
OK, enough of that.
Thanks for checking out this week’s Worst of the Week column. And now for some extras:
–Doubly sad news this week as Sprint Nextel shareholders approved Softbank’s pending $21.6 billion acquisition and Dish Network officially backed out of its attempt to acquire a stake in Clearwire. This is bad news for me as these have been some of the juiciest “deals” to come along the wireless highway since the days of NextWave.
(Though I shouldn’t be so surprised as I predicted this outcome several months ago. Now, where are those lottery tickets?)
Of course, bad news for me looks to be good news for Sprint Nextel, which can now get on with its attempts to re-establish its credentials in the domestic market. With fresh capital from parent Softbank (though less than what had originally be expected – thanks Sprint Nextel shareholders!) and a solidified hold on Clearwire’s 2.5 GHz spectrum, there should be nothing standing in the way of complete domination! Right?
I welcome your comments. Please send me an e-mail at dmeyer@rcrwireless.com.
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