214 qualified to bid in 700 MHz auction

The Federal Communications Commission said 214 applicants qualified to bid in the 700 MHz auction set to begin Jan. 24. Internet search engine giant Google Inc. joins a mix of leading mobile-phone carriers, cable and satellite TV operators and rural telephone companies in competition expected to generate up to $15 billion for the U.S. Treasury without necessarily leading to the creation of national public-safety broadband network.
With the FCC officially classifying Frontline Wireless L.L.C. ineligible to bid – a week after the once ambitious startup firm abruptly announced it was closed for business when auction upfront payments were due – first responders must pin their hopes on AT&T Mobility, Verizon Wireless or a dark horse – perhaps a Google or Alltel Corp. – to purse a national commercial/public-safety license costing at least $1.3 billion.
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Google, however, seems most focused on wireless licenses – accounting for about a third of the 62 megahertz of spectrum headed for auction – that have an open-access condition and a minimum $4.6 billion price tag. Another tech titan – Microsoft Corp. co-founder Paul Allen – will also bid for a share of the 1,099 licenses under the bidder name Vulcan Spectrum L.L.C.
Frontline, having financial backing from blue-chip Silicon Valley investors and a high-powered management team comprised of former telecom policymakers, had appeared a leading contender for the D-Block license up until last week.
“At this point, we expect the FCC and the public-safety community is exerting significant pressure on incumbent wireless bidders to bid for the D-Block license to ensure there is an entrant willing and able to build a wireless public-safety broadband network,” said Jessica Zufolo, a telecom analyst at Medley Global Advisors L.L.C. Public-safety groups and FCC officials said they remain hopeful the national commercial/public-safety network will become a reality.
In addition to Frontline, other notable applicants dropping out the 700 MHz sweepstakes include Denali Spectrum L.L.C. (an entity in which Leap Wireless International Inc. has a non-controlling indirect interest), U.S. Cellular Corp. and National Datacast Inc. (a venture of Gemstar-TV Guide International Inc. and PBS Enterprises Inc.).
Only the top two national cellular carriers – AT&T Mobility and Verizon Wireless – will participate in the 700 MHz auction, with Sprint Nextel Corp. and T-Mobile USA Inc. taking a pass. Regional wireless powers Leap, MetroPCS Communications Inc. and Alltel will vie for 700 MHz spectrum whose beach-front property value owes to highly advantageous propagation characteristics.
Cable TV juggernauts Cablevision Systems Corp., Advanced/Newhouse Partnership and Cox Communications Inc. were certified to bid, as was satellite TV operator EchoStar Satellite L.L.C.
CDMA technology king Qualcomm Inc. is in the 700 MHz auction mix as well. “We expect it will bid for licenses in the lower band to bolster its MediaFLO assets,” said Medley’s Zufolo.
The FCC will re-auction 700 MHz licenses whose reserve prices have not been met, with the agency reserving the right to modify license rules under such circumstances.