Optical/IP Networks

The Auctions Endeth

NOON -- The AWS auctions are over, and a total of $13.7 billion -- right in line with my expectations of $10-15 billion -- will be forked over to the United States Treasury for such vital government projects as poultry litter composing and a viticulture consortium.

OK, I am no fan of the auctions or an awful lot of what the government spends trillions on. While ignoring the latter for the moment, all of those billions will be paid by you and me in the form of higher service fees, less coverage, less capacity, and likely continuing declines in the quality of customer service. And I’m not even sure if constitutionally the auctions are legal. I am not a lawyer, but it would seem the ninth and tenth amendments to the U.S. Constitution apply here.

But let’s look on the non-legal bright side, shall we? T-Mobile US Inc. will finally be able to get busy on 3G. Cingular Wireless and Verizon Wireless can continue their expansion. A consortium of cable companies (known as SpectrumCo LLC -- how clever!) can pursue a strategy of fixed/mobile diversity, if not (eventually) convergence. The satellite TV guys -- hoping to build a terrestrial/space hegemony -- had to drop out when the bidding got a bit too rich for their blood. Again, the dollar amount was no surprise, but it is, regardless, a lot of money no matter how you slice it.

As a few government agencies still need to clear out of this spectrum before we mere mortals get to yack over it, the benefits are still off in the future. But the results of the auction show an industry that remains vibrant, with sufficient competition to offer at least the hope of prices not getting too far into the stratosphere. And this is certainly not the last auction. I think most industry insiders are drooling over the 700MHz auctions, which will likely be held around 2009, and even 600MHz after that. This spectrum has great propagation characteristics, and perhaps the TV guys will be even more prominent in these auctions when they occur.

— Craig Mathias is Principal Analyst at the Farpoint Group , an advisory firm specializing in wireless communications and mobile computing. Special to Unstrung

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