The nation’s largest-ever spectrum auction is in full swing, and at the end of round five, the U.S. government has already raised nearly $1.5 billion.
When you think about it, that’s a truly amazing statistic. In just two days the U.S. Treasury is-potentially-$1.5 billion richer. I think this speaks volumes about the power of the wireless industry-spectrum is valuable and there are companies healthy enough to pay that much for it.
The best part? The auction could last for months, maybe even until Christmas, if we’re lucky. By then the bids will have slowed to a trickle and only the most important licenses will still be up for grabs-still though, it’s an exciting time to be in wireless.
But once you get past the truly staggering bid amounts (at the end of round four the New York A-block license was priced at nearly $28 million) there’s plenty of things to chew on. For instance: What will Charles Dolan, head of Cablevision, do with any licenses he might win? What will NextWave, bidding through AWS Wireless Inc., do with any licenses it might win? And now that Sprint Nextel Corp. is moving ahead with some serious WiMAX plans, how will its cable company joint venture (bidding under the name Wireless DBS L.L.C.) proceed with its auction strategy? Wireless DBS made the auction’s largest upfront payment at close to $1 billion, and at the end of round four was second only to T-Mobile USA Inc. in terms of total winning bids.
On the other side of the scale, it’s interesting to consider what’s going to happen to the smaller licenses being offered. At the end of round five, the cheapest license in play was for Converse, Wyo., with a high bid of $7,200. That’s less than the price of a new car. That price will probably change too, but still-even I could afford that.
(Interestingly, I just did a check on the A-block license for my home town of Socorro, N.M. As of round four, it’s selling for $61,000. Too bad, if it were cheaper … a lot cheaper… maybe I could buy it and give it to my parents as a gift or something. The sad part is that even if they owned the spectrum, my parents probably still wouldn’t use a cell phone.)
Of course, hanging over this whole auction spectacle is the lesson from Europe, where carriers spent billions on third-generation licenses and still have relatively little to show for it. But let’s ignore that, at least for a little while, and enjoy the show while it lasts.
As I view the whole auction process, with the results of each round rolling in, I can’t help but get excited. Watching the auction is sort of like bidding for a prized collectible on eBay-only better, because taxpayers and consumers will be the ultimate winners.
Plus, I don’t think any of the AWS auction winners will have to pay for shipping.
