|
|
700 MHz Auction Rules Wide Open
neutrality and application neutrality mandates (which are anathema to telcos as deleterious to network management and coincidentally allow for increased customer control). If the reserve price of $4.6 billion is not met at the auction, the C Block will be re-auctioned without the new device and application neutrality requirements. The cumulative effect of these multiple new rules makes this re-auction with reversion to the old rules scenario increasingly likely. Therefore, the incumbents could still win the war by gaining access to new lower cost spectrum without new mandates even though they lost the battle to initially impose new Internet-friendly obligations.
Tower providers will not benefit as much from 700 MHz deployment as they have from previous cellular communications roll-outs in other bands for multiple reasons. First, and foremost, fewer towers are needed due to relatively greater propagation and penetration characteristics of lower frequency spectrum. Second, new antennas can be added to existing tower sites. Third, incumbents who already lease tower space are the most likely successful bidders (see above).
Rural and small cellular operators are likely to be hit with a “double whammy” under the news rules, as less successful bidders at the auction and in losing roaming revenues as larger providers increase their spectrum portfolio and need less “fill-in” spectrum.
