re: Good Recap of FCC Spectrum Reauctions
>> Big Players Emerge On Top In Us C&F Block Auctions, As Treasury Nets Almost $17 Billion
Mike Woolfrey
Research Analyst
EMC
08-Feb-2001
After 101 rounds and 24 days of bidding the C & F Block auction has finished. The auction, which began on 12 December 2000 has swelled the US Treasury by $16.857 billion. The figure dwarfs the previous record of $9.2 billion set by the PCS auctions of 1996. Of the 87 original bidders 35 won the 422 licences covering a total of 397.8 million POPs. Only three of the winners were seen as 'true' Designated Entities. The majority of bidding took place in the early rounds, with most bidding completed by the round 60.
Whilst much speculation circulated prior to the auction () about the various operators' bidding strategies most gave nothing away. A number of operators did, however, trade spectrum prior to the auction in attempts to avoid paying what could have been premium prices. The outcome in general was not unexpected, with the major operators picking up the majority of licences. However, one company and one market stood out from the rest. Verizon, bidding as the Cellco partnership won 113 licences and contributed over 52% of the $16.857 billion.
Other major licence winners included AT&T Wireless, bidding through Alaska Native Wireless, and Cingular through Salmon PCS. Both opted to use the Designated Entity route and therefore received bidding credits. VoiceStream was the only leading operator to bid and win licences as itself, although it also used its previous partner Cook Inlet to gain access to restricted markets and bidding credits.
The Bidders
It has already been pointed out that Verizon was the major bid winner, paying $8.781 billion for its 150.682 million POPs. But all of the major operators with the exception of Alltel picked up additional spectrum.
Licence winner Licences Cost $ m Total POPs m $Cost/POP
Verizon (Cellco Pt) 113 8,781 125.3 70.09
AT&T (Alaska Native) 44 2,893 64.2 45.06
Cingular (Salmon PCS) 79 2,349 69.1 33.97
Dobson (DCC PCS) 14 546.1 17.7 30.84
VoiceStream/Cook Inlet 41 989.0 28.9 34.22
Leap Wireless 22 350.0 20.0 17.48
USCC (Black Crow) 17 283.9 6.3 44.74
Sprint PCS (SVC Bidco) 5 281.9 8.3 33.81
Triton PCS (Lafayette) 14 170.3 6.1 27.74
Northcoast Comm 11 112.7 6.3 17.89
Overall 422 16,857.05 397.8 42.38
Source: FCC auction results and Lehman Brothers for non-overlapping POPs
The auction was not labelled as 3G, but the revenues generated for certain markets were certainly comparable to those of some European UMTS auctions. The size of the largest markets in the USA are comparable to European markets. New York was the most keenly contested market and following Cingular's withdrawal from the competition in round 61 the auction crawled to a conclusion. The three 10MHz licences in New York gave access to 18.1 million POPs and generated $5.579 billion (33% of total). This equates to around $110 per POP or $10.33 per MHz per POP. Only one other market came close to this, Atlanta fetched $10.07 per MHz per POP. <<
- Eric - |
