Wednesday, December 5, 2007

Wireless rich get richer

The WSJ this morning had an article summarizing the announced bidders in the forthcoming FCC 700 MHz auctions next month.

  • Bidding: ATT, Cox Communications, Echostar, Frontline Wireless, Google, Leap Wireless, Verizon
  • Not bidding: Comcast, DirecTV, Sprint Nextel, Time Warner Cable [also T-Mobile]
The two largest US carriers are bidding, and the next two are not. The 2004 AT&T-Cingular merger has gone well, while Sprint Nextel has yet to recover from its 2005 merger. (The 2000 joint venture to create Verizon Wireless is long since settled).

Of the remainder:
  • Google is trying to reshape the wireless industry by its bidding, even though the WSJ thinks it has no intention of winning.
  • The relatively small Leap Wireless is seeking to grow its spectrum footprint after fending off the hostile takeover by Metro PCS.
  • My former business associate Tom Evslin has criticized the plans of the highly political Frontline Wireless team, for trying to get its spectrum under the guise of "public safety."
  • Only one of the three major cable TV companies is bidding, which means they’re not worried about the telco quadruple play competing with their triple play offerings.
Even with the potential new entrants and the wide variety of spectrum alternatives, their impact is likely to be at the margins. Instead, it seems likely that the new spectrum will be paid for by the most successful companies, to cement their existing market dominance.

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