Auction 86 — All Over, But Rural America is Shafted Again.

Auction 86, the BRS auction, is over and all bids have cleared. There were no defaults. The auction netted a mere $19,426,600, rather less than most industry analysts speculated before the auction. However, it must be remembered that the BTA licenses up for auction were heavily encumbered with the need for interference agreements with P35 license holders and resembled more “white space” swiss-cheese spectrum than real BTA licenses.

The bidding ended after 24 rounds in four days on Oct. 30. However, it took until now to be certain that no winning bidder was going to default.

As expected, Clearwire took the overwhelming majority of licenses at offer, 42 of them for $11,177,000. Those licenses represent a deepening of Clearwire’s spectrum pool for national footprint and, in a few cases, even expanded it. Utopian Wireless and DigitalBridge Spectrum, companies which are concentrating on providing WiMax in areas where Clearwire is not deploying, acquired 4 and 2 licenses, respectively. As expected, Stratos Offshore Services and Trident Global Communications shared the three new Gulf of Mexico licenses, 2 and 1 respectively, for a little over $2.5 million, the third most expensive acquisitions. Vermont Telephone Company acquired three licenses in its current footprint for the second highest expenditure in the auction, $2.8 million.

The other successful bidders included James E. McCotter (3 licenses), Ztark Communications (2), Cellular South (1), and Twin Lakes Telephone Cooperative (1) — all reinforced existing license footprint. Broadcast Cable Bloomington, Chevron USA, Emery Telecom-Wireless, Gateway Telecom, N-1 Communications and Pulse Mobile all walked away with no wins.

More interesting still, 17 licenses failed to clear. These licenses were overwhelmingly in rural areas, continuing the pattern established by Clearwire and its cableco and telco partners of redlining a substantial portion of rural America for broadband service generally and WiMax in particular. If this pattern had been allowed to prevail in rural electrification, much of the West and the South would still not have electricity. It makes you wonder where FDR is when you really need him.

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3 Comments

  1. Stearns says:

    As a casual, non-industry reader, I don’t know what failing to clear means. Can you tell us? Also, why would Chevron be bidding?

  2. John Schwartz says:

    Those licenses received no bids and thus were not sold to anyone

  3. John Schwartz says:

    And probably Chevron bid because it sought spectrum in the Gulf of Mexico to use in connection with offshore oil rigs.

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