To begin our analysis of strategic options for major actors in Auction 73, 700 MHz Band, it is useful to look at the footprints established by many of those actors in two previous Lower 700 MHz auctions (Auction 44 and 49) and the AWS-1 auction (Auction 66):*
Cellular Market Areas (CMA) Map for Auction 44
Economic Area Groupings (EAG) Map for Auction 44
Cellular Market Areas (CMA) Map for Auction 49
Economic Area Groupings (EAG) Map for Auction 49
Cellular Market Areas (CMA) Map for Auction 66
Economic Areas (EA) Map for Auction 66
Regional Economic Area Groupings (REAG) Map for Auction 66
The Classic Pattern
The classic pattern for an RTC and for most CLECs and WISPs in these auctions is that of Agri-Valley: expansion through Auctions 44, 49 and 66 to attempt to match its landline footprint with CMA acquisitions. In Auction 66 Agri-Valley went for and failed to obtained consolidation in Flint, Lansing, Saginaw, Muskegon, Gogebic, Alger, Cheboygan, Roscommon, and Cass. Expect Agri-Valley to continue this pattern in Auction 73. The same holds true for Whidbey Telephone in Maine in Auction 49, for Hemingford Cooperative in Nebraska, Wyoming, and Colorado in Auction 66, Bluegrass Cellular In western Kentucky in Auction 44, Union Telephone in Wyoming and Colorado in Auction 44 and 66, East Kentucky Network in eastern Kentucky in Auction 44, Fidelity Communications in Missouri in Auction 66, KTC AWS in South Dakota in Auction 66, Public Service Wireless in Georgia in Auction 66, Redwood County Telephone Company in Wisconsin and Minnesota in Auction 44, 44, LL License Holdings in Iowa, North Dakota, South Dakota, Minnesota, and Nebraska in Auction 66, Grand River Communications in Iowa in Auction 44, and Iowa Telecommunications in Iowa in Auction 66. This pattern will continue to hold in Auction 73, and will hold for the vast majority of new entrants in Auction 73: their action will be in the CMAs and to a much lesser extent in the EAs.
More below…
The Mid-Range Competitors
While the past isn’t always a predictor of the future, in spectrum auctions it is generally a pretty sound bet that repeat customers will attempt to acquire coverage that they failed to acquire in previous auctions. This is a particularly useful insight to apply to the mid-range competitors seeking to establish and enlarge on a regional footprint.
Cavalier Wireless is just such a mid-range competitor. A look at what it sought and didn’t get in Auction 66 gives a good idea of what it will seek in Auction 73.
Among the EAs Cavalier unsuccessfully bid on in Auction 66 were AW-BEA005-C (Albany-Schenectady-Troy NY), AW-BEA017-C (Roanoke VA-NC-WV), AW-BEA021-B (Greenville NC), AW-BEA021-C (Greenville NC), AW-BEA022-C (Fayetteville NC), AW-BEA024-B (Columbia SC), AW-BEA024-C (Columbia SC), AW-BEA025-C (Wilmington NC-SC), AW-BEA026-B (Charleston-North Charleston SC), AW-BEA027-C (Augusta-Aiken GA-SC), AW-BEA028-B (Savannah GA-SC), AW-BEA028-C (Savannah GA-SC), AW-BEA029-C (Jacksonville FL-GA), AW-BEA032-B (Fort Myers-Cape Coral FL), AW-BEA032-C (Fort Myers-Cape Coral FL), AW-BEA033-B (Sarasota-Bradenton FL), AW-BEA033-C (Sarasota-Bradenton FL), AW-BEA034-C (Tampa-St. Petersburg FL), AW-BEA035-B (Tallahassee FL-GA), AW-BEA036-C (Dothan AL-FL-GA), AW-BEA037-C (Albany GA), AW-BEA068-B (Champaign-Urbana IL), AW-BEA071-C (Nashville TN-KY), AW-BEA074-B (Huntsville AL-TN), AW-BEA074-C (Huntsville AL-TN), AW-BEA075-B (Tupelo MS-AL-TN), AW-BEA076-B (Greenville MS), AW-BEA077-B (Jackson MS-AL-LA), AW-BEA077-C (Jackson MS-AL-LA), AW-BEA079-C (Montgomery AL), AW-BEA080-B (Mobile AL), AW-BEA081-B (Pensacola FL), AW-BEA081-C (Pensacola FL), AW-BEA082-B (Biloxi-Gulfport-Pascagoula MS), AW-BEA082-C (Biloxi-Gulfport-Pascagoula MS), AW-BEA084-B (Baton Rouge LA-MS), AW-BEA085-B (Lafayette LA), AW-BEA086-B (Lake Charles LA), AW-BEA087-B (Beaumont-Port Arthur TX), AW-BEA088-B (Shreveport-Bossier City LA-AR), AW-BEA088-C (Shreveport-Bossier City LA-AR), AW-BEA089-B (Monroe LA), AW-BEA089-C (Monroe LA), AW-BEA090-B (Little Rock AR), AW-BEA090-C (Little Rock AR), AW-BEA094-B (Springfield MO), AW-BEA094-C (Springfield MO), AW-BEA096-C (St. Louis MO-IL), AW-BEA098-B (Columbia MO), AW-BEA123-B (Topeka KS), AW-BEA124-B (Tulsa OK-KS), AW-BEA125-C (Oklahoma City OK), AW-BEA127-C (Dallas-Fort Worth TX-AR-OK), AW-BEA130-B (Austin-San Marcos TX), AW-BEA130-C (Austin-San Marcos TX), AW-BEA131-B (Houston-Galveston-Brazoria TX), AW-BEA132-B (Corpus Christi TX), AW-BEA132-C (Corpus Christi TX), AW-BEA133-C (McAllen-Edinburg-Mission TX), AW-BEA134-B (San Antonio TX), AW-BEA134-C (San Antonio TX), AW-BEA136-B (Hobbs NM-TX), AW-BEA137-B (Lubbock TX), AW-BEA138-B (Amarillo TX-NM), AW-BEA138-C (Amarillo TX-NM), AW-BEA139-B (Santa Fe NM), AW-BEA139-C (Santa Fe NM), AW-BEA140-B (Pueblo CO-NM), AW-BEA140-C (Pueblo CO-NM), AW-BEA143-B (Casper WY-ID-UT), AW-BEA145-B (Great Falls MT), AW-BEA145-C (Great Falls MT), AW-BEA146-B (Missoula MT), AW-BEA146-C (Missoula MT), AW-BEA147-B (Spokane WA-ID), AW-BEA147-C (Spokane WA-ID), AW-BEA148-B (Idaho Falls ID-WY), AW-BEA148-C (Idaho Falls ID-WY), AW-BEA149-B (Twin Falls ID), AW-BEA150-B (Boise City ID-OR), AW-BEA150-C (Boise City ID-OR), AW-BEA151-B (Reno NV-CA), AW-BEA152-B (Salt Lake City-Ogden UT-ID), AW-BEA154-B (Flagstaff AZ-UT), AW-BEA154-C (Flagstaff AZ-UT), AW-BEA155-B (Farmington NM-CO), AW-BEA155-C (Farmington NM-CO), AW-BEA156-B (Albuquerque NM-AZ), AW-BEA157-B (El Paso TX-NM), AW-BEA157-C (El Paso TX-NM), AW-BEA158-B (Phoenix-Mesa AZ-NM), AW-BEA158-C (Phoenix-Mesa AZ-NM), AW-BEA159-B (Tucson AZ), AW-BEA159-C (Tucson AZ), AW-BEA161-B (San Diego CA), AW-BEA162-B (Fresno CA), AW-BEA168-B (Pendleton OR-WA), AW-BEA168-C (Pendleton OR-WA), AW-BEA169-B (Richland-Kennewick-Pasco WA), AW-BEA169-C (Richland-Kennewick-Pasco WA), AW-BEA172-B (Honolulu HI), and AW-BEA172-C (Honolulu HI).
In the CMAs Cavalier unsuccessfully bid on AW-CMA025-A (Buffalo NY) AW-CMA028-A (Indianapolis IN), AW-CMA029-A (New Orleans LA), AW-CMA031-A (Columbus OH), AW-CMA033-A (San Antonio TX), AW-CMA035-A (Sacramento CA), AW-CMA037-A (Louisville KY-IN), AW-CMA046-A (Nashville-Davidson TN), AW-CMA050-A (Honolulu HI), AW-CMA051-A (Jacksonville FL), AW-CMA055-A (Worchester-Leominster MA), AW-CMA072-A (West Palm Beach-Boca Raton FL), AW-CMA073-A (Oxnard-Simi Valley-Ventura CA), AW-CMA074-A (Fresno CA), AW-CMA077-A (Tucson AZ), AW-CMA079-A (Knoxville TN), AW-CMA080-A (Baton Rouge LA), AW-CMA081-A (El Paso TX), AW-CMA085-A (Johnson City-Kingsport TN-VA), AW-CMA086-A (Albuquerque NM), AW-CMA088-A (Chattanooga TN-GA), AW-CMA092-A (Little Rock AR), AW-CMA097-A (Bakersfield CA), AW-CMA100-A (Shreveport LA), AW-CMA114-A (Lakeland-Winter Haven FL), AW-CMA120-A (Huntsville AL), AW-CMA123-A (Santa Rosa-Petaluma CA), AW-CMA124-A (Santa Barbara CA), AW-CMA126-A (Salinas-Seaside-Monterey CA), AW-CMA134-A (Atlantic City NJ), AW-CMA137-A (Melbourne-Titusville FL), AW-CMA146-A (Daytona Beach FL), AW-CMA164-A (Fort Myers FL), AW-CMA167-A (Sarasota FL), AW-CMA168-A (Tallahassee FL), AW-CMA171-A (Reno NV), AW-CMA173-A (Biloxi-Gulfport MS), AW-CMA183-A (Asheville NC), AW-CMA188-A (Amarillo TX), AW-CMA190-A (Boise City ID), AW-CMA191-A (Yakima, WA), AW-CMA192-A (Gainesville FL), AW-CMA208-A (Fort Pierce FL), AW-CMA211-A (Bradenton FL), AW-CMA219-A (Monroe LA), AW-CMA222-A (Tuscaloosa AL), AW-CMA242-A (Olympia WA), AW-CMA245-A (Ocala FL), AW-CMA252-A (Pascagoula MS), AW-CMA340-A (San Luis Obispo CA), AW-CMA360-A (Collier FL), AW-CMA361-A (Glades FL), AW-CMA362-A (Hardee FL), AW-CMA363-A (Citrus FL), AW-CMA364-A (Putnam FL), AW-CMA380-A (Bleckley GA), AW-CMA381-A (Toombs GA), AW-CMA384-A (Worth GA), AW-CMA730-A (St. Thomas VI), and AW-CMA731-A (St. Croix VI).
In the REAGs Cavalier unsuccessfully bid on AW-REA005-D (Central), AW-REA008-D (Hawaii), AW-REA008-E (Hawaii), and AW-REA008-F (Hawaii). Cavalier’s successful acquisitions, as the maps show, match the general pattern of the unsuccessful bids. The picture is clear. Cavalier was seeking to establish a supra-regional footprint from the South across to the West, up to the Northwest and over to Hawaii, with a little penetration of selected areas in the Northeast, but no real penetration of the Midwest or Central Plains states. There is little reason to think that Cavalier has abandoned this business model for Auction 73, although Cavalier could easily become a major C Block contender. There is a slight chance that Cavalier will go for the D Block national license, but I wouldn’t bet the farm on it. I debated putting Cavalier among the big guys, but I just don’t think it carries the weight that Verizon, ATT, and Google among others are likely to carry in this auction.
Cellular South is another mid-range competitor. In Auction 66 in the EAs Cellular South unsuccessfully bid on AW-BEA073-C (Memphis TN-AR-MS-KY), AW-BEA079-C (Montgomery AL), and AW-BEA081-C (Pensacola FL). In the CMAs unsuccessfully bid on AW-CMA036-A (Memphis TN-AR-MS), AW-CMA041-A (Birmingham AL), AW-CMA046-A (Nashville-Davidson TN), AW-CMA083-A (Mobile AL), AW-CMA106-A (Jackson MS), AW-CMA120-A (Huntsville AL), AW-CMA153-A (Columbus GA-AL), AW-CMA222-A (Tuscaloosa AL), AW-CMA226-A (Florence AL), AW-CMA249-A (Anniston AL), AW-CMA272-A (Gadsden AL), AW-CMA283-A (Panama City FL), AW-CMA307-A (Franklin AL), AW-CMA309-A (Lamar AL), AW-CMA310-A (Bibb AL), AW-CMA312-A (Washington AL), AW-CMA313-A (Butler AL), and AW-CMA314-A (Lee AL). Its successful bids fit the same pattern: a regional cellular provider consolidating footprint. In many respects it fits the pattern of RTCs, CLECs, and WISPs cited above. However, it was a partmner in Licenseco LLC, Frontline’s now-folded contestant for the national D Block license. I expect Cellular South to remain a strong regional competitor for southern EAs and CMAs, but the possibility that it may step up and try to fill Frontline’s shoes cannot be ruled out, and therefore I include it among the significant mid-range competitors.
Cincinnati Bell unsuccessfully bid in Auction 66 in the EAs on AW-BEA021-B (Greenville NC), AW-BEA047-B (Lexington KY-TN-VA-WV), AW-BEA047-C (Lexington KY-TN-VA-WV), AW-BEA049-B (Cincinnati-Hamilton OH-KY-IN), AW-BEA049-C (Cincinnati-Hamilton OH-KY-IN), AW-BEA050-B (Dayton-Springfield OH), AW-BEA051-B (Columbus OH), AW-BEA051-C (Columbus OH), AW-BEA070-C (Louisville KY-IN), and AW-BEA072-B (Paducah KY-IL). Cincinnati Bell unsuccessfully bid on AW-CMA087-A (Canton OH), AW-CMA130-A (Erie PA), AW-CMA148-A (Salem OR), AW-CMA196-A (Champaign-Urbana-Rantoul IL), AW-CMA223-A (Elkhart-Goshen IN), AW-CMA373-A (Chattooga GA), and AW-CMA450-A (Mason KY). Like Cellular South, Cincinnati Bell closely corresponds to the consolidation of regional footprint pattern, as the map of successful acquisitions confirms. However, there is some indication that Cincinnati Bell has begun to aspire to expansion of that footprint and in areas which are not directly contiguous to its current service area. I don’t expect Cincinnati Bell to become a major C or D Block actor, but it could provide interesting competition in the A, B and E Blocks.
Coming… Part IIIb, More Mid-Range Actors
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* – The maps were prepared by Jamie Eickerman under my supervision; I am deeply grateful for her help.