700 MHz Auction Could Be Delayed by Martin’s FNPRM
The 700 MHz auction will be pushed into Nov. or Dec. as a result of FCC Chmn. Martin circulating an item that narrows the issues but requires additional public input, Stifel Nicolaus said in an investor’s note late Wed. Many observers had expected the auction to begin earlier. For example, Comr. McDowell said he expected it to be before Halloween. Congress has dictated that the auction begin before Jan. 28, 2008. A source close to the FCC indicated there hasn’t been an officially set date.
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If the service rules are finalized in June then it’s 5 months before Nov., but smaller players have asked for 6 months. “The shorter the period between the time the FCC sets the final bandplan and service rules and begins the auction, the better for large incumbents,” wrote Stifel Nicolaus. Starting the auction later will give smaller players more time between when the auction rules are finalized and the start of the auction to line up financing and to put their bidding strategies together, agreed the source.
Merger discussions, real or imagined, would be put on hold starting in Sept. so companies don’t run afoul of the anti-collusion rules, warned Stifel Nicolaus. The anti- collusion rules prohibit auction participants from discussing bidding strategies. The rules “strictly speaking do not expressly prevent merger discussions,” said Stifel Nicolaus. But most communications lawyers “have developed bright-line rules” discouraging merger discussions once the auction short forms have been filed. “As a practical matter merger talks involving qualified bidders are on ice for roughly four to six months,” wrote Stifel Nicolaus. The anti-collusion rules remain in place until the auction winners make their down payments, it said. The note acknowledges that any of the dates could slip or accelerate so the warning is meant to provide investors with “a framework for assessing the process.” Stifel Nicolaus specifically mentioned rumors of merger discussions between Verizon and Alltel (CD March 6 p4), and AT&T and EchoStar (CD Jan 6/06 p6). -- Heather Forsgren-Weaver
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Creating smaller license areas in the 700 MHz C- and D- blocks “will further the competitive power” of rural wireless, Frontline Wireless told the FCC Thurs. Frontline is the main proponent of the Public Safety Broadband Deployment Plan creating a 10 MHz nationwide E-block to be built for the primary use of first responders. “Creating a nationwide license in the E-block for the shared public safety/commercial network, will provide vital roaming solutions for small carriers, facilitate competitive access to critical broadband spectrum and further the public interest,” wrote Matthew DelNero, Frontline outside counsel, in a letter to the Commission. The smaller licenses in the C- and D-block should be based on either cellular market areas or economic areas, said Frontline.