KB spectrum

France concludes its spectrum assignment process in the 2.6 GHz band

admin — Thu, 29 Sep 2011 10:45:44 +0000

On 22 September 2011, France assigned 2.6 GHz licenses to the four existing mobile operators Bouygues Telecom, Free Mobile, Orange France and SFR. The French regulator ARCEP relied on a “multi-criteria (sealed bid)” approach.

The bids and resulting awards were as follows:

Bouygues Telecom won a frequency block of 15 MHz paired, for €228,011k
Free Mobile won a frequency block of 20 MHz paired, for €271,000,000.
Orange won a frequency block of 20 MHz paired for €287,118,501.
SFR won a frequency block of 15 MHz paired for €150,000,000.

The total bids exceeded the reserve price of €700 million bringing in a total of €936 million.

Applications are due in December for the 800 MHz spectrum.

ACMA announces digital dividend spectrum auction contractor

admin — Wed, 28 Sep 2011 14:37:31 +0000

From ACMA website (September 27, 2011)

The ACMA has announced that Power Auctions LLC is the successful tenderer for the provision of spectrum auction capability, implementation and related advisory services for the 700MHz and 2.5GHz (digital dividend) spectrum auction, expected to take place in the second half of 2012.

Power Auctions was chosen from a strong and impressively-credentialed international field of auction service providers.

Power Auctions has commenced work with the ACMA to deliver:

a)   a configurable internet-based auction capability that implements the ACMA’s Combinatorial Clock Auction (CCA) rules;
b)   expert advice on the practical implementation of auction rules; and
c)   auction support and training services.

Power Auctions

Power Auctions is a leading international provider of expert auction design advice, auction implementation services and web-based auction software for spectrum auctions and other high-stakes auctions.

Power Auctions has extensive experience in providing auction designs, implementation services and software in the electricity, natural gas, resources and telecommunications sectors. Power Auctions’ lead personnel have worked extensively with overseas spectrum regulators, including the US Federal Communications Commission, Industry Canada and the UK’s Ofcom, and they have been innovators in the CCA design.

The ACMA will hold a Digital Dividend Auction Tune-Up on Friday 4 November 2011. This event will provide potential auction participants with an opportunity to hear about the ACMA’s work on preparing for the auction, including its development of the detailed CCA rules. Anyone interested in attending the tune-up should email majorspectrumallocations@acma.gov.au.

The Digital Dividend Auction Tune-Up will be just one part of the ACMA’s ongoing intensive engagement with potential bidders over the next 12 months. It will be followed in 2012 with a series of workshops and training sessions, as well as consultation around the auction rules.

Greece Auction Update

admin — Mon, 22 Aug 2011 18:12:54 +0000

Terms of Spectrum Auction in Greece Rankle Operators

By KEVIN J. O’BRIEN

Published: August 14, 2011

BERLIN — This November, the Greek government hopes to raise as much as €300 million by auctioning some of the best parts of its broadcast spectrum to three mobile network operators. Proceeds from the sale would help Greece weather its financial crisis.

But Greece, despite its grave fiscal problems, is by no means acting like a distressed seller. The country is planning to sell 14 units of prime 900-megahertz spectrum. At current prices, a block of 10 megahertz could cost as much as €46.6 million, or $66.2 million. One operator, Wind Hellas, says that is twice as much as other European sellers are asking in similar sales.

“The approach used to set the price for the renewal of mobile spectrum is driven solely by short-term revenue gains and disregards the need for Greece to create a positive investment climate,” Nassos Zarkalis, the chief executive of Wind, the No. 3 operator, said after the government set the auction’s terms in late July. “This sends the worst signal possible to international investors.”

The price demands are particularly galling to Wind, whose owners, a group of five U.S and British investment funds, recently paid €420 million to acquire the company in December, the largest single investment by a foreign company in Greece so far.

A Greek government official, during an interview, disputed Mr. Zarkalis’s claim that the auction had been designed to siphon as much money as possible from the operators, which besides Wind include the market leader, Cosmote, a unit of the former monopoly, O.T.E., that is 40 percent owned by Deutsche Telekom; and Vodafone Greece, the No. 2 operator.

The auction has been discussed and planned for more than a year and predates the country’s financial crisis, said the official, a senior administrator at the Hellenic Telecommunications and Post Commission, the regulator holding the auction. He did not want to be identified, citing his agency’s policy. The auction’s goal, the official said, was to level the playing field in Greece among the three operators going forward as they introduce faster third- and fourth-generation mobile services.

Vodafone and Wind already hold licenses for 900-megahertz spectrum, and Cosmote uses the 1.8-gigahertz band. The higher frequency, however, requires Cosmote to operate three times as many cellphone base stations in the country to provide the same coverage its rivals can.

Under the government’s plan, Vodafone and Wind, whose licenses for 900-megahertz spectrum expire next year, would have to give up some of that prime spectrum to Cosmote so that the three operators would have roughly equal amounts as they face the future.

In addition, all three will be required to share cellphone base stations in the future, a concession to a public outcry over the proliferation of signal masts around Greece.

“We did extensive benchmarking, and our prices are in line with what is happening elsewhere,” the regulatory official said. If the goal had been to maximize revenue for the Greek government, the official said, the regulator would have simply put all of the spectrum up for bid in an open auction, which would drive up the prices.

Gerasimos Gerolymatos, an analyst in Athens at International Data Corp., estimated that the Greek government’s asking price for spectrum was two to three times the prices for comparable spectrum elsewhere in Europe. The steep demands are coming at a time when the revenues of Greek mobile network operators have fallen an average of 20 percent amid the economic downturn, he said.

The operators feel caught in a bind, Mr. Gerolymatos said, being asked to pay more for spectrum when their businesses are weaker than usual. Press officers for Vodafone and for Deutsche Telekom, the biggest shareholder in Cosmote, declined to comment.

“Their primary reason for opposing the auction and its prices are the difficult economic circumstances of the moment,” Mr. Gerolymatos said. “Spectrum is a very important company asset, and mobile operators cannot leave this unattended despite the high price.”

Greece is one of Europe’s smaller telecommunications markets, with 12.3 million mobile users and 2.3 million broadband subscribers, according to the International Telecommunications Union, an industry standards organization based in Geneva. The country used to have a fourth mobile network operator, Q-Telecom, but that company amassed a €25 million debt before being bought in 2007 by the former owners of Wind Hellas for €350 million.

In mobile phones, the market is dominated by Cosmote, the wireless arm of the former fixed-line monopoly, O.T.E. In the early 1990s, the government sold Cosmote’s new competitors, Vodafone and Wind, the bulk of Greece’s best spectrum. Cosmote entered Greece’s wireless market five years later but leapfrogged the competition with backing from O.T.E. and by acquiring a prominent retailer, Germanos Group, in 2006.

Now, as Greece’s three operators introduce 3G and services using Long Term Evolution, or LTE, technology, the government wants to level the playing field.

But favoring Cosmote this time is proving controversial because Cosmote, which controls roughly 50 percent of the market, is still partly state-owned, with the Greek government owning 10 percent of its parent, O.T.E.

Vodafone has a roughly 23 percent market share in Greece and Wind about 19 percent, with service resellers making up the other 8 percent.

Dimitris Hatzinikolaou, an associate professor of economics at the University of Ioannina, in northwest Greece, said public suspicion surrounded the sale of state assets amid the economic crisis. That also applies to the spectrum auction.

But Mr. Hatzinikolaou said most Greek voters worried their government might end up undercharging, not charging too much.

“I am all for privatization for reasons of economic efficiency, competition and so forth,” Mr. Hatzinikolaou said. “But I fear that the prices being offered are way below their actual values. People in Greece are very unhappy with these sales.”

Congressional Budget Office Releases Cost Estimate for FCC Incentive Auctions

admin — Fri, 22 Jul 2011 19:30:55 +0000

On July 20, 2011, CBO released a cost estimate for the S.911 Public Safety Spectrum and Wireless Innovation Act. According to the report, to implement incentive auctions, the bill would:

Authorize the FCC to spend auction receipts to pay firms that voluntarily relinquish their spectrum;
Appropriate up to $1 billion from the auction receipts to create an Incentive Relocation Fund administered by the NTIA. The fund would be used to pay television broadcasters who do not relinquish their licenses for costs the FCC would impose to change their channel assignment as part of the process of clearing spectrum for non-broadcast services. The fund also wold cover certain expenses incurred by cable operators and other distributors of television programming.
Allow the FCC to spend auction receipts to compensate television broadcasters who do not relinquish their license for any modifications made by the FCC to quality of scope and their coverage as a result of efforts to clear spectrum for non-broadcast services; and
All the FCC to make some television broadcast frequencies available for unlicensed use of the amount of spectrum awarded through competitive auctions is at least 84 MHz.
Increase discretionary spending by $43 million over the 2012-2016 period.
Would reduce net direct spending by $6.5 billion over the 2012-2021 period. The projected savings reflect an estimated increase in offsetting receipts from FCC auctions of $24.5 billion and an increase in direct spending of $18 billion.

CBO estimates that the spectrum is worth approximately 70 cents per MHz per person, lower than the weighted average of 80 cents per MHz per person for spectrum auctioned between 2001 and 2009.

The CBO cost estimate can be downloaded here.

Peru is planning an auction of paired spectrum at 1700 MHz and 2100 MHz

admin — Tue, 19 Jul 2011 18:05:58 +0000

Peru’s state agency for promoting private investment, ProInversión, has announced that it is starting an auction process for two blocks of spectrum in the 1700 MHz and 2100MHz bands. The spectrum is intended for telecommunications services and will last 20 years, with possibility of renewal.

The main proposal is to increase broadband, since these bands in were identified by The International Telecommunication Union for use in 4G mobile services.

The concession contracts include coverage and spectrum use goals and obligations, including free Internet service to educational institutions.

The two paired blocks of spectrum in the auction are 1710 MHz – 1730 MHz and 2110MHz – 2130 MHz (Block A); and 1730 MHz – 1750 MHz and 2130 MHz – 2150 MHz (Block B). The C Block (1750 MHz – 1770 MHz and 2150 MHz – 2170 MHz) will not be auctioned at this time.

Broadcasters want MORE in Italy

admin — Tue, 14 Jun 2011 13:48:44 +0000

I just read an interesting article written by Chiara Remondini regarding a plan in Italy to auction 800 MHz frequencies hoping to raise $3.5 billion. The idea is for broadcasters to vacate spectrum in time for the sale (planned for September 2011) and receive 10% of the sale proceeds for their agreement to vacate. Operators Telecom Italia SpA (TIT) and Vodafone Group Ilc (VOD) need bandwidth to meet surging data demand from smartphones to surf the web and download or stream video. The Radio Television Association in Italy apparently does not think the 10% allocation of proceeds is fair and claims that the government would need to double its offer to potentially convince more than 100 broadcasters to vacate their spectrum. It is difficult to imagine broadcasters being willing to accept 10% or even 20% of some unknown number. Italy might be wise to consider an incentive auction where broadcasters could participate in a descending auction identifying the amount they would be willing to be paid to vacate the spectrum. The ascending auction would follow where wireless providers would participate in a multiple round ascending auction. For more information on the mechanics of a broadcast license incentive auctions click here.

France launches LTE spectrum auction

admin — Fri, 03 Jun 2011 17:28:38 +0000

Written by Benny Har-Even

The French auction for LTE spectrum is now imminent after French digital economy minister Éric Besson signed a decree launching the tender for operators to submit their bids, The process will begin in the coming days, French newspaper Le Monde reported, once the announcement is published in an official gazette. Operators will have until September to submit their bids.

On 31 May, French telecom regulator Arcep submitted proposals to the government for spectrum distribution, listing national coverage, increased competition and maximising value from the auctions, as the priorities.

The higher-end 2.6GHz spectrum will be cut into four lots and awarded in October, while the desirable 800MHz band will be divided into 14 lots, and won’t be awarded until early 2012.

Operators will need deep pockets to place their bids, as in mid-May the French government increased its reserve bid level for the auctions overall from €2bn to €2.5bn

The requirements on the operators include the obligation to cover 98 per cent of the population within 12 years. The requirements move up to 99.6 per cent within 15 years for those with 800MHz spectrum, while for those with 2.6GHz spectrum the figure is 75 per cent of the population within 15 years.

Besson said that there should be a focus on coverage in rural areas to bridge the digital divide, and the announcement that mobile operators would be able to buy two blocks of 15MHz spectrum in the 800MHz range, rather than the usual 10MHz blocks, means that rural France could well see fast LTE speeds.

Why broadcasters don’t like Incentive Auctions

Karen Wrege — Thu, 26 May 2011 19:42:18 +0000

In my short presentation at the Rayburn House Office Building earlier this week where I was the only non-economist on the panel discussing incentive auctions it occurred to me why broadcasters are against incentive auctions. How would you like it if over 100 economists told you that your use of the spectrum (the holy grail of communications) is “low valued” when compared to wireless. While this is probably true, the use of economic terms like “low valued” and “best use” can be fighting words when you’re talking about someone’s life blood or the business they’ve given their heart and soul for the past 50 years.

If the auctions are voluntary which everyone (including the economists, politicians, wireless operators and broadcasters) agree they should be, why will there be “… a train wreck that we will not be able to come back from” as purported by Charles Glove, Chairman and Chief Executive of Telos Digital Television Networks, in the New York Times last month? It really is just a lot of talk if you ask me. I appreciate that the broadcasters don’t want to move to a different frequency. After all, they just moved in 2008 with the digital transition. This time the move will be cost-free since the auction proceeds will be used to relocate spectrum users. Moving frequencies is really nothing new and doesn’t require Congressional approval and the broadcasters will keep their callsign. The FCC has been relocating licensees for the last 50 years in the name of effective spectrum management. Furthermore, if broadcasters decide to participate in the auction to monetize their over-the-air spectrum, it’s not as if they’re out of business. They simply offer their programming on cable networks, through satellite providers and wireless operators.

I’m back to the realization that people and businesses made up of people just don’t want to change. Couple that with everyone saying in the “incentive auction elevator speech” that all the FCC is trying to do is shift spectrum from a “low value” to ”higher value” use and you have the broadcasters and their powerful lobby ready for a fight. It feels like nothing more than sibling rivalry. Broadcasters would prefer that Congress or the FCC for that matter just let them use the spectrum for wireless. Their one to many communications protocol is more efficient than wireless one-to-one protocol they claim. The problem is that no one is in the mood to give up the consumer surplus to the broadcasters.

It just makes sense for Congress to give the FCC the authority to conduct incentive auctions and let the broadcasters decide whether they want to participate or not. I remember not too long ago back in 1993 when the wireless operators didn’t want auctions. How far we’ve come since then.

Spectrum Incentive Auctions: the Nuts, Bolts and Economics

admin — Thu, 12 May 2011 19:44:32 +0000

The FCC and the Administration want to make 120 MHz of spectrum currently used for broadcast available for other, presumably higher-value, wireless uses. Policymakers are proposing using voluntary auctions to encourage broadcasters to sell their licenses, but questions remain on how these incentive auctions would work in practice. Discussion at “Spectrum Incentive Auctions: the Nuts, Bolts and Economics,” hosted by the Technology Policy Institute, will focus on the economics of auctions and how spectrum incentive auctions should be structured to provide the most efficient outcomes for stakeholders. Discussants will also answer questions submitted by attendees. Questions can be submitted anonymously on the TPI website.

The event will take place:

12:00pm – 2:00pm
May 23, 2011
Room 2322
Rayburn House Office Building
Washington DC

Confirmed panelists include:

Lawrence Ausubel, Professor of Economics, University of Maryland
Peter Cramton, Professor of Economics, University of Maryland
Evan Kwerel, Senior Economic Advisor, Federal Communications Commission
Karen Wrege, Senior Auction Consultant, Power Auctions LLC

Lunch will be served. Details on speakers will be announced soon. Registration can be performed on the TPI website and questions should be directed to Ashley Creel atacreel@techpolicyinstitute.org. Members of the press should contact Amy Smorodin at asmorodin@techpolicyinstitute.org.

The Technology Policy Institute

The Technology Policy Institute is a non-profit research and educational organization that focuses on the economics of innovation, technological change, and related regulation in the United States and around the world. More information is available at http://www.techpolicyinstitute.org/.

Argentina plans auction in the 1900 MHz and 800 MHz bands

admin — Thu, 12 May 2011 15:58:00 +0000

The government of Argentina plans to auction spectrum in the1890-1985 MHz blocks, according to a Dow Jones News Wire story in the Wall Street Journal.

Bidding rules are expected to become available as early as next week.

The auction should take place this year, Dow Jones reported five megahertz and 10 megahertz blocks will be available in the 1900 MHz bands, as well as 7.5 megahertz block in the 800 MHz band. Minimum prices depend on the geographic area and range from $600,000 to $6 million.