AT&T buys Aloha's 700MHz

Tired of waiting for the auction, AT&T buys Aloha's spectrum.

From The Street:

"AT&T got a jump on next year's radio wave auction with a $2.5 billion bid for Aloha Partners' 700-megahertz spectrum licenses. In the deal, AT&T would take ownership of former UHF channels 54 and 59, the so-called C block of wireless spectrum Aloha had acquired in the past few years. Aloha owned the largest swath of licenses covering about 80% of the population in the top 100 cities.

From the press release:

"Customer demand for mobile services, including voice, data and video, is continually increasing," said Forrest Miller, group president-corporate strategy and development. "Aloha's spectrum will enable AT&T to efficiently meet this growing demand and help our customers stay connected to their worlds."

From Unstrung:

"AT&T's experience on deploying UMTS at 850 MHz makes 700 MHz a great fit with its existing network," says Gabriel Brown. "In particular, the carrier should be able to source attractive 3G handsets that work at both frequencies."

Brown says the price AT&T has paid for this spectrum is "full but fair." He calculates that, at a price of $2.5 billion for 12 MHz of spectrum covering 196 million people, AT&T has paid roughly $1 per MHz per head."

Google's thoughts on 700MHz

This is a big deal.

From Google Public Policy:

"Too much is at stake for the federal government to let that happen. Late yesterday, we filed a letter urging the FCC to take concrete steps to make sure that regardless of who wins the spectrum at auction, consumers’ interests are best served. We believe that the winning bidders should be required to adhere to enforceable rules that require the adoption of four types of "open" platforms:

• Open applications: consumers should be able to download and utilize any software applications, content, or services they desire;
• Open devices: consumers should be able to utilize a handheld communications device with whatever wireless network they prefer;
• Open services: third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms; and
• Open networks: third parties (like internet service providers) should be able to interconnect at a technically feasible point in a 700 MHz licensee's wireless network.

We believe that adopting these four license conditions collectively will encourage prospective broadband companies to participate in the auction, and be able to bid successfully for the available spectrum. Not only are new entrants more likely to embrace an ethos of openness, but additional forms of competition will emerge from web-based entities, such as software applications providers, content providers, handset makers, and ISPs. And consumers ultimately will come out ahead in that rich and vibrant broadband environment."

From Daily Wireless:

"Martin may be giving a bone to Frontline for 10 Mhz (+12Mhz of public safety spectrum) for a shared public/private partnerships. But let’s be realistic — more than half the valuable real estate is not addressed by this proposal. It enables Verizon to buy into the Upper 700 MHz while leaving the lower 700 Mz band (with 30 MHz) largely unregulated and unrestricted.

What’s going to happen to it?

Some 60 Mhz of 700 MHz will be auctioned off early in 2008. Cellular companies may get the lion’s share, anyway. That’s because the lower 700 MHz band is also home to Qualcomm’s proprietary MediaFLO. It blasts out a 50,000 watt broadcast signal to mobile phones. A 100 mW two-way radio on an adjoining frequency is going to be drown out. It’s no good for two-way communications.

Block “E” (Channel 56) adjoins MediaFLO (on Channel 55). Verizon may pick that up. Block “A” and Block “C”, although they are composed of two, 6 MHz channels, ajoin the powerful broadcast blocks of channel 55 and 56. That makes them less than ideal for two-way communications. Robert Townsend’s Aloha Partners has already picked up most of the spectrum on block “C”, buying up hundreds of regional licenses. What does that leave for effective two-way communications? Block “B”.

Could 2×6 MHz (on Block “B”), using 6 regional licenses to create a nation-wide wireless broadband network, be a competitive threat to Verizon? I don’t think so. It’s a rural play. A 700 MHz urban tower would be swamped. Verizon might get RUS funding to supply “closed” access on that piece of spectrum - with their own mobile television channel on Channel 56."