Part IIa — Who's Who in 700 MHz: the New Entrants

Let’s start with a profile of the new entrants to the 700 MHz auction. Part IIb will profile the potential bidders who were active in the two Lower 700 MHz auctions and the AWS-1 auction.

The Big Guys

I sound a little crazy calling AT&T Mobility Spectrum, LLC, a new entrant, but this AT&T subsidiary technically didn’t exist during previous auctions, although it is essentially Cingular beefed up with AT&T’s Aloha Partners acquisitions from the Lower 700 MHz auctions. It comes to the table holding the most spectrum of any 700 MHz bidder. More detail on possible ATT plans in Part III, but it could range from support of rural telcos with whom it has existing roaming agreements in the A and B Blocks to major challenges for the C Block REAGs or the D Block nationwide license.

Alltel Corporation, the major U.S. cellular company, did extremely well in the PCS auctions, but sat out the AWS-1 and Lower 700 MHz auctions. It’s also a little odd to call Alltel a new entrant, but it’s been a while since it has participated in an auction and it qualifies under the definition of not participating in the run-up auctions to 700 MHz. Look for Alltel to have interests at play in A, B, C, and E Blocks, and I would not rule out the possibility of a try for the D Block nationwide license, although I consider this unlikely.

Licenseco, LLC, is the name under which Frontline is bidding. This is a major D block competitor.

Backline is the name under which Fortress Investments Group is bidding. It brings substantial financial clout to the table and may be a significant C Block actor, although it is unlikely to be a D Block competitor because of an agreement with Frontline.

Chevron USA Inc., the major energy company, automatically becomes a serious competitor because of its financial resources, but I think it will concentrate on Gulf of Mexico CMAs and EAs or the Gulf REAG to support its fields there, much in the way PetroCom License Corporation did in the AWS-1 auction.

Google Airwaves Inc., Google’s bidding entity, singlehandedly changed the nature of the 700 MHz auction by pushing for wireless Carterfone and open, nondiscriminatory wholesale network access conditions. They got the wireless Carterfone condition from the FCC and they insist that they will use an open, nondiscriminatory wholesale network business plan to put together a third broadband pipe. They will definitely be going for the C Block REAGs and possibly some complementary A, B, and E Block spectrum with deep pockets.

More below…

Cable TV and DBS

Cablevision is bidding under the name CSC Spectrum Holdings LLC; they bid as Dolan Family Holdings in the AWS-1 auction and got their heads handed to them by major incumbents who engaged in blocking bidding. They’re back for 700 MHz; expect them to concentrate on the NY CMAs and the NE EA in a strategy paralleling the AWS-1 effort but without the ability of incumbents to identify bids to block. Cable Montana LLC, is a three-play cable TV, WISP, and digital telco based in Montana; look for it to concentrate on acquiring spectrum in its current coverage footprint. Likewise for Columbia Cellular, Inc., the wireless subsidiary of Reserve Telecommunications, a cable TV, WISP, and digital telco in Louisiana. Echostar is back for the 700 MHz auction as Frontier Wireless LLC. Echostar participated in the Wireless DBS consortium with DirectTV in AWS-1 and had the snake-snot beat out of it by the blocking bidding coalition of major incumbents. DirectTV is sitting this auction out, and Echostar isn’t as well capitalized as Wireless DBS was, but it should be a C Block competitor.

Rural Telcos

These thirty-two companies, largest single group of new entrants, consist of rural telephone companies and consortia of rural telephone companies: East Ascension Telephone Company, LLC, FWC Communications, Inc., Mid-Missouri Telephone Company, Sky Com 700 MHZ, LLC, The Ponderosa Telephone Co., Wireless Communications Venture, Copper Valley Wireless, Inc., PVT Networks, Inc., Star Telephone Membership Corporation, Western Iowa Telephone Association, Buggs Island Telephone Cooperative, Citizens Mutual Telephone Cooperative, Cumby Telephone Cooperative, Inc., Medicine Park Telephone Company, Inc., MH Telecom, LLC, Miles Communications Corp, Moore & Liberty Telephone Company, Washington County Rural Telephone Cooperative, Inc, Huxley Communications Corp., Missouri Valley Wireless, LLC, Polar Communications Mutual Aid Corporation, Golden Belt Telephone Association, Inc., MTN3B Consortium, Piedmont Rural Telephone Cooperative, Inc., 585 Consortium, Corn Belt Telephone Company, Inc., Danville Mutual Telephone Company, Eastern Colorado Wireless II, LLC, Mulberry Cooperative Telephone Company, Inc., Choice Phone LLC, PBP Bidco LLC, and Nunn Communications, LLC. Look for these bidders to concentrate on fitting spectrum to their telco footprint, particularly in the B Block CMAs.

WISPs

The next twenty-seven companies are wireless internet service provicers (WISPs) and consortia of WISPs: Aeronet Wireless Broadband Corp., AlasConnect, Inc., Altazip Inc., Aristotle Inc., Bayou Internet, Inc., Blaze Broadband LLC, COLI, Inc., Computer Techniques, Inc., CRT Holdings, Inc., CSConnect Inc., Delmarva Broadband LLC, First Mile Holdings, Inc., Grain Spectrum LLC, Great American Broadband, Inc., JOYTEL WIRELESS COMMUNICATIONS INC, KeyOn Spectrum Holdings, LLC, Kinex Networking Solutions, Inc., Neptuno Media, OACYS Technology, PageData Holdings LLC, Slopeside Internet, Towerstream Corporation, Trans Video Communications, Inc., USA Broadband LLC, Xanadoo 700 MHz DE, LLC, and Zephyr Holdings. Look for these bidders likewise to concentrate on fitting spectrum to their WISP footprint, primarily in the B Block CMAs.

Xittel Telecommunications, Inc., and Part-15.Org are, respectively, a French Canadian WISP and a consortium of License-exempt WISPs, headed by Michael R. Anderson, the organizer of WISPCON. It is difficult to predict the bidding objectives of both. In the case of Xittel it would require a waiver of the foreign ownership prohibition. In the case of Part-15.Org it is difficult to see it raising the capital necessary to be a major bidder in order to turn large swaths of licensed spectrum to unlicensed use.

CLECs

Nine new entrants are traditional competitive local exchange carriers (CLECs): Bascom Long Distance, Inc., Clearcom, Inc., IdeaOne Telecom Group, LLC, PTI Pacifica, Inc., Puerto Rico Telephone Company, Inc., Pulse Mobile LLC, Siskiyou Telephone Company, Surry Telecommunications, Inc., and TCT West, Inc. These companies will be aiming at acquiring wireless footprint for their landline-coverage areas, primarily in the B Block CMAs, although a few may have regional aspirations in the A or E Block EAs. Eight new entrants are WISP subsidiaries of CLECs: AST Telecom, LLC, Broadband Wireless Unlimited, LLC, Cascade Access, LLC., Gold Radio Group, LLC, KerrComm, LLC, Muskrat Wireless, LP, Socket Telecom LLC, Worldcall Inc. Expect the same pattern as above in bidding aspirations.

Twelve new entrants are cellular telcos: AST Telecom, LLC, Broadband Wireless Unlimited, LLC, Cascade Access, LLC., Gold Radio Group, LLC, KerrComm, LLC, Muskrat Wireless, LP, Socket Telecom LLC, Worldcall Inc., , Blue Sky Cell, LLC, Buffalo-Lake Erie Wireless Systems Co., L.L.C., Faithfone Wireless Incorporated, Inland Cellular Telephone Company, King Street Wireless, L.P., Megrim Co., N.E. Colorado Wireless Technologies, Inc., NatTel, LLC, Unified Communications Corporation, LCFR, LLC, and USCC AUCTION 73, LLC. But one is a ringer — USCC Auction 73 LLC is a subsidiary of U.S. Cellular which sat out the AWS and Lower 700 MHz auctions, but which did very well in the PCS auctions. The cellular telcos are mainly regional actors who will concentrate on the B Block CMAs, but U.S. Cellular could emerge as as competitor for C Block REAGs or possibly as a bidder for the nationwide D Block license. LCFR, LLC, is a subsidiary of New Dimensions Wireless; like the other cellular telcos look for it to match current coverage footprint, and perhaps show some regional aspirations in A and B Blocks..

ISPs

Six new entrants are traditional internet service providers (ISPs), looking to establish a wireless footprint in their coverage areas: Bresnan Communications, Inc., East Kentucky Network, LLC, IT&E Overseas, Inc., Terra World Communications, LLC, TerraNovaNet, Inc., USA Choice Internet Services, and Xpressweb Internet Services, Inc. Expect them to concentrate on the B Block CMAs, although Bresnan Communications may have regional aspirations, given the financial backing of William J. Bresnan.

Data Companies

Two companies in the wireless data business are new entrants: Independents Fiber Network, LLC, a Toledo-based fiber optic data carrier, and National Datacast, Inc., a nationwide wireless data broadcasting based in Arlington, VA. Look for Independents Fiber Network to concentrate on its Ohio coverage footprint in the B Block. National Datacast is more difficult to predict, but it’s probably an A and B Block bidder.

Media Companies

Four media companies are new entrants: Cooper Fowler Media Company, which won a full power TV license for Topeka, KS in auction 64; Forum Communications Company, a North Dakota, South Dakota, Wisconsin, and Minnesota newspaper, TV, interactive media, and printing company; Greene Productions, Inc., a TV production company; and The World Company, a Lawrence, Kansas, newspaper. Cooper Fowler and The World Company will probably bid in B Block for their current coverage footprint. Forum Communications will bid in A or B Block for their current coverage footprint, and possibly the Great Lakes REAG in C Block. No predicting what Greene Productions will go for, if it qualifies.

Tech Companies

Nine tech companies are poised as new entrants in 700 MHz. Americas Communications LLC, a radio frequency engineering and software development firm, which engages in wireless networking in Phoenix, will likely concentrate in the A and B Blocks in the SW. AMTS Consortium, a VHF-based Automated Maritime Telecommunications System company, won seven licenses in the AMTS auctions 57 and 61; there’s no telling exactly where they’ll bid, but they are unlikely to be a major actor. Bay Electronics, Inc., is a marine electronics and radio communications firm in Wisconsin, affiliated with Nextel; expect it to concentrate on local CMAs in B Block. BI Solutions is a military and law enforcement technology consulting firm in DC and a possible D Block competitor.
Budget Phone is a national pre-paid phone service and probable A Block competitor. Data-Max Wireless LLC is associated with Wecom, Inc., a northern Arizona-southern Nevada telecoms contractor; look for it to bid to match local coverage area. Day Management Corporation is an Oregon-based radio/TV repair firm and parts wholesaler and retailer with DoD supply contracts; it’s not clear why they are in the auction, athough they may be an extremely longshot D block competitor. GreenFly LLC, a Nebraska-based business intelligence, applications design, and site/tower planning company; expect them to go for local coverage in the B Block. Sonar Radio Corporation is a radio parts and product development firm and, frankly, I don’t see much reason to regard them as a serious competitor. Telesaurus VPC LLC is the 700 MHz bidding entity of a company which, according to its website, “[was] formed to provide long-range location & commu-nication RF bridges, ‘skybridges,’ into vehicles for ITS-specific wireless networks in the US”; they won one license in auction 57 (AMTS (1)) and 77 licenses in auction 39 (Public Coast and LMS). Look for Telesaurus to concentrate on current footprint coverage, probably in the A and B Blocks.

Tribal Government

The Navajo Department of Information Technology, a tribal government office, is a new entrant; expect concentrate on local coverage in B Block.

The Likely Speculators

Eeven new entrants are likely speculators who expect to turn the 700 MHz spectrum over in roughly the same way Aloha Partners did the Lower 700 MHz licenses with AT&T. Expect them to bid opportunistically where the competition is weak or the price soft. They include: BlueBird Telecommunications Ltd., a wireless start-up for the 700 MHz auction by former FCC official B. T. Wade Jr., YoungSu Yoo, and Russell Brown; CloudComm Corporation, a start-up fronted by Thomas J. Marcin, Director of Global Telecommunications at DuPont; Club 42 CM Limited Partnership, as its promotional website proclaims, is “a future wireless company poised to capitalize on niche undervalued spectrum that will undoubtedly be less of an interest to the larger players because it is in small chunks, and hard to stitch into a contiguous region in the upcoming Auction in the 700MHz band. The company expects to purchase spectrum in the ‘B’ band (734 CMA licenses) as well as the ‘A’ and ‘E’ bands at a deep discount to its long term value and then adding further value by building out the spectrum and selling bandwidth to consumers and wholesalers in its footprint. The company will attempt to purchase a nearly contiguous footprint in any region in the United States where the auction prices are soft, guided by the terrain and other economical considerations.” Continuum 700 LLC, is a start-up by executives of Tritel Finance Inc., which operates as a subsidiary of AT&T Mobility Inc. I-700, LLC, is affiliated with the CEO of Anderson Pacific Corporation (APC), a Chicago-based private investment firm providing capital for companies throughout the United States which is heavily invested in cable TV and cellular providers. Landover PCS Holdings, LLC, a network construction and wireless acquisition company. Maxima International LLC is a business advisory and consulting firm that specializes in international trade, financial services and agribusiness policy; why they are applying to bid in this auction escapes me. Small Ventures USA, L.P. is a venture capital and private equity firm founded and managed by William O. Perkins III. Toba Inlet PCS, LLC is affiliated with affiliated with Cedar Grove Investments, a private venture capital firm comprised of former senior executives from leading wireless and internet companies. Vavasi NexGen Inc. is owned by Bellevue, WA-based Indian Connexion, a U.S. company which is, in turn, owned by Vavasi Telegence, an Indian technology company; possible foreign ownership waiver problems here. XPEDIAN.COM, INC., formerly IRT Industies, is a business development and internet management company, affiliated with Commerce Capital Group.

Individuals

Nine individuals are listed as new entrant bidders. Laurence B. Glass is a Laramie, Wyoming, computer consultant. Jack E. Robinson if the CEO of NatTel. David T. Kotchen is affiliated with the mysterious-sounding Dragon Arch, Inc. Thomas K. Kurian won one license in Auction 57 (AMTS), and has been the subject of an unsuccessful license revocation proceeding. No information appears to be available on Rand Garetto, Mitchell Hoffman, Joel D. Jensen, James W. Johnson, and David Miller.

WTF?

The WTF category is reserved for several types of bidders. The first are the black holes about which information is next to impossible to obtain: Dragon Arch, Inc., James Kalanzi Overseas Limited, Morsetone Partners, Wi2, and Spectrum Acquisitions, Inc. The next type is a company which may be a front for American Cellular Corporation or simply a consortium of West Virginia WISPs, AWS Spectrum, LLC; it goes into WTF because I can’t quite determine WTF it is. The last type are entities which I have trouble figuring out WTF they even filed applications, because they stand just about zero chance of success in the auction. In this category is World Network, the bidding entity of World Networking International, which has bid on a NY health care phone service contract but the application was rejected by the FCC. Another bid it made for outfitting the NYC subway system with cellular phone service and wifi was also rejected. World Networking International’s CEO Walter Iwachiw has been an independent candidate for governor and mayor of New York, and was involved in several unsuccessful lawsuits. Likewise the Office of Spectral Ecology, headed by electronic artist Matthew J. Biederman, doesn’t seem to have a prayer of obtaining spectrum in the auction.