Broadband Developments

October 28, 2008

White Space In Contrast - It’s A No Brainer

Filed under: BroadDev, Networking, UC, Web 2.0 — Tags: , , , — Anton Wahlman @ 12:59 pm

The white space debate, for all its technical complexity, is otherwise
very simple to judge.  So many frequencies remain unused or
dramatically underutilized – either in space, or in time, or both.  A
cognitive radio should therefore be able to fill in these blanks with
useful stuff, such as Internet access akin to WiFi, WiMax, HSPA, EV-DO
and LTE.

Most of these frequencies are between 150 and 850 MHz.  This makes
them particularly complementary to most of the cellular frequencies,
who start at 850 MHz in the US (soon 700 MHz) and at 450 MHz in some
other European countries (although mostly 900 MHz).  Most other
cellular frequencies reside between 1700 and 2200 MHz, while WiFi and
most mobile WiMax launches are between 2300 and 2700 MHz.

These lower frequencies are used for things such as old-fashioned
broadcast television and military applications.  Some of those
military applications have limited geographic scope, and many of the
allocated television channels are also not used in most areas.  Those
are cases where this spectrum ought to be privatized outright, under
any circumstance.  At a minimum, this spectrum can be repurposed for
as long as no interference is proven.  Basically, there is no downside
to trying.  In this respect, the advocates of white space use
legalization are 100% correct.

However, the white space argument is even stronger and ought to be
taken at least one full step further.  Over 90% of American households
have cable TV, satellite TV, or some other form of non-terrestrial
broadcast TV such as wired TV from a telco (Verizon FiOS, AT&T U-Verse
etc.).  This percentage has also been increasing.  With only a few
remaining households taking up this valuable real estate in the air,
it’s beginning to look like the “bridge to nowhere.”  Basically, we
are foregoing an untold billion dollars (perhaps trillions) in
consumer welfare just so that a tiny single-digit percentage of
households can get to watch a handful of channels without paying for
TV from cable/satellite/telco.  This is a shameful exploitation of
government property, at a huge expense.

The solution is of course very simple:  The government a long time ago
should have told the TV broadcasters that the game is up.  No more any
free ride.  No more exploitation at the public trough.  This is
valuable real estate, which, just like almost all government property,
should be sold to the highest bidders as soon as possible.  Just this
February, the sale of a few tiny thin slices of the 700 MHz spectrum
fetched $20 billion.  Imagine what the spectrum all the way down to
below 200 MHz would fetch?

This idea isn’t new; I have been proposing it for years.  The rebuttal
has always been that this is somehow politically impossible.  I have
never understood this argument, because we talking about less than 10%
of households who are exploiting the other 90%+.  Any politician worth
his salt ought to be able to explain that the only thing standing in
the way of vastly more available, capable and lower-priced wireless
broadband are a bunch of people who refuse to get
cable/satellite/telco TV, just like the rest of us.

Some say those 10% are unusually poor, and need access to free TV.  To
this I say: If they are that poor, they are probably watching too much
TV, and working too few hours.  Daytime TV is also a bad influence,
culturally.  Besides, those same people who insist on watching free
TV, are also the same people who smoke and drink for a lot more money
than it would cost them to pay for the same kind of
cable/satellite/telco TV subscription that the rest of us do.  People
shouldn’t have to run around and pay for each other’s entertainment
habits.  What’s next – government-subsidized movie tickets, opera
passes or ballpark games?  Wait – don’t give the new Congress any
ideas…

July 25, 2008

Complete BullShit - AT&T (Pot) Calling Out Sprint (Kettle) on Clearwire Acquisition

Filed under: BroadDev — Tags: , , , , , — John Furrier @ 2:24 pm

I saw this on CNNMoney today. AT&T is asking federal regulators to provide a stricter review of Sprint’s acquisition of Clearwire.

Sprint and Clearwire announced their intention to merge last month, saying the venture would facilitate a national wireless Internet network that would operate on a block of airwaves partly reserved for schools, cities and other nonprofits.

Indeed, late last year AT&T sold Clearwire the rights to some of the spectrum Clearwire will use for its WiMAX network. The issue for AT&T is fairness. When it acquired Dobson Communications last year, the Federal Communications Commission’s (FCC) evaluation considered airwaves that AT&T bought rights to, but which won’t be available until next February.

AT&T charges that when it comes to evaluating the Sprint-Clearwire deal, the FCC and other regulatory bodies are not considering airwaves Clearwire has yet to access.

Ok complete bullshit. We need more broadband in this country for rural, urban, and schools both wired and wireless.

This is a competitive issue for our country. AT&T needs to stop this behavior now.

July 24, 2008

Upside to Wireless Spectrum Wars - NextWave - Next Big Google Wireless Jackpot?

Filed under: BroadDev — Tags: , , , , — John Furrier @ 10:44 am

Analyst Anton Wahlman wrote a post on seekingalpha that is bullish on Nextwave. Anton goes on to suggest that Nextwave might be spinning off the Videopacket technology that is from what I’m seeing being the centerpiece of Google’s Android platform.

Google reiterated its plan to bring its Android operating system to market later this year. WAVE’s PacketVideo software is part of this, and several top-tier handset makers finalizing their products.

This is one of those quiet stories in the confusing spectrum wars. As the spectrum maps starts to materialize around providing broadband like coverage (hello iphone and mobile broadband), is NextWave positioned for a big score?

Anton Walhman thinks so.

Anton writes that the stock is rising because of the following:
1. WAVE sold $150m worth of AWS spectrum, primarily to T-Mobile USA. My preliminary analysis suggests that approximately 600m MHz POPs were sold, implying an average price of $0.25 per MHz POP. This price, while significantly lower than the recent prices paid in Canada, was still materially higher than the price suggested by short-sellers (see SeekingAlpha article “Why I’m Short NextWave Wireless” from May 16, authored by an anonymous source). This would leave WAVE with 347m MHz POPs in the AWS band to be sold at a future date, perhaps at higher prices resembling the recent Canadian auction.

Conspicuously, the $0.25 price paid for these tier-2 city properties resembles the $0.28 nationwide average price assumed in the Sprint (S) - Clearwire WiMax merger little over two months ago. In the US alone, WAVE now has 347m + 2,807m + 972m = 4,126 MHz POPs left after the first tranche sold to T-Mobile USA and others. Forgetting the huge premium normally assigned to NYC and other properties, simply and crudely applying a $0.25 price across the board, still leaves you with over $1 billion coming into the door over the next several months. Figure $150m or so per month for 7 months for $1.05 billion.

WAVE’s market cap on Tuesday was $3.91 x 103m shares = $403m. Then add WAVE’s international spectrum assets plus the chip, systems level and software businesses.

2. Speaking of future spectrum sales, Tuesday night’s 8-K filed with the SEC provides for what will likely be the next milestone in WAVE’s monetization schedule: “NextWave plans to provide an update regarding these efforts upon filing its Quarterly Report on Form 10-Q for the fiscal quarter ended June 28, 2008 on August 7, 2008.” These next steps can include a combination of more spectrum sales, divestiture of any of the chip, software or systems level businesses, or new equity/debt investments. The newly beefed-up balance sheet could also allow for a favorable debt renegotiation.

3. WAVE appears to be only a week away from hitting the jackpot with the FCC in conjunction with the Sirius (SIRI)/XM (XMSR) merger. This article lays out the details as well as any. In brief, the FCC may impose a condition on the Sirius/XM merger to the effect of them having to clean up their long-time pollution of the 2.3 GHz WCS spectrum. If this happens – and it’s now looking likely, if one is to believe the experts and the recent reporting – it would dramatically increase the value of WAVE’s 2,807m MHz POPs in this band. The FCC vote is scheduled for August 1. Would anybody in the right mind dare be short WAVE stock going into that meeting?

4. Google reiterated its plan to bring its Android operating system to market later this year. WAVE’s PacketVideo software is part of this, and numerous reports on Engadget and similar sites show several top-tier handset makers finalizing their products. The significant value of this WAVE software will become evident in less than 6 months from now, when it will be mentioned alongside iPhone and Blackberry in terms of underpinning the hottest handsets in the market.

$60-$80m in 2008 revenue, growing 100%+ into 2009, multiplied by a 4x-5x multiple…hmm, could be worth almost $1 billion once the Google Android phones hit the market this Holiday Season. Hey, why not spin it out or sell it? Is this the update we should expect on August 7? Probably not, but would you dare bet against it?

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