FCC Commits To 600 Mhz Wireless Spectrum Auction

LAS VEGAS — Federal Communications Commission Chairman Tom Wheeler has committed to a March 29 start date for an unprecedented auction of 600Mhz wireless spectrum currently under the control of the nation’s broadcasters.

The auction has already been delayed two years, but Wheeler was adamant it will move ahead on a timeline that allows input from broadcasters as well as from wireless providers that would be potential spectrum buyers.

The broadcast spectrum in the 600Mhz band offers the potential to wireless carriers to send data, including video and other multimedia at much faster speeds and with lower latency. Latency refers to the speed required to generate a response to a wireless signal.

“I’m supremely confident [the auction] starts March 29,” he said in keynote comments at CTIA Super Mobility Week 2015 here. Explaining the delays, he said the planned auction is like a “Swiss watch with so many moving parts.”

The FCC plans to issue a new public notice in October that will give further details on the planned schedule. Wheeler said that around Thanksgiving, broadcasters will be able to indicate whether they want to participate in offering up the spectrum they use today.

Once the FCC establishes pricing, the broadcasters can decide whether to move forward or withdraw from the process if the prices don’t meet their needs, Wheeler said. In January, wireless providers — including newcomers, possibly — will be prompted to express interest in joining the auction to buy spectrum.

Wheeler contended that the 600MHz spectrum auction shows the FCC is moving to free up spectrum that the cellular industry says it urgently needs.

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Will SoftBank Raise The Stakes?

SoftBank Corp President Masayoshi Son may get a less than enthusiastic reception when he comes to the United States this week to meet Sprint Nextel Corp’s major shareholders, as he tries to drum up support for the Japanese company’s proposed takeover of the No. 3 U.S. wireless service provider.

SoftBank’s billionaire founder, who proposed a $20 billion deal for a 70 percent stake in the U.S. wireless carrier, said on Tuesday that he would discuss the deal with shareholders in a bid to fight off rival Dish Network, a U.S. satellite TV provider, which offered Sprint a $25.5 billion bid.

The executive for the Japanese mobile operator may have a tough time selling the deal, as several shareholders have told Reuters that SoftBank would need to raise its bid in order to win their vote at Sprint’s June 12 shareholder meeting.

Two big Sprint shareholders, Paulson & Co and Omega Advisors, have publicly said the Dish offer looks better than SoftBank’s. Other shareholders said on Tuesday that they would go to meet Son during his trip but they were skeptical about his arguments against Dish.

While Dish’s offer would provide more cash upfront to shareholders, Son has argued that Dish would not be good for the company as it would require Sprint to take on a heavy debt load. He also promises a July 1 close for the deal and warned that Dish regulatory approval may not come until 2014.

Robert Lynch, the director of research for Westchester Capital Management, which owned over 14 million shares in Sprint at the end of December, said that the prospect of a quicker deal close would not be enough to win over his company’s vote.

“We think right now that Dish has a better offer on the table. We think SoftBank’s going to have to improve their offer,” Lynch said, noting that SoftBank’s comments about the prospective debt leverage from a Dish deal were overdone.

“We think the leverage is manageable. We think there are synergies here. While raising the leverage is something we looked at we think its not as big of a obstacle as SoftBank is saying,” Lynch said.

A big Sprint investor who asked not to be named said they were happy to meet with Son while he is in the United States but that they were hoping to convince him to raise his bid.

“If Mr. Son wants to own Sprint he will have to raise his bid,” said the person from a top 25 Sprint shareholder who did not want to be quoted by name ahead of the meeting.

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