Government monopoly again enriching the well connected, Morgan Stanley awarded rights to auction broadcast spectrum
Posted on September 14th, 2008 by bile Tags: 3G, cellular telephone, FCC, federal government, mobile phones, Morgan Stanley, United Kingdom, United States, wireless networksMorgan Stanley has won the contract to market the prime broadcast spectrum that will become available for sale once all television stations switch from analogue to digital signals in 2012.
The auction, which may raise up to £5bn for the Treasury, will make available up to eight packages of wavelength in a “sweet spot” on the spectrum.
About 128Mhz of spectrum in the sweet spot around 700Mhz will be available.
Ofcom, the broadcasting regulator, is expected to begin the process at the end of next year or in early 2010.
The spectrum provides an optimum combination of broadcast range and the ability to carry large amounts of data. It will be of particular interest to mobile telephone companies and those wishing to build wireless networks in urban areas.
Wherever a television signal can be received, the same will apply to mobile phones and laptops.
Morgan Stanley beat several other banks and two marketing companies to the contract, the value of which was not disclosed.
An official at the regulator said that Morgan Stanley’s contact book, allowing it to open direct contact with anyone from US telecoms groups to Asian investors, would be of great value in getting the best price.
In the US last March a similar sale of 52Mhz in the 700Mhz range raised $19.1bn (then £9.8bn). Taking into account the size of the market, this suggests a figure of £4.4bn for the 128Mhz on offer in the UK.
Analysts expect existing telecoms companies to take up most of the spectrum, although Ofcom believes that it can spark wider interest from around the world.
An auction of spectrum in 2000 raised £20bn from mobile phone companies for 3G services.
I’m against government ‘owning’ the radio spectrum anyway but why is it that they are contracting out the auctioning of it? Whether it’s a fix ammount or a percentage of the winning bids the ammount spent is far too much in my opinion. Sure there will be a lot of paperwork when you get down to it the only thing occurring is a transfer of license owner. Why does an organisation like Morgan Stanley need to be involved? I’m sure given the size of the federal government and the FCC itself there is some system which could be arranged without the need of a middle man.
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