Wednesday, August 09, 2006
I've returned from my brief camping trip (see Flickr badge at right for highlights) to find two interesting posts on the AWS auction, which commences today. Both are well worth reading and absorbing. Harold Feldman gives a lot interesting historical color on the process, and predicts an outcome north of $15bn. Keith McMahon is looking for $30bn. In my humble opinion, both are right on target when they cite the crucial role this auction could play for DirecTV and Echostar in changing the competitive landscape (i.e., breaking the cable/RBOC duopoly), and I am intrigued to see John Malone backing this "third pipe" consortium. The flipside of this situation, which both authors point out, is that Time Warner Cable and Comcast will have huge motivation to bid aggressively, both to thwart the DBS players and establish a degree of independence from Sprint-Nextel. The other three incumbent wireless players (Verizon, Cingular, T-Mobile) will all want to hurt one another as well as limit future competitive pressure from upstarts. And I assume that Verizon and Cingular want to see T-Mobile burn up cash, as it needs the spectrum far more than they do. All in all, it promises to be an extremely ugly experience - just what Chaotica loves to see!