[opendtv] Auction Hi-lights

Recently a TV pundit said that a broadcaster had ask him how much their
spectrum was worth and the pundit pointed to Auction 73 as an example of how
much it was worth albeit for another use, broadband presumably, and
suggested that broadcast use, like Qualcomm's venture, had a lower value.

I disagree and believe that broadcast use has a far higher value but here I
just want to point out a recent example of just how different a broadcaster
valued spectrum compared to what Auction 73, and AT&T in particular, valued
the same spectrum at.

In June of 2007 Lin and Banks Broadcasting offered the licenses they had
acquired in Auctions 44 and 49 for sale and did sell them to Aloha. Lin
which had bought their 31 licenses for $6.3 million sold them for $31.5
million to Aloha and I tried to deduce what Aloha sold them to AT&T for a
few weeks later guestimating at $320 million or the same figure I had given
my partner as to what I thought Auction 73 would value the Lin licenses at.
At the time I was just multiplying Lin's sale price of $31.5 million by 10
while my real thinking was that those licenses should go for much more than
$320 million.

No need to deduce anymore. AT&T paid $319,642,000 for the B block equivalent
of Lin's licenses in Auction 73. That is they bought licenses for channels
53 and 58 in the exact same geographic areas as they had bought licenses for
54 and 58 from Lin.

This suggest that the value of a very expensive use of the spectrum that
requires lots of infrastructure and delivers two way data to individuals is
TEN times higher than a broadcast use that can deliver lots of content to
everyone at the same time. Or at least the value that ONE broadcaster, Lin,
puts on broadcast spectrum that could be used for broadcast purposes as
apposed to one Cellular company's valuation, AT&T, for use with two way
data.

Or if AT&T is going to use it for broadcasting, but NOT like Qualcomm is,
but like Aloha demonstrated to them in Las Vegas, maybe it IS being valued
as a broadcast use by a NEW broadcaster who sees value where a legacy
broadcaster, Lin, who is selling out, sees little value.

Whatever, I see the value of this spectrum at another TEN fold higher level
if used for broadcasting like Aloha demonstrated to AT&T and like we
proposed as far back as 1999. TEN times minimum over the prices paid in this
auction within 5 years.

Bert says it is not possible to see current broadcasters building out an
expensive national broadcast network because the cost of infrastructure is
so high. I agree. I can't imagine current broadcasters understanding the
value of broadcasting OTA.

But we may see winners of Auction 73 doing just that, building an expensive
broadcast network, or even more peculiar, building out an even more
expensive national network for a much lower value business of broadband IMO.

Bob Miller

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