700Mhz auction. Does that get your heart racing? It isn’t garnering nearly the same level of excitement as, say, Apple releasing a new product. But the FCC’s auction, set to begin tomorrow, nonetheless is setting off some chatter in the wireless industry.

 

Whether or not the impact of the auction ends up, on balance, having a negative or positive effect remains to be seen—and likely depends a lot on where you’re sitting. For example, an InfoWorld report today warned that this particular auction may very well be similar in its impact to the “disastrous 1996 C-Block PCS auction,” yet that isn’t deterring companies that plan to bid.

 

“Like the earlier auction, the 700MHz auction is set to occur in a faltering economy, presenting challenges to license hopefuls needing cash,” InfoWorld said in its report. “Yet, just like that ill-fated auction more than 10 years ago, an oddball collection of participants plan to bid, this time including the Missouri Farmers' Union, the Roman Catholic Diocese of Brooklyn, and Disney.”

 

Why was the C-Block auction in 1996 “disastrous”? InfoWorld said: “because it was designed not just for companies with access to billions of dollars but for entrepreneurs interested in getting into the wireless industry. Postal carriers, lawyers, and doctors quit their day jobs and invested their savings, confident that U.S. Federal Communications Commission (FCC) incentives would help them make it big.”

 

Out of an original 255 bidders in the 1996 auction, InfoWorld said, 89 won licenses and only a handful went on to start actual businesses. All the rest went bankrupt, sold their licenses at significant losses, or returned the licenses to the FCC as part of an amnesty program.

 

What do you think—will the 700MHz auction be a repeat, with many disappointed gold-diggers in the end losing more than they invest? Or something entirely different?