4G spectrum auction ends, raising a record $45B

It took a grueling two and half months, but the Federal Communications Commission auction of new 4G airwaves is finally over. The provisional winning bids totaled $44.9 billion for 65 MHz of airwaves, the most the FCC has ever raised at an auction, but we won’t know that actual winners for a few days when the commission releases the official results.

The contest came to a close Thursday morning at the end of 341st round when no new bids were submitted. As you might expect the heftiest prices accrued to the big cities: A single 20 MHz license in New York City metro region went for $2.8 billion, while the same license in Los Angeles went for $2.1 billion. Once you got past the third largest metro area, Chicago, winning bids fell under $1 billion. The cheapest license? That would be a 5 MHz block in the territory of American Somoa, which cost just $2,800.

Unlike previous auctions, which opened up new spectrum bands for 3G and 4G services, Auction 97 centered on a band already widely used for LTE: the Advanced Wireless Service (AWS) band. It’s where [company]T-Mobile[/company]’s main LTE network lies as well as the new LTE overlays built by [company]Verizon[/company] and [company]AT&T[/company]. All three of those carriers participated in the auction, as they can easily add capacity to their networks with these new licenses.

The big question mobile industry wonks are debating, though, is just how heavily [company]Dish Network[/company] bid in the auction. These AWS airwaves complement the satellite spectrum it recently repurposed for 4G use, but the wily satellite TV operator may have had other goals in the auction. Analysts have suggested that Dish might be driving up bid prices for its competitors or gathering a stockpile of spectrum it can use for future leverage over the carriers.

The auction more than quadupled the $10 billion reserve price the FCC set, producing far more interest than anyone in the industry predicted. There are a lot of different opinions on what the record-busting conclusion of the auction means, though. My colleague Jeff John Roberts recently pointed out it’s a victory for net neutrality, as the high prices paid show that the carriers were bluffing when they claimed that Obama’s net neutrality plan would stifle investment.

Gigaom contributor Peter Rysavy said that the participation in the auction shows that the “spectrum crisis” is very real. If carriers could add more capacity and speed to their networks through technology upgrades and more cell towers, then they wouldn’t be paying such ridiculous prices for new airwaves, he wrote in a recent Gigaom post.

The mobile industry’s lobbying group CTIA tends to agree with Rysavy’s conclusion. CTIA’s new President Meredith Atwell Baker issued this statement:

The AWS-3 auction is the highest-revenue generating auction in the 20 year history of FCC spectrum auctions, and with the last major auction six years ago, this reflects wireless companies’ demand for this finite resource to meet Americans’ growing mobile broadband usage. With nearly $45 billion in bids – and billions more in capex – this auction is yet another illustration of the significant economic impact that exclusive, licensed use spectrum provides taxpayers and the U.S. economy. ?

Here’s how Sidecar took the lead in the carpool race

It’s been four months since Uber, Lyft, and Sidecar officially launched their carpool features. And although all three rideshare companies have marketed their new carpool feature to the masses, one of them is pulling ahead: Sidecar.

It has expanded its carpool option to the most cities and seen record-breaking use in the process. The company trotted out a host of statistics and facts during a recent interview with me. The overall picture was clear: Sidecar’s carpooling feature is now its main source of growth, and a welcome injection.

Sidecar’s Shared Rides feature is now available in five cities, compared to three for both Lyft and Uber. In the cities where it launched the feature, 40 percent of the rides Sidecar offers are carpool. Uber wouldn’t disclose its percentage of UberPool rides. Lyft told me that as of a few months ago, 30 percent of its rides in San Francisco were Lyft Line, but it declined to share more up-to-date figures or the percentages of other cities.

It’s worth noting that since Lyft does a higher volume of rides than Sidecar, 30 percent of its total is likely far greater in absolute number of rides than 40 percent of Sidecar’s total.

For those who don’t track every change in the transportation industry: This carpooling option is different from these companies’ original “ridesharing” services. Instead of traveling alone with a driver (as with original ridesharing), in carpooling you get matched with another passenger going the same direction, making it cheaper to get across town than if you were traveling solo.

You might be surprised to hear that Sidecar has expanded its carpooling feature more quickly than Uber or Lyft. After all, it’s the company which I have previously referred to as the forgotten stepsister of ridesharing. It’s the smallest, with far less passengers and far less venture capital funding ($35 million) than Uber ($3.3 billion) and Lyft ($332.5 million).

But the company’s smaller size may actually be the reason for its fast carpool expansion. It has been able to focus its resources on the carpooling part of the business, making it a priority above all else. The company raised its latest round, a comparably paltry $15 million, solely on the premise of expanding Shared Rides.

Since introducing Shared Rides, Sidecar’s business has grown in multiples. It had a record week last week, with rides up 60 percent from the average prior weeks, despite the fact that there wasn’t a holiday like New Years or Halloween to propel the growth. The number of rides it offered in Chicago increased 10 times since it launched Shared Rides there in early November.

Contrary to outward appearances, Sidecar was first to market with the carpool feature, giving it a head start on Uber and Lyft. The media narrative around carpooling originally went: Lyft was the creatorUber upstaged Lyft’s big launch with a preemptive release, and Sidecar belatedly chased the pack.

But as this June article shows, Sidecar had actually been doing shared rides months before its competitors — it just hadn’t made much fanfare announcing it. The company claims it started testing Shared Rides in May. It had months of time to hone its operations, and as Uber and Lyft were just launching their SF markets, Sidecar had already tried out its feature with 13,000 passengers.

It has by no means won that war though. Sidecar may have gotten a head start, but its rivals are still far better funded. All it takes is Lyft or Uber placing a priority on carpooling — making it their main raison d’être — for them to take over.