Startup May Sue FCC Over Spectrum
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M2Z Networks Inc. may sue the U.S. Federal Communications Commission after the agency turned down its request for radio frequencies for a national broadband wireless network.
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Depending on who's talking, the wireless spectrum auction that starts on Jan. 24 will significantly change the mobile and wireless landscape in the U.S., or it won't have much impact at all.Some believe it will lead to creation of new nationwide wireless networks and the entry of new wireless operators. That increased competition could benefit users."This spectrum auction is the first real chance we've had to see a competitor emerge that could compete with the telephone and cable companies," said Gigi Sohn, president of the Public Knowledge consumer rights organization. Aggressive bidding is expected from several well-funded companies that aren't currently in the wireless business, such as Microsoft co-founder Paul Allen's Vulcan Spectrum and Google.Others, however, beg to differ. "The auction won't change anything per se," said Jack Gold, principal of J. Gold Associates, a telecommunications consulting firm. "But other pressures in the system -- market forces -- could ultimately change a lot of things." For example, Gold said he expects more competition and more open wireless networks to emerge over time, no matter who wins the auction.Besides the possibility of new competition, this auction is also receiving a lot of attention because it is likely to be the last time that large chunks of wireless spectrum will become available. Also with this auction, the Federal Communications Commission (FCC) has imposed rules that will, to some extent, open up wireless networks.However, a lot of confusion about the auction remains. Here are the answers to some frequently asked questions.What is being auctioned?The FCC is auctioning off a huge swath of wireless spectrum in the 700-MHz range. This spectrum has been used by television broadcasters, which must return the spectrum to the FCC when they switch next year from analog to digital broadcasts.In particular, the FCC is auctioning many "blocks" of spectrum. Two of those blocks, the so-called C-block and D-block, have enough capacity and geographical coverage to create nationwide wireless networks. The smaller blocks of spectrum also could receive a lot of attention from bidders. Those blocks are regional in nature, and many small telecommunications providers are expected to bid on them.How is the 700-MHz portion of spectrum different than others?The physical nature of the 700-MHz spectrum makes it attractive to users and service providers alike. Many digital cellular systems in the U.S. use radio signals in the 1,800-MHz and 1,900-MHz ranges, although some older analog systems still use spectrum in frequencies as low as 800 MHz. Because radio waves in the 700-MHz range are physically longer than higher-frequency radio waves, they travel farther and are better able to penetrate walls and other impediments.These characteristics are important for several reasons. First, the better penetration makes it feasible to use wireless services indoors. That makes these wireless services competitive with land-line broadband services such as Digital Subscriber Line and cable.A second important advantage is that, because radio waves in this portion of spectrum travel farther, it is easier to bring wireless access into rural areas that currently aren't well served by wireless providers. This greater transmission range also means that operators would need to invest less in towers and base stations and other wireless infrastructure.These advantages, combined with the nationwide coverage, explain why the available 700-MHz spectrum is often referred to in the media as "beachfront property."What technologies can be used in this portion of spectrum?Virtually any wireless technology that is currently in use can also be used in the 700-MHz range. That includes traditional and next-generation cellular service and other wireless broadband technologies such as WiMax.What potential benefits could come from this auction?Besides increased competition, the FCC decreed that the winner of the C-block must make networks that use that portion of spectrum available to any device that employs compatible technology. For example, if a carrier builds an EV-DO 3G (Evolution Data Optimized third-generation) network, any device with that technology built in will be able to access the network.This openness will increase consumer choice. Currently, cellular operators in the U.S. typically limit what devices can be used on their networks and what applications can run on those devices. Because this approach gives them so much control, the incumbent carriers fought the open network provision vigorously.Note, however, that this provision applies only to the C-block. Carriers that win any of the other blocks can continue to limit access to those networks.What other rules apply to the spectrum?The effort to open up new spectrum to all devices was led by Google and several public-interest organizations. In addition, those groups urged the FCC to require that the winning bidders make some spectrum available, on a wholesale basis, to other carriers. That was another attempt to foster more competition among wireless carriers. However, this effort failed. The FCC refused to require winning bidders to resell some of that spectrum although, as always, that could occur voluntarily.There are other limits on how the spectrum can be used. One notable mandate is that any network using the D-block must be built to specifications particular to public safety applications and that portions of the spectrum are available for those uses. Because of the emphasis on public safety, the D-block is mandated to be available to 99.3% of the U.S. population by 2019.There are limits on the other blocks, too. For instance, there are use-or-lose provisions that require wireless networks to be built out within a certain time frame or the license will be lost. This is an attempt to make sure that large companies don't buy spectrum simply to block other companies from acquiring it.Who is bidding?The auction has attracted some predictable bidders, some surprise bidders and many smaller bidders. More than 260 applications to participate in the bidding process were initially submitted to the FCC. The predictable companies included incumbent telecommunications operators such as Verizon Communications and AT&amp;T.Then, there are some well-funded bidders with unknown motives, such as petroleum giant Chevron and Vulcan Spectrum. Also in the mix are some cable operators.Besides the big players, many local and regional wireless carriers have applied to participate in the auction and are likely to bid on the regional chunks of spectrum. A local telephone company, for instance, could use such spectrum to provide wireless broadband service to its local customers using a technology like WiMax.What about Google's bid?The potential bidder that has received the most attention is Google, which has been mum about its specific plans. Most observers believe the company's interest in the auction is tied to its recently announced Linux-based Android mobile phone system.Google likely wants to use Android to sell mobile advertising. However, that won't be successful if existing wireless carriers don't allow phones based on it to be used on their networks. If Google owns the open C-block, it will be certain that phones based on its Android system can be used.Few, however, expect Google to create a whole new wireless network from scratch -- if it wins."Google will rent out the spectrum, said consultant Gold. "It would be insane on their part if they decided to put up their own network. Being landlords of the airspace, that makes sense."As a result, it is widely expected that, if Google wins the C-block, it will work with other providers. For instance, rumors have been circulating that Google will work with T-Mobile USA, which has been constrained in expanding its network by a lack of spectrum. Neither company has been talking about such specifics.How will the auction be conducted?A "mock auction" will be held on Jan. 22, and the auction will begin in earnest two days later. Many observers believe the bidding, which will be largely electronic, could last a couple of weeks.Bidding will be anonymous. That is to say, nobody will know who is bidding or how much they are bidding. The goal of this rule is to prevent collusion aimed at keeping out specific bidders."There are quite a few studies that show that, if you know who is bidding, you can engage in anticompetitive blocking behavior," said Public Knowledge's Sohn.How much will spectrum cost?Buying spectrum will require very deep pockets. In particular, the large, nationwide spectrum blocks will surely be expensive. The C-block, for instance, has a reserve, or floor, bidding price of about $4.7 billion. The total reserve price for all blocks is about $10 billion, and many believe the bidding will go much higher than that.
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The Internet giant, which may bid for a swath of airwaves, is lobbying for regulations to support a vision that could change how cellphones are used.
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(InfoWorld) - Several companies have challengedÂ spectrum auction rulesÂ recently set by the U.S. Federal Communications Commission, with Frontline Wireless protesting that the auction of the 700MHz band to be auctioned in January could shut out small bidders. In addition, AT&T has asked the FCC to reconsider requirements for the winning bidder of a block of spectrum to be used to build a nationwide broadband network for public safety agencies. The rules require bidders to reach a service agreement with public safety officials before the auction, and the FCC's decision to deny bidders the spectrum if an agreement is not reached is "an extreme penalty," AT&T said in its petition. AT&T and Frontline, a startup made up of government and wireless industry veterans, filed petitions for reconsideration of the auction rules with the FCC Monday. They were among 10 companies that filed petitions in the last week asking the FCC to reconsider the auction rules it set in July for the 700MHz band of spectrum being vacated by U.S. television stations. The FCC is scheduled to auction 62MHz of spectrum in the 700MHz band beginning Jan. 16. The FCC set a reserve price of $10 billion for the entire 62MHz, but many observers believe the auctions will raise much more than that. The spectrum is currently controlled by U.S. television stations using channels 52 to 69. The U.S. Congress in late 2005 passed legislation that requires the stations to move to digital broadcasts and abandon this spectrum by February 2009. Frontline raised several objections about the auction rules. The company and someÂ consumer groupsÂ had called for the FCC to require that the winning bidder of a portion of the spectrum resell the spectrum at wholesale rates, but the FCC declined to do so. FCC members talked about including small businesses in the auction, Frontline noted. But the FCC denied bidding discounts, called credits, for small business wholesalers, Frontline said. Small businesses can't compete against large wireless carriers unless they adopt a wholesale model, the company said. "Wholesaling is also the only model a new nationwide wireless network operator could realistically afford to adopt, given the massive costs associated with providing retail service -- consider Verizon's 2,300 retail outlets and its $1.9 billion annual advertising budget," Frontline said in its petition. Frontline also suggested the reserve, or minimum prices, for two blocks of spectrum are too high. Frontline objected to a reserve price of about $1.3 billion for a 10MHz portion of spectrum to be paired with 12MHz set aside for emergency response communications. Frontline said the $4.6 billion reserve is also too high for another 22MHz of spectrum, for which the FCC adopted so-called open access rules. If the reserve price is met, the FCC will require the winning bidder to allow customers to bring wireless devices from other carriers and prohibit the winner from blocking or slowing competing Web content. Under the FCC rules, both blocks of spectrum would be re-auctioned under new rules if the reserve prices aren't met. "The unlawfully high reserve prices will nullify or disrupt and damage the Commission's carefully considered decisions as to the highest and best use of this spectrum, encourage bidding strategies that defeat these sound allocations decisions and seriously reduce auction revenues," Frontline's lawyers wrote. Earlier this month, Verizon Wireless asked the U.S. Court of Appeals for the District of Columbia Circuit to review the FCC's decision to require open-access rules supported by Frontline and some consumer groups. Those rules are "arbitrary, capricious, unsupported by substantial evidence and otherwise contrary to law," Verizon Wireless said in a brief filed with the court.
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Google is one of several nontraditional communications companies planning to bid on 700MHz wireless spectrum. But at this point it's really anyone's game.
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Blog: Search giant announces it's participating in the Federal Communications Commission's upcoming wireless spectrum 700MHz band auction--but there's a catch.
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Company pledges free Wi-Fi if people share their broadband connections, but service model violates U.S. ISP user agreements.
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Blog: With full leasing ownership of the 700MHz spectrum, Google would try to effectively cripple the cell phone industry. Before you scoff at that idea, consider the terms under which Google would offer to buy the spectrum.
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A startup says it can give subway riders wireless Internet access that's faster than most home broadband in the U.S.
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After tossing Wi-Fi start-up bids for exclusive control of fallow spectrum, federal regulators want public input on how to proceed. Will a new fight over "open access" rules emerge?
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The maverick network service provider run by former Netscape CEO Jim Barksdale, and that was largely responsible for convincing the US Federal Communications Commission to impose new and innovative rules for bidders on certain blocks of the 700 MHz UHF spectrum, is now saying it may not be able to bid after all. In a formal complaint to the FCC filed Monday, lawyers for Frontline Wireless accused the FCC of "getting it wrong" by having set the asking price of the choicest blocks in the auction too high.
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A Florida company seeks to change FCC rules against selling such equipment to local and state agencies.
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Wireless vendor Symbol Technologies Inc. has told us it will be seeking a big license fee from all Wi-Fi equipment vendors for an infringed patent. And according to one manufacturer, Proxim Corp., it stands a good chance of getting it.
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The Bush administration is expected to press for speedier licensing of public airwaves for auction to private companies. But telecom regulators say wireless apps need unlicensed spectrum too. By Joanna Glasner.
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TVGoHome The row over US âwhite spaceâ spectrum continues, with the newly formed Wireless Innovation Alliance stepping up its campaign to convince the FCC and the industry that wireless devices can be used in these areas without interfering with digital TV signals.â¦
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The upcoming 700MHz spectrum auctions by the U.S. Federal Communications Commission (FCC)&#160;have drawn bid applications from giant companies including Google and AT&amp;T. But a number of small companies and individuals have submitted bid applications as well.Late Tuesday, the FCC announced that it had accepted bids from 96 applicants and has another 170 applications that are incomplete for the auction of highly coveted spectrum that can be used for voice or wireless broadband service.Some of those applicants may not complete their applications. In the FCC&#39;s advanced wireless services auction in 2006, 252 organizations submitted applications, and there were 168 qualified bidders.It&#39;s typical that several initial applicants will bow out before they have to submit deposit payments, said analyst Jack Gold of J. Gold Associates. &quot;When it comes to putting down earnest money, many [applicants] back away or can&#39;t get the money,&quot; he said.Applicants have until Jan. 4 to pay their deposits or resubmit their applications for the auction, which begins Jan. 24.The FCC designed the auction in an effort to attract small bidders. Up for sale is 62MHz of spectrum in the 700MHz band, now occupied by U.S. television stations. In late 2005, Congress passed legislation requiring U.S. TV stations to move to all-digital broadcasts and abandon analog spectrum between channels 52 and 69. The deadline for TV stations to end broadcasts in the 700MHz band is February 2009.The spectrum is broken up into five blocks, with three of the five blocks divided into small geographic areas. A 12MHz block of spectrum called the A block is divided up into 176 small geographic areas, called economic areas, as is the 6MHz E block. The 12MHz B block is broken up into 734 local areas called cellular market areas. Bidders can win multiple regional or local licenses.But the chances of small companies winning significant amounts of spectrum is &quot;pretty slim,&quot; Gold said. &quot;Any areas with significant population densities will bring in the big boys, who seek revenues from a mass market,&quot; he said. &quot;I suppose some smallish rural areas may be of less interest to AT&amp;T [or] Verizon, but these guys want true countrywide networks, so they will likely bid there anyway.&quot;Several unfamiliar names are among the prospective bidders who submitted incomplete applications:-- Office of Spectral Ecology, listed as an unincorporated association, with one board member, based in Montreal.-- Dragon Arch, listed as a corporation based in New York City.-- FaithFone Wireless, a Phoenix wireless carrier launched in September 2006. FaithFone is a self-described &quot;purpose-driven Christian mobile phone company, offering a cell phone service combining faith and family content.&quot; FaithFone&#39;s wireless service offers daily devotionals, Bible passages and a prayer of the day through text messaging.-- The Navajo Department of Information Technology.-- Part-15.org, a nonprofit organization for users of unlicensed wireless spectrum.Smaller companies with annual revenue of less than $15 million that have submitted complete applications include:-- Grain Spectrum, based in Sarasota, Florida, a minority-owned company focused on building wireless networks for government users.-- GreenFly, a mobile services provider founded in 2006 and based in Scottsbluff, Nebraska.-- Xpressweb Internet Services, an Internet service provider based in Kanab, Utah.The auction, expected to raise more than $10 billion, is likely to last several weeks. Many spectrum experts call the 700MHz band &quot;beachfront&quot; property because it can carry wireless broadband signals three to four times farther than some other spectrum bands.Since early December, applicants have been in an FCC-mandated quiet period. The FCC spectrum auction rules prohibit collusion on bidding plans.
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A coalition of big technology companies wants to bring high-speed Internet access to consumers in a new way: over television airwaves. Key to the project is whether a device scheduled to be delivered to federal labs today lives up to its promise.