How the wireless spectrum auction could change your life
470752
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.
437807
The high bids totalled $3.2 billion in the U.S. Federal Communications Commission&#39;s&#160;auction of wireless spectrum licenses in the 700MHz band&#160;after three rounds and a day and a half of bidding.
509344
Consumer groups and broadband vendors want more market competition for wireless spectrum.
361589
Cellphone customers should soon encounter fewer dead spots in their coverage areas and more easily use next-generation phones that play television-quality video and perform other high-tech tricks, thanks to a Federal Communications Commission spectrum auction that concluded yesterday.
602447
(InfoWorld) - Google and Intel have already expressed interest in the forthcoming 700MHz spectrum auction. Now, speculators say Apple may throw its hat into the ring. TheÂ auctionÂ is creating a bit of a frenzy because the winner will obtain some of the last available prime spectrum, ideal for delivering broadband wireless Internet access. The U.S. Federal Communications Commission (FCC) expects to auction it off next year. While Google has said that it may bid in the auction, Apple's participation is pure speculation, and analysts appear split on whether it makes sense for theÂ iPhoneÂ maker to become a network operator. Apple's entry into the carrier business, while interesting to speculate, is difficult to imagine since the company already has a "sweetheart deal" with AT&T, said Michael Gartenberg, an analyst with Jupiter Research. In an unusual arrangement for the mobile industry, Apple is thought to receive a portion of the monthly service revenue that AT&T earns from iPhone customers. AT&T is the iPhone's exclusive carrier. Gartner analyst Van Baker finds it "highly unlikely" that Apple would be interested in buying the spectrum. "It's a very different business than they're in, and it's not something they have a whole lot of expertise in," he noted. Apple could decide to partner with another company that has more experience in the mobile operator business, which could make more sense, Baker said. Still, the arrangement between Apple and AT&T looks beneficial to both companies, so there probably isn't a significant incentive for Apple to want to change that setup, especially because the operator business comes with "lousy margins," he said. However, Apple might have at least one good reason for wanting to operate a network, said Avi Greengart, an analyst with Current Analysis. "They do like to control the end-to-end experience," he said. While becoming a mobile operator would be a "tremendous stretch" for Apple, it wouldn't surprise Greengart if Apple was considering it. An Apple network would likely be very tightly integrated with Apple products and come with very simple pricing, he said. Such a strategy could have a ripple effect across the industry. Operators tend to watch what competitors are doing and make adjustments to their own strategies accordingly, he said. Greengart and the others cautioned that they hadn't heard directly from the company or other sources that Apple was considering the auction. "But they're pretty good about being tight-lipped," Greengart said. Apple is known for being very secretive, with big announcements leaking out only days in advance, if ever. BusinessWeek first reported on the rumor that Apple might be interested in the spectrum auction.
719880
Agency to auction licenses for communications; consider cell phone use during flights.
707956
We won't know exactly what bidders plan to spend for a lucrative chunk of spectrum upon which to build new wireless services, but we do know who the bidders are. And at least for now, there are a few surprises.
509092
Small businesses have joined huge players like Google and AT&T in submitting applications to bid in the FCC's wireless spectrum auction.
250438
(InfoWorld) - T-Mobile USA Inc. came out the biggest spender in the U.S. Federal Communications Commission's Advanced Wireless Services spectrum auction, which ended Monday. Participants bid a total of nearly US$13.9 billion on 1,087 licenses to offer 3G (third-generation) mobile services in areas across the U.S. The auction began Aug. 9 and went on for 161 rounds. The radio frequencies could be used for services including data, voice and video on mobile devices. The auction is the first of two that should roughly double the amount of radio spectrum available in the U.S. for mobile services. The FCC is also preparing to auction frequencies around 700 MHz that have been used for TV broadcasts. Moving those to mobile use could take years. T-Mobile is playing catch-up against bigger carriers in introducing 3G services. Its bidding company, T-Mobile License LLC, had the winning bids on 120 licenses and will pay almost $4.2 billion for its spectrum. All told, the licenses it won could reach almost 475 million people, a number greater than the U.S. population. There was a wide variety of licenses up for auction, ranging from local to regional coverage. The five biggest bidders, led by T-Mobile, represented the country's biggest cellular companies. Cellco Partnership, representing Verizon Wireless Inc., came in second place with $2.8 billion in bids for 13 licenses. SpectrumCo LLC, representing Sprint Nextel Corp. and cable partners, bid almost $2.4 billion for 137 licenses and Metro PCS AWS LLC bid almost $1.4 billion for eight licenses. Cingular Wireless LLC, represented by Cingular AWS LLC, came in fifth with bids of more than $1.3 billion for 48 licenses. Overall, more than half of the 104 winning bidders that participated were certified as small businesses, according to the FCC. The agency put 1,122 licenses up for auction. The unsold licenses will be made available again in a future auction. The winners need to make down payments within ten days after the FCC puts out a public notice on the close of the auction. In the same time period, they have to submit long-form applications for the licenses.
18175
(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.
275043
Bids in the F.C.C.âs auction for wireless spectrum reached the governmentâs $10 billion goal. One problem: bidding for the biggest block of frequencies stalled at $4.3 billion, below the $4.6 billion reserve price.
596655
Business customers can expect better broadband wireless after the FCC auctions off prime radio-frequency spectrum next year.
32842
Bidding hit $6.1 billion in the federal governmentâs auction of wireless spectrum. Two bidders appear to be bidding for the most valuable national license.
274297
Apple Inc. may bid for the rights to a wireless spectrum auctioned by the Federal Communications Commission, a risky but intriguing move that would help carry the consumer electronics company into the telecommunications realm.
192965
A bidder on Thursday offered $4.71  billion for a key piece of wireless airwaves being auctioned by  the U.S. government, surpassing a minimum bid requirement and  triggering a condition that the spectrum be accessible to any  device or software application.
513609
The auction for rights to a highly valuable swath of the nationâs airwaves will begin Thursday and is expected to include multibillion-dollar bids from the nationâs two biggest wireless phone companies.
295899
Meat wagons hitched to wireless bandwagon