The 700 MHz Spectrum Auction may be the biggest auction of the year. Here’s a description of what the 700 MHz Spectrum Auction is, and what could happen. This guide is courtesy of one of my favorite blogs, Gizmodo, the gadget guide.
What Is This 700MHz Deal?
We’re not getting into the technical nitty-gritty of the electromagnetic spectrum. Just know that there’s only a finite amount of it for broadcasting and telecommunications, so spectrum licenses—the right to use a particular chunk—are really valuable. Analog TV is currently broadcast over the 698-806 MHz range of the UHF band: the ballyhooed “700MHz spectrum.” But the FCC will kill off analog TV on Feb. 19, 2009, and will auction off the right to use it for other purposes.
Why Would Someone Pay BILLIONS for It?
Every frequency band has slightly different physical attributes. The 700MHz band penetrates walls fairly easily and travels well, making it perfect for either cellular or long-range wireless broadband that could provide an invisible alternative to DSL and cable. It could simply augment a major telco’s existing holdings with a powerful wireless network, but it could also mean a lucrative new ISP for Google or some other non-telecom behemoth.
Going Once…
So here’s how the auction will work. There are five blocks A-E, divided up regionally. Everyone had to secretly declare their intent to bid to the FCC by Dec. 03, and can’t talk about it at all now. Cue Google’s not-so-secret entrance last week. The actual auction will take place on Jan. 24 with a minimum bid of $4.63 billion to get at the C block. Winners can pick up their prize in Feb. 2009.
The reason all the excitement’s been over what goes down with the C block, is that Google convinced the FCC to load up with “open access” provisions: The winner has to make the network open so any “safe” device use it, plus they have to make their own networked devices open as well—the exact opposite of what Verizon’s handsets are right now. Before Verizon’s recent Mitt Romney-likerevelation that open networks are the One True Path, the veteran telecom fought the openness provisions with every trick in the book, from backdoor deals to lawsuits. Verizon actually sued the FCC over this exact provision—that the C block winner allow any device on the network—that it is celebrating with pig-in-shit PR glee right now. The rules (thankfully) stuck, and Verizon changed its tune.
The Players
Here’s a list of the bidders:
• Google, obviously
• Verizon and AT&T, the other two heavies
• Cox Cable, probably looking to start a wireless internet service
• Echostar, Dish Network’s parent company
• Leap Wireless
• Frontline Wireless, a startup
Here’s who is not in:
• Time Warner
• Comcast
• Sprint
• Clearwire
Big investments are too risky for all of the above, plus those last two already have their plates full trying to get their WiMax deals off the ground.
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