Comments (0)
Email
When one thinks about auctions, one normally thinks about concrete things being sold such as cars in car auctions, works of art in art auctions, and everything in between in online auction sites such as uBid, and eBay.
Right now, however, the FCC is having an auction on something that you
can't see, touch, or hold, but this auction is worth billions of
dollars to the parties involved. The auction in question is for the
700MHz wireless spectrum. What does it mean to own the 700MHz spectrum?
Why would corporations spend billions upon billions of dollars for such
a thing? How does this auction work? That's what this article will
discuss.
The FCC, otherwise known as the Federal Communications Commission, is the government agency in charge of regulating all non-Federal Government communications. This includes all radio and television broadcasts, all international communications that originate in the U.S., and all interstate communications, such as satellite and cable transmission. Starting on January 24th, 2008, the auction for the 700MHz will begin. The reason why this frequency spectrum will be available is because of the digital television broadcast switch that will happen next year. Beginning in February 2009, all television broadcast signals will be changed to high definition. More information about this switch can be found in the accompanying article. This switch to high definition broadcasting will free up the frequency spectrum that was being used to broadcast television channels on standard definition, specifically channels 52 to 69. With this open wireless spectrum, which runs from 698MHz to 806MHz, the FCC has decided to have an open auction in order to sell the spectrum to any takers.
The auction is being broken up into different "blocks" of the spectrum, which will each be auctioned off on its own. The blocks are divided up into blocks "A", "B", "C", "D" & "E", and all have different levels of value to the parties involved in the auction. The most popular one being "C" block, because of it being part of the Ultra High Frequency (UHF) band, and because of this, it is estimated to be the one to pull in the most money. There is a special stipulation along with the "C" block auction in regards to the "open access" rule that comes along with this block. The FCC applied an extra rule for "C" block, in that, if the auction for the block reaches the $4.64 billion reserve, the winner of the block must use that block as an open access spectrum. This is a deal that many companies, such as Google, have fought for, while telecommunication companies, such as Verizon and AT&T, have fought against. This is because of the restrictions that those kinds of companies have placed on their wireless technology. An open access format will allow any device that has the capability of supporting the appropriate protocols be allowed to connect to the "C" block range of frequency. Meanwhile, "D" block is one of the least popular blocks in the auction, mainly because it is the public service band, and is currently falling well short of the expected $1.33 billion reserve that the FCC expected to get for it.
The main players that are rumored to be participating in the auction are mainly telecommunication companies, such as Verizon Wireless, AT&T, and Frontline Wireless. Over 200 companies were accepted into the final list of participants of the auction. An unsurprising party participating in this auction is internet giant Google, applying for the auction as Google Airwaves Inc. The reason this is unsurprising is because there are many rumors that Google is trying to start up their own Google phone service, a gPhone of sorts. If Google were to win the auction, they would use the airwaves as an open access platform for their service, allowing devices to be used openly within that spectrum, and also allow the spectrum to be free to lease wholesale.
Google's approach to 700MHz spectrum is a unique one when compared to what the telecommunication corporations plan to do with the spectrum, which, one can assume, is mainly expanding their network power. Word has it however, through Business Week, that several phone companies out of Japan, such as KDDI, DoCoMo, and SK Telecom, are making waves within the auction by teaming up with Google in winning the auction on the infamous "C-Block" spectrum. This is intriguing because of the fact that it may lead whichever company that wins to bringing their cell phones over here to North America, where our phones are clearly and easily outclassed by the cell phone technology that can be found in Asia. If this were to happen, these new cell phones will be able to change the way cell phones are viewed and use here in the states. They will become viable devices for various applications that have failed to catch on, mobile-wise at least, for year, including internet browsers, mobile gaming, and more.
One more interesting use of the 700MHz spectrum would be to apply Toyota's recently announced wireless vehicle-to-vehicle and vehicle-to-pedestrian communication technology. By using the 700MHz spectrum, which has the added advantage of being able to penetrate walls, as opposed to the 5.8GHz, which can be easily blocked by various obstructions, it will be possible to establish a communication system between vehicles in order to help prevent accidents. This plan is also expected to be implemented in Japan with their own 700MHz spectrum once they make the switch over to digital TV in the upcoming years.
This auction is a one of a kind, and is already underway as you read this. Each passing business day will include 3 rounds of betting for all 5 blocks, and each passing day will add millions upon millions of dollars into the auction for airspace. It will be interesting to see how the auction turns out, and how much money it will eventually pull in for the government, with the auction currently topping $10 billion for the total spectrum as of this writing, with over 5 weeks of bidding to go. We will find out how the wireless landscape will change when the auction concludes come this spring.
The FCC, otherwise known as the Federal Communications Commission, is the government agency in charge of regulating all non-Federal Government communications. This includes all radio and television broadcasts, all international communications that originate in the U.S., and all interstate communications, such as satellite and cable transmission. Starting on January 24th, 2008, the auction for the 700MHz will begin. The reason why this frequency spectrum will be available is because of the digital television broadcast switch that will happen next year. Beginning in February 2009, all television broadcast signals will be changed to high definition. More information about this switch can be found in the accompanying article. This switch to high definition broadcasting will free up the frequency spectrum that was being used to broadcast television channels on standard definition, specifically channels 52 to 69. With this open wireless spectrum, which runs from 698MHz to 806MHz, the FCC has decided to have an open auction in order to sell the spectrum to any takers.
The auction is being broken up into different "blocks" of the spectrum, which will each be auctioned off on its own. The blocks are divided up into blocks "A", "B", "C", "D" & "E", and all have different levels of value to the parties involved in the auction. The most popular one being "C" block, because of it being part of the Ultra High Frequency (UHF) band, and because of this, it is estimated to be the one to pull in the most money. There is a special stipulation along with the "C" block auction in regards to the "open access" rule that comes along with this block. The FCC applied an extra rule for "C" block, in that, if the auction for the block reaches the $4.64 billion reserve, the winner of the block must use that block as an open access spectrum. This is a deal that many companies, such as Google, have fought for, while telecommunication companies, such as Verizon and AT&T, have fought against. This is because of the restrictions that those kinds of companies have placed on their wireless technology. An open access format will allow any device that has the capability of supporting the appropriate protocols be allowed to connect to the "C" block range of frequency. Meanwhile, "D" block is one of the least popular blocks in the auction, mainly because it is the public service band, and is currently falling well short of the expected $1.33 billion reserve that the FCC expected to get for it.
The main players that are rumored to be participating in the auction are mainly telecommunication companies, such as Verizon Wireless, AT&T, and Frontline Wireless. Over 200 companies were accepted into the final list of participants of the auction. An unsurprising party participating in this auction is internet giant Google, applying for the auction as Google Airwaves Inc. The reason this is unsurprising is because there are many rumors that Google is trying to start up their own Google phone service, a gPhone of sorts. If Google were to win the auction, they would use the airwaves as an open access platform for their service, allowing devices to be used openly within that spectrum, and also allow the spectrum to be free to lease wholesale.
Google's approach to 700MHz spectrum is a unique one when compared to what the telecommunication corporations plan to do with the spectrum, which, one can assume, is mainly expanding their network power. Word has it however, through Business Week, that several phone companies out of Japan, such as KDDI, DoCoMo, and SK Telecom, are making waves within the auction by teaming up with Google in winning the auction on the infamous "C-Block" spectrum. This is intriguing because of the fact that it may lead whichever company that wins to bringing their cell phones over here to North America, where our phones are clearly and easily outclassed by the cell phone technology that can be found in Asia. If this were to happen, these new cell phones will be able to change the way cell phones are viewed and use here in the states. They will become viable devices for various applications that have failed to catch on, mobile-wise at least, for year, including internet browsers, mobile gaming, and more.
One more interesting use of the 700MHz spectrum would be to apply Toyota's recently announced wireless vehicle-to-vehicle and vehicle-to-pedestrian communication technology. By using the 700MHz spectrum, which has the added advantage of being able to penetrate walls, as opposed to the 5.8GHz, which can be easily blocked by various obstructions, it will be possible to establish a communication system between vehicles in order to help prevent accidents. This plan is also expected to be implemented in Japan with their own 700MHz spectrum once they make the switch over to digital TV in the upcoming years.
This auction is a one of a kind, and is already underway as you read this. Each passing business day will include 3 rounds of betting for all 5 blocks, and each passing day will add millions upon millions of dollars into the auction for airspace. It will be interesting to see how the auction turns out, and how much money it will eventually pull in for the government, with the auction currently topping $10 billion for the total spectrum as of this writing, with over 5 weeks of bidding to go. We will find out how the wireless landscape will change when the auction concludes come this spring.
Leave a comment