There may be an unusual participant when the FCC auctions portions of the 700MHz band of electromagnetic spectrum.
The usual telecom suspects like AT&T and Verizon will likely be attending the FCC (Federal Communications Commission) auction. But there are strong indications that search engine giant Google will also participate.
Google has presented FCC Chairman Kevin J. Martin with a list of requests for the upcoming auction, which signals the companys potential interest in the spectrum.
The 700MHz band includes UHF channels 52 through 68, which will become available when all analog broadcasting transitions to digital.
In the FCC filing, Richard S. Whitt, Googles telecom and media counsel, requested that the FCC facilitate new competition, as well as adopt open platforms to give “end users the ability to download and utilize software applications, applications, and services.”
Harold Feld, senior vice president of the Media Access Project, a non-profit law firm representing consumer groups in the proceeding, said, “If that rule were in place today, I could buy an iPhone independently and go to a wireless network and say, You must allow me to use an iPhone, rather than the iPhone simply wont work unless a network agrees to allow it to operate.”
Unsurprisingly, AT&T wants the FCC to disregard Googles pre-bid suggestions. Senior Vice President of AT&T Robert W. Quinn, Jr., in a letter to the FCC, wrote, “By adopting all or any aspect of Googles proposal, the Commission…would inhibit broadband deployment by keeping the spectrum out of the hands of those that value it most and would use it most efficiently…”
In contrast, however, Gregory Rose, president of Econometric Research and Analysis, a consulting firm that conducted a study of spectrum auctions, believes that Googles potential bid will be good for consumers because of “increased competition and offering a serious challenge to the dominance of the traditional incumbent control of the process….The more challengers to the incumbents we have, the better.”
Whats at stake, besides a sliver of the electromagnetic spectrum? For one thing, money, and lots of it. The auction can potentially bring in $13 billion to $20 billion to the federal government—without a tax hike. But more importantly, theres a question of how the spectrum will be used.
“The real question is, what will our digital future look like,” Feld said. “If we do nothing, it will look like what it is now, very limited, managed networks where [providers] control what you can attach to the networks, the services that are offered to the networks, and what applications can be run by the devices that connect to the network.
“On the other hand, if we use this opportunity to inject much-needed competition into the broadband world, we can really see things shaken up in a very positive way and have a digital future that has real competition and innovation, rather than have more of the same.”
Potential innovation, according to Google, includes phones that have no attached network, but pay for usage through real-time auctions. Payment of these microtransactions would vary with the increase or decrease of congestion on the network.
Another potential gain (or loss) in this auction is the creation of a “third pipe,” or a third method of delivering broadband access. Currently, broadband is delivered by cable or DSL. As Rose says, “If Google has its own third pipe, they can tell AT&T to bugger off.”
If pre-bidding is fierce, then the bidding itself could turn into a scrum. Potential buyers crave this particular band of spectrum because it has good penetration characteristics, optimal for wireless broadband, and can support a given area with fewer towers. A network using the 700 MHz frequency may be able to run their business at a lower cost than other networks.
Although the conversion takes place on February 17, 2009, the FCC by law will hold their auction no later than January 28, 2008.