Auction 73: Lots of Spectrum, Lots of Questions

Carl Weinschenk

Seems as if you just can't auction off -- or try to auction off -- a massive amount of spectrum without unleashing a lot of interesting market forces.


PCWorld.com offers a good commentary on the reactions to the end of the 700 MHz auction, which technically was called Auction 73. A researcher from the New American Foundation's Wireless Future Program says Verizon and AT&T's domination of the C- and B- blocks was not surprising, and the ball is now in the FCC's court in terms of how aggressively it enforces open access requirements in the C-block.


The researcher says that the rules are broadly written and leave a lot of wiggle room for the FCC. Another expert suggests that Verizon must be watched closely because of its past opposition to open networks. Google, the story says, in its statements portrays more optimism than the consumer groups about the level of openness that actually will be achieved.


At least on paper, the big winner was Google. Fierce Wireless editor Lynette Luna says that the fact that Verizon was the big C-block winner and AT&T dominated the B-block signals that the auction, while important, represents no fundamental shift in power. The bottom line: The rich get richer. Luna essentially says she is taking a wait-and-see attitude on the true level of openness that will be achieved. The technical certification process could be cumbersome and difficult. The unstated implication is that the carriers could use the process to control which devices and carriers actually get access to the networks.


Phandroid does a good job of reviewing the common wisdom on the dynamics of the auction. The general feeling is that once the FCC established open access standards, Google essentially feigned interest in buying spectrum in order to push others to exceed the reserve price of $4.64 billion. That, the piece says, is precisely what happened, with Verizon taking the spectrum. Before Google is given an Academy Award, however, it should be noted that speculation about this tactical approach was high, and Verizon was no doubt bidding according to its own strategy, not in response to what Google was doing.


Everything didn't go as well in the other blocks. One of the unique features of the auction was the requirement that winners of the D-block participate in a public/private partnership with local police, fire and other emergency organizations. The problem is that the one D block bid -- $472 million -- fell far short of the $1.3 billion the FCC mandated.


It is back to the drawing room for that spectrum -- but not before some scrutiny. Last week, nine consumer groups asked the chairman of the FCC to investigate whether the requirements were too stringent and if the basic approach makes sense, according to CNET. The House Energy and Commerce Committee is planning a hearing along the same lines for April.


The high stakes positioning game over spectrum will continue. In addition to the continued debate over D block, other issues certainly will crop up. Indeed, one already has. GigaOm reports that Google, Microsoft and Intel have provided the FCC with a proposal for handling the "white space" between digital channels. The companies suggest that it be used to create a wireless broadband service that will serve devices that use the open source Android mobile device platform. The devices also would operate in the spectrum won by Verizon Wireless at auction. The story outlines what the companies propose. The details suggest grandiose ambitions. This is understandable considering the nature of the companies floating the proposal.

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Add Comment      Leave a comment on this blog post
Mar 26, 2008 9:25 AM Sascha Meinrath Sascha Meinrath  says:
Hi Carl,I'm happy to answer any followup questions you might have about the auction and various battles that are happening around these bands and their uses.Keep up the good work,--Sascha MeinrathResearch DirectorWireless Future ProgramNew America Foundation Reply

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