FCC’s wireless airwaves sales raises $19.6 billion

Posted by Anne Broache

One of the U.S. government’s most significant sales of wireless airwaves concluded on Tuesday, racking up nearly $19.6 billion in bids over 261 rounds.

The 700MHz spectrum, which is currently being used to air analog TV broadcasts, was put on the auction block by the Federal Communications Commission in January. It’s scheduled to be freed up by February 2009 to make way for all-digital broadcasts.

The slice of airwaves has proven attractive to potential bidders–includingGoogle, Verizon, and others–not only because it’s one of the last remaining chunks of beachfront spectrum, but because of its inherent properties, which mean the waves can travel long distances and propagate through walls. Some say those characteristics make it ideal for offering more robust, affordable wireless broadband services.

The FCC, in a nod to requests from Google and consumer advocacy groups, dictated that about one-third of the spectrum must abide by “open access” principles, requiring whoever wins control of it to allow consumers to operate whatever mobile devices and applications they like.

Another slice of the spectrum was intended to be used to build a nationwide network for public safety operators. But that segment reportedly did not attract the reserve price that the FCC had set, which is potentially a serious setback for proponents of that plan.

It wasn’t immediately clear when the FCC would reveal the identities of the winning bidders.

The FCC, which operated the auction, was expected to unveil more details about its close during a 2:45 p.m. PDT conference call with reporters.

Why we should care about the spectrum debate – by Elinor Mills

If you are like me your eyes probably glaze over a bit when people start talking about wireless spectrum.

Well, maybe consumers should start paying more attention because the debate over how spectrum is managed will determine how we’ll be able to use all types of devices in the future, Tim Wu, Columbia Law School professor, said at a Legal Futures Conference at Stanford University on Saturday.

Specifically, there is a “battle for platform supremacy between two different types of devices”–mobile versus computer, he said. The mobile platform has a centralized, monopoly legacy whereas the computer platform was born in a distributed, open environment.

Internet companies like Google are battling with traditional telecom companies over requiring open access to spectrum, which would allow people to use whatever device they want on that spectrum.

“As (mobile) gains in popularity…the question becomes what the dominant platform will be,” Wu said. “There will be one platform to rule them all…Control of spectrum is the bottleneck” that either maintains the telecom monopoly model or brings the openness of the Internet to the wireless world.

Someone in the audience asked panel member Kent Walker, Google general counsel, if Google had won its bid for the 700MHz spectrum and, if so, whether the spectrum will be opened. Walker said Google can’t talk about the auction while it is ongoing.

“The direction is toward mobile, and local, and the power line,” Walker said. “We do well with the Internet…If it will make the Internet more accessible that’s an opportunity for the company and, ultimately, for consumers.”

There is also an increasing call for spectrum to be owned by all the citizens, rather than licensed by the government to corporations to operate.

“I’m here to say ‘free the spectrum,’” said Kevin Werbach, professor of legal studies and ethics at the Wharton School of Business and former counsel for new technology policy at the Federal Communications Commission.

Under the current system, companies have been allowed to perpetuate the falsehood that spectrum is scarce for economic gain, he said. “The tragedy is we’re not using anywhere near the capacity of the wireless spectrum to communicate.”

Gateways

Chris Kanaracus, IDG News Service

As the volume of Internet traffic grows explosively, driven by factors like rampant demand for online video, a new question is arising: Who will get the bill for the mega-sized data-pipes of the future?

A panel of industry executives and analysts mulled that question and related issues during a keynote event at the Cebit conference in Hanover, Germany.

“One person’s broadband is somebody else’s narrowband…. What was classified as broadband just a few years ago is definitely narrowband today,” said Dan Bieler, an IDC analyst who moderated the discussion.

Observers have predicted that while the Web’s infrastructure is quickly becoming more robust, richer, higher-traffic content will accordingly help fill the additional bandwidth.

In fact, the amount of information created, captured and replicated on the Internet will grow to nearly 1,000 exabytes over the next several years, from less than 200 exabytes in 2006, according to a slide Bieler showed. An exabyte is a billion gigabytes.

TENSION RISING

The situation has led to tensions between providers of bandwidth-munching services– as well as P-to-P (peer-to-peer) file-sharing networks– and the network providers who build out the underlying infrastructure. The long-simmering “net neutrality” debate has centered on whether all types of traffic should be treated equally by network providers.

Nadahl Shocair, CEO of Boomtel Networks– a company working on an Internet-based telephone system, complete with its own numbering system and prefix of ‘100′– suggested there is a fundamental shift occurring on the planet, one that goes well beyond a tussle over costs between related industries.

“Humanity is binding together into a complex ecosystem… a connected, planetary community,” he said, and it “keeps demanding better, faster and free.”

“I think the carriers in about 10 to 15 years will turn into pure gatekeepers. They own the pipe, they own the network,” Shocair added at one point. “Who will pay for this at the end of the day? The consumer will, in one way or another.”

Frank Rosenberger, chief marketing officer of Vodafone, the mobile telecom, suggested something has to change.

“I think there are fair ways to distribute this cost between the benefactors on the one side and those who provide the benefit on the other side,” Rosenberger said. “How many videos would YouTube have distributed if they needed to charge customers for these videos?” he asked.

Marco Boerries, executive vice president of Yahoo’s Connected Life division, predicted a mutually beneficial outcome for service and infrastructure providers, and said his company already has relationships with more then 50 telecoms, including Vodafone. “When you have a partnership, everyone should focus on their strengths. Yahoo is not going to run a network or go into billing,” Boerries remarked.

“Yes, we have tough questions to tackle,” he added. “The same questions happened with move from dialup to broadband. I am confident those questions will be answered.”