The 700 mHz auction

Wired, Engad­get Mobile and The Reg­is­ter have posted their updates on the FCC’s 700 mHz auc­tion. Bid­ding started last Thurs­day for the right to use these fre­quen­cies, which include the UHF band that is used by US broad­cast tele­vi­sion chan­nels 14 and higher. US tele­vi­sion sta­tions will stop using these fre­quen­cies in Jan­u­ary 2009 as part of a long-planned con­ver­sion from ana­log to dig­i­tal tele­vi­sion that will sup­port high-definition television.

In other words, this kind of auc­tion is a rar­ity. It’s like find­ing new beach­front prop­erty in Waikiki. Of course, no one owns the air­waves. By inter­na­tional agree­ment, the radio-frequency spec­trum is tightly reg­u­lated. This helps man­u­fac­tur­ers and gov­erne­ments pre­vent radio-frequency inter­fer­ence (RFI), so that devices don’t over­whelm each other with sta­tic and over­lap­ping sig­nals. Spe­cific por­tions of the spec­trum are allo­cated to cer­tain uses, and coun­tries con­trol how some fre­quen­cies are used within their borders.

This FCC auc­tion will decide which com­pa­nies rent the 700 mHz or C block for the next few decades in the USA.

These fre­quen­cies would pro­vide bet­ter mobile phone recep­tion than the cur­rent bands of 800 mHz to 1900 mHz. Users might get bet­ter recep­tion inside a build­ing, for exam­ple. As part of the deal, the FCC has man­dated that the win­ners must allow open access to the new net­works. That’s not the same as free or inex­pen­sive access, but that require­ment does mean the win­ner won’t have a monop­oly. Some­one has to design, build and sell the new hard­ware to use these frequencies.

AT&T, Apple, Google and Ver­i­zon have each been rumored as bid­ders. Cur­rent mobile tel­cos covet the addi­tional band­width and cov­er­age. Apple and Google could develop their own mobile data ser­vices together or independently.

Google exec­u­tives have stated the com­pany will match the US$4.6 bil­lion reserve price of the auc­tion, if the FCC agreed to cer­tain con­di­tions. The FCC said no, but there’s no good esti­mate on how high the auc­tion might go. Per­haps Google was sig­nal­ing that it was will­ing to meet the reserve price, but is the com­pany or any other bid­der will­ing the exceed it? Who­ever wins the auc­tion has to build out the net­work and earn enough money from their new ser­vices to sat­isfy stock­hold­ers and the market.

Tagged as: Apple, at&t, FCC, Google, hardware, hdtv, mobile, radio, telecom, television, USA, Verizon