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July 10, 2007

Spectrum auction update

Posted by Tricia Duryee at 11:28 AM

There's already an update to my Monday post on the upcoming 700 MHz spectrum auction for wireless broadband technology.

In a nutshell, a company called Frontline Wireless is arguing that because existing wireless networks are owned big giants, competition has been stifled. Entrepreneurs can't easily get their applications and equipment to run on these networks and, because of this, they are inherently slower to develop.

Well, it sounds like FCC Chairman Kevin Martin may agree.

USA Today reported that Martin is expected to propose ground-breaking rules accompanying the spectrum to be auctioned off early next year. The goal would be to allow consumers to have more choice.

From the story, quoting Martin:

"Whoever wins this spectrum has to provide ... truly open broadband network -- one that will open the door to a lot of innovative services for consumers."

What this would mean in practice: "You can use any wireless device and download any mobile broadband application, with no restrictions," Martin explained. The only exceptions would be software that is illegal or could harm a network.

The CTIA wireless trade association issued a statement that took particular offense to a statement in the article that said very few phones had Wi-Fi today -- an example on how things were not moving very fast.

"Contrary to what was reported in the media, many wireless providers are offering Wi-Fi-enabled devices, and consumers are purchasing and using those devices across the country, not just at company-branded hotspots. In fact, wireless consumers today have access to more than 700 different wireless handsets," said CTIA President and CEO Steve Largent.

So the question is, will it make the spectrum less valuable (and, therefore, less expensive) if the rules to make it more open are implemented?

AT&T, Verizon Wireless, Sprint Nextel and T-Mobile USA argue that they get to dictate the traffic, the services and the handsets because they took on the risk and the cost to build out the network.

Will companies still be willing to pay top dollar for this spectrum? Will they still be able to make a return in this more open environment?

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Tricia Duryee
Tricia Duryee
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Angel Gonzalez
Angel Gonzalez
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Kristi Heim
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