FCC’s 700 MHz Wireless Auction Set to Begin
Thursday, January 24th marks the start of the Federal Communications Commission’s long-awaited auction of 700 megahertz of radio spectrum bandwidth. It’s some of the most valuable spectrum ever to be made available to the commercial wireless industry - the communications equivalent of “beachfront property” - and the last radio spectrum to be offered for the foreseeable future.
The auction is expected to generate more than $10 billion in revenue for the federal government. The FCC-approved list of 214 bidders includes big wireless telephone companies Verizon Wireless and AT&T, search engine giant Google, satellite broadcaster Echostar Communications and a venture backed by Microsoft co-founder Paul Allen. The spectrum will become available as television broadcasters convert from analog to digital transmission.
The auction, which could take weeks to complete, could tell us a lot about the future direction of wireless in America and just how “open” or “closed” the mobile Internet will be. Google has entered the auction – where the minimum bid for a key nationwide block of spectrum is $4.6 billion – because it says it wants to “put our money where our principles are” in advocating for more choice and competition in the wireless world. Verizon has already announced that it will begin to allow customers to use non-Verizon devices on its network.
Some observers think Google will be “bidding to lose” – since, by entering its minimum bid, the company has already forced the major phone companies to abide by FCC auction rules which require them to open their networks to new hardware and internet applications. The reasoning is that Google has no real desire to own and operate a new wireless telephone network, which would cost additional billions to implement. But not everyone counts Google out. It’s not over till it’s over.
Whoever wins, the auction raises questions: what will be the rules in this expanding wireless universe? Will the wireless internet of the future more resemble current cell phone services – with providers largely controlling what’s on offer – or will it be truly open to all devices, applications and content? Will innovators and entrepreneurs be able to develop new devices and applications for the wireless internet as freely as they have for fixed wire broadband?
Open MIC will be addressing those questions on March 11 at a breakfast forum - “Wireless America: Closed or Open?” – that we’re co-hosting with the Paley Center for Media in New York City. It’s likely to be a provocative session. If you’re interested in attending, send us an email or register here via the website.
Meanwhile, the auction process is likely to be lengthy and complicated: there are five blocks of licenses - labeled from “A” to “E” – with a total of 1,099 in all. The various blocks have unique characteristics, valuable to different bidders for different reasons. The government will be posting results of the bidding on a daily basis but won’t disclose the identity of the bidders, and bidders are forbidden to discuss the process publicly. Stay tuned.
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Shareholders of AT&T Inc. have filed a proposal calling for the company “to publicly commit to operate its wireless broadband network consistent with network neutrality principles” that would maintain open access to the Internet on wireless networks.
The filing comes only weeks before implementation of new Federal Communications Commission rules on network neutrality that provide a broad exemption for wireless broadband networks – the fastest growing segment of the Internet.
Here's the complete text of a proposal introduced by AT&T shareholders for consideration at the company's annual meeting in April 2012.
The senators advocate for a shareholder opportunity to "tell corporate boards that net neutrality is an important issue and telecommunications companies should ensure equal, nondiscriminatory access to all content on their networks."