MaximumPC 2008 03

quick start THE BEGINNING OF THE MAGAZINE, WHERE ARTICLES ARE SMALL

A

s this issue hits newsstands, compa-

nies will begin bidding on a section of

the 700MHz spectrum that had previously

been used by analog TV. This auction,

however, has engendered much more

media interest than past FCC auctions, in

part because of the spectrum’s features

but also because of the companies partici-

pating in the sale.

THE SPECTRUM

The section of the 700MHz spectrum the

FCC is auctioning off is composed of fi ve

different blocks. Of these, the A, B, and

E blocks are further divided into smaller

regional areas. These sections of the spec-

trum are of most interest to regional carri-

ers hoping to fi ll out their networks. Unlike

the other blocks, the D block is being sold

as a single, nationwide license; however,

there is one caveat: The spectrum must be

given up to public safety offi cials in times

of emergency. Allen Nogee, a principal

analyst at In-Stat, explains that “this makes

the license most attractive to a big operator

that can use other spectrum if the D block

has to be given up.”

The most attention, though, has been

paid to the C block, which is divided

into 12 regions. The C block is valuable

because it has much stronger penetration

than traditional cell signals and because of

the FCC’s acceptance of open access rules

that Google fought for, assuring that the

spectrum will be open to essentially any

type of device from any manufacturer.

THE PLAYERS

Nogee believes only a handful of the

100-plus bidders are serious competitors

for the C block. Of them, Verizon, Google,

and AT&T are at the top of the heap, with

Verizon having the best chance of winning.

The company’s new policy of glasnost ,

after a long period of Soviet-style suppres-

sion of its network—going so far as to strip

features from handheld devices—suggests

a serious change in its business model.

Verizon appears to be moving toward build-

ing market share by opening its network to

an array of devices.

While Google will take part in the auc-

tion, it may have already gotten exactly

what it wants. The company generates

revenue primarily through advertising,

and whether it wants to spend the money

to build up a wireless network is unclear.

Nogee thinks Google would be hard-

pressed to create a national voice or data

network and believes the company is not

particularly interested in being in the ser-

vice business. Instead, it would be happy

to get as many devices as possible on the

spectrum to drive adoption of the com-

pany’s search engine and online apps.

AT&T recently purchased spectrum in

the 700MHz band from Aloha partners for

$2.5 billion, so instead of competing for

the C block, the wireless giant may fi ll out

its network by purchasing smaller, regional

licenses. Nogee also thinks AT&T might be

interested in the D block; since the company

already owns some of the 700MHz spec-

trum, it can give up the D block in times of

emergency and continue to operate.

THE OUTCOME

Regardless of who wins the C block auc-

tion, it will be some time before consum-

ers benefi t from any change. Building the

necessary infrastructure will take several

years, and hardware manufacturers will have

to design devices that can operate on the

network. The winning bidder, however, must

provide coverage to at least 40 percent of

the population within four years, and at least

75 percent of the population within 10 years.

The biggest benefi t

will be the poten-

tial for nationwide

wireless broad-

band, giving

customers an

option other than

DSL or cable.

Also, since the

spectrum will be

opening up inter-

nationally over

time, there is the

possibility the C

block could pro-

vide worldwide

coverage.

700MHz Auction Underway

Spectrum may provide

consumers with a new

broadband option

The 700MHz spectrum being auctioned off has been divided into five different blocks. The 12 sections of the

C block are expected to receive the highest bids.

08 MAXIMUMPC | MAR 08 | http://www.maximumpc.com

REVISED 700MHZ BAND PLAN FOR COMMERCIAL SERVICES

The blocks shaded above in light gray (Lower 700 MHz Band C and D Blocks and Upper 700 MHz Band A and B Blocks) were auctioned prior to Auction 73.

A

CH.

52

CH.

53

CH.

54

CH.

55

CH.

56

CH.

57

CH.

58

CH.

59

CH.

60

CH.

61

CH.

62

CH.

63

CH.

64

CH.

65

CH.

66

CH.

67

CH.

68

CH.

69

B C D E A B C C A D Public SafetyB C A D Public SafetyB

Lower 700MHz Band

(TV Channels 52-59)

Upper 700MHz Band

(TV Channels 60-69)