More companies are 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 participating in the sale.

The section of the 700MHz spectrum the FCC is auctioning off is composed of five different blocks. Of these, the A, B, and E blocks are further divided into smaller regional areas. These sections of the spectrum are of most interest to regional carriers hoping to fill 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 officials 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.

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 new policy of glasnost, after a long period of Soviet-style suppression 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 building market share by opening its network to an array of devices. While Google will take part in the auction, 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 service business. Instead, it would be happy to get as many devices as possible on the spectrum to drive adoption of the company’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 fill 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 spectrum, it can give up the D block in times of emergency and continue to operate.

Regardless of who wins the C block auction, it will be some time before consumers benefit 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 benefit will be the potential for nationwide wireless broadband, giving customers an option other than DSL or cable. Also, since the spectrum will be opening up internationally over time, there is the possibility the C block could provide worldwide coverage.

Revised 700Mhz band plan for commercial services

Via: MAXIMUM PC, March 2008