A swath of public airwaves goes on the block today in a multibillion-dollar auction that could change the landscape of the nation’s cellphone and high-speed Internet businesses. It could also have major implications for long-underserved rural communities.
Up for sale is 62 megahertz of the 700-MHz spectrum, considered beachfront property for wireless services because its wavelengths can travel far and easily penetrate buildings. Today’s cellphone networks reside on higher frequencies, resulting in sometimes spotty coverage or no coverage at all.
The 700-MHz spectrum currently carries analog television signals, being freed up because TV broadcasters must move to all-digital transmission by February 2009.
The release of the spectrum could lead to the creation of a nationwide wireless broadband network that would compete against cable Internet and DSL, or digital subscriber line, experts say.
Among the 214 companies registered to bid are telecommunications giants AT&T and Verizon, which could use the spectrum to launch a 4G, or fourth-generation, wireless network that offers faster download speeds and fewer dead spots than existing networks.
Other registered bidders include Google, Douglas County-based EchoStar Communications and Microsoft co-founder Paul Allen’s Vulcan Spectrum.
“We’re running out of conventional wireless space,” said David Farber, professor of computer science and public policy at Carnegie Mellon University. “Using current technology, it’s hard to find space, so the release of this spectrum is very important.”
Several rural phone companies in Colorado also have registered to bid. Experts say they can use the licenses to launch wireless broadband to replace traditional DSL, which runs through copper phone lines.
“For them, it may be more efficient, because of the long loop of copper, to use this for broadband,” said Scott Chand ler, managing partner of Franklin Court Partners, a telecom consulting firm in Littleton.
Or they can launch a cellphone service on the spectrum, which could be less expensive than offering a service on an existing cell network because fewer base stations would be needed.
The Federal Communications Commission will auction the spectrum in five blocks, A through E. The highly coveted C Block covers 22 MHz, offering more capacity than the others, which range from 6 MHz to 12 MHz.
The minimum bid on the C Block is set at $4.6 billion. It includes an open-access rule that requires the winner to allow the use of any device or application on the network.
“They can’t force consumers to use a particular set of devices, similar to the way the current operators operate now,” said Francis Sideco, a senior wireless analyst with market- research firm iSuppli.
The open-access provision was pushed for by Google, which some speculate may now be content to lose because building a network isn’t the company’s core business.
“Either they’re going . . . to resell that spectrum to somebody else who’s really good at building out networks, or they’re in it to lose it,” Sideco said.
Potential partners for Google could be T-Mobile or Sprint Nextel, which aren’t registered for the auction.
A public-safety spectrum is tied to the D Block.
The E Block has one-way- transmission rules that could interest Qualcomm, Sideco said. The company could use the license to bolster its MediaFLO venture, which has technology that streams video to mobile devices.
The E Block has a minimum bid of $900 million.
Chandler said EchoStar may use a license to launch a wireless broadband service to complement its satellite-TV service, Dish Network. A company spokesman declined to comment.
The auction could take weeks because it doesn’t end until bids stop rolling in. The names of the bidders won’t be disclosed.
The spectrum won’t be cleared until February 2009.
“The earliest you can be offering services on this is the end of next year,” Chandler said.
Andy Vuong: 303-954-1209 or avuong@denverpost.com
Who’s bidding
Colorado companies registered to bid on the new portion of the 700-MHz spectrum:
• EchoStar Communications
• Blanca Telephone Co.
• Eastern Colorado Wireless II
• Farmers Telephone Co.
• N.E. Colorado Wireless Technologies
