Going Cellular » 700 MHz Spectrum

Verizon responds to Google’s accusations

Joe P — Wed, 07 May 2008 12:30:47 +0000

It didn’t take long for the nation’s No. 2 wireless carrier to respond to accusations by Google. The Internet giant, which was essentially Verizon’s only competition for the C Block of the 700 MHz auction — even though Google was a token participant — claims that Verizon plans to ignore the open access provision attached to that block. Google wants the deal blocked until Verizon promises to completely uphold the agreement. Verizon responded yesterday, and were economical with their words.

“This looks like sour grapes,” said Jeffrey Nelson, a Verizon Wireless spokesman. “What a surprise, Google submitting yet another regulatory filing. We knew the rules of the auction before bidding and winning spectrum, and of course we’re going to abide by those rules.”

I’m not sure how it’s sour grapes. By all observable evidence, Google didn’t have serious intentions to win the C Block. Yes, they’ll tell you, they bid the reserve price of $4.6 billion, which is no chump change, even to them. But they had to have known that Verizon would top them. And if they didn’t, I’m sure Google could have figured out how to recoup the investment.

To me, it sounds more like they’re trying to open up all possible avenues for their Open Handset Alliance. Android should be debuting later this year, and the more places it’s available, the better off Google will be.

Still, it will be tough to judge any of these accusations until Verizon is actually able to utilize the spectrum, which won’t be until February 2009 at the earliest. All indications, however, point to a much longer wait, as they plan to use it to fuel their 3G LTE network, which will take a bit longer to get up and moving.

What to do with the D-Block?

Joe P — Fri, 18 Apr 2008 12:30:13 +0000

While there’s been much talk lately about what happened in the 700 MHz auction, the parts about the vacant D-Block have been relegated to back page status. Apparently, the benefits of creating a public safety network isn’t sexy enough to make headlines. The original idea was to have the winner of the D-Block spectrum help public safety officials build out a comprehensive communications network. Their reward would be the commercialization of any remaining spectrum. Apparently, that wasn’t incentive enough. While there was some early action in D-Block bidding, it never met the reserve price. In questioning the auction, Congress is wondering what it can do to facilitate the sale of this spectrum.

The most prevalent alternative suggested is to auction off the D-Block without restriction. The money raised would then be earmarked for public safety, so that they could build their own network.

However, Harlin McEwen, chairman and CEO of the Public Safety Spectrum Trust, believes that the original public-private model is best, despite the auction results. He’s not alone.

“While we must learn from the recent auction experience, NENA remains convinced that a public-private partnership between the commercial D-Block licensee and public safety is currently the most viable option for funding and deploying a national interoperable broadband network for public safety,” said Jason Barbour, president of the National Emergency Number Association. “We encourage the FCC to move forward diligently while ensuring that public safety’s need for an advanced next generation wireless broadband network is realized.”

FCC Chairman Kevin Martin is also of this thinking, as is Commissioner Michael Copps. They want to rework the D-Block auction with different approaches to the “reserve price, build-out and service requirements and network-sharing agreement guidelines.”

If they do, however, choose to go with the Congressionally-suggested alternative, I pray that they keep Verizon and AT&T out of it. No reason to allow them to get even more spectrum.

Verizon, AT&T announce 4G intentions

Joe P — Mon, 07 Apr 2008 12:57:50 +0000

So what’s going to come of the massive blocks of 700 MHz spectrum bought up by AT&T and Verizon? I, among many other in the industry, tried to find that out during CTIA last week. But the FCC would have none of it. Their anti-collusion rules, which prevent participants from talking about the auction, expired just after the show ended. So the big boys could make announcements on their own terms. The good news: Both AT&T and Verizon plan to use the spectrum to launch their high-speed 4G networks. The bad news: It’s going to be a while before we see anything.

AT&T says that it has a quality spectrum holding, with their swath of B-Block spectrum combined with what they bought from Aloha. And they’re totally happy that they didn’t get in on the C-Block. From Ralph de la Vega, president and CEO of AT&T’s wireless unit:

“With fewer costly and complex regulations, we have the certainty and flexibility needed to move faster in rolling out new mobile technology and more customer choices in devices and applications,” de la Vega said.

Verizon Wireless has similar plans for their spectrum. They, too, plan to use it for LTE, or Long Term Evolution, the fourth generation network type which most if not all carriers are expected to use. It is GSM-based, meaning Verizon is separating from its CDMA roots. However, the convergence of mobile technologies will likely spur innovation, since handset makers should no longer have to make two of the same device, one for GSM and the other for CDMA.

Verizon Wireless President and CEO Lowell McAdam said: “We now have sufficient spectrum to continue growing our business and data revenues well into – and possibly through – the next decade, and this is the very best spectrum with excellent propagation and in-building characteristics. We also believe that the combination of the national, contiguous, same-frequency C Block footprint and our transition to LTE will make Verizon the preferred partner for developers of a new wave of consumer electronics and applications using this next-generation technology.”

Let us not forget Google, who confirmed our hunch by stating that they were only in it to “trigger the openness conditions”. This saddens me a bit. Their openness provision effectively kept AT&T out of the C-Block, allowing Verizon to snatch it up with little, if any serious competition. In turn, AT&T bought up smaller blocks that could have benefitted regional cell carriers.

Estimates on when LTE will roll out vary, but late 2010 seems the most optimistic forecast. More realistically, we’re looking at a project for 2011 and 2012.

AT&T: Too much regulation on spectrum auction

Joe P — Fri, 04 Apr 2008 15:30:22 +0000

Here’s something I didn’t know before talking to a few industry folk at CTIA: The anti-collusion rules set in place by the FCC expired right after the show ended. Clearly, this was to cut off people like me from asking questions. Not that I minded. After all, the trade show wasn’t about the 700 MHz auction. It was about the industry as a whole, and although the auction has become a large part of it, I can understand the desire to keep it from being the sole focus. In any case, the rules are now lifted, and it appears that AT&T wasn’t too happy with the open-access restriction put on the C-Block, on which it did not bid.

AT&T spent $6.64 billion for licenses in the 700-megahertz band auction but avoided licenses in the consumer-friendly “C block” because of the additional regulatory requirements, said Ralph de la Vega, chief executive of the wireless unit.

“The auction worked well … but it highlighted that people put a premium on spectrum that is not encumbered by heavy regulation,” said de la Vega in a conference call with analysts and reporters.

While I can understand why AT&T shied away, I think de la Vega completely misses the point here. People, as in consumers, don’t put a premium on unregulated spectrum. Far from it. Unless, of course, by “people” you mean “wireless carrier executives.”

At this point, this has nothing to do with the people. The people didn’t decide on the regulation, the people did not bid in the auction, and the people have not seen the services offered pursuant to the newly acquired spectrum (nor will they until at least February, 2009).

I didn’t hear the rest of the call, so I can’t comment on anything that de la Vega might have said. But to me, the restrictions didn’t work because of the alternatives available. AT&T could eschew the larger C-Block spectrum because it already bought spectrum from Aloha Partners. Google wasn’t really interested in the first place, as they made apparent during the auction. So that left Verizon with an essential monopoly on the block.

This also hurt smaller companies, since AT&T bid on smaller licenses. With large chunks of 700 MHz spectrum already in place, they had little need to buy up the C-Block, restrictions or not.

Honestly, I think that AT&T’s acquisition of Aloha was more problematic for the auction than the open-access restrictions. It left the serious competitors for the C-Block to one, and we know that things can get a bit screwy when one company has the control. The Aloha acquisition also caused many smaller companies to lose out on the A- and B-Blocks, since AT&T could easily out-muscle them.

Yes, the open-access restriction proved to not be all it was billed to be. But to place the blame solely there is to forget AT&T’s part in lessening the competition.

Frontier Wireless readying to compete with big telecoms?

Joe P — Tue, 25 Mar 2008 15:27:03 +0000

Check out this map of the E-Block of the 700 MHz auction. Notice that one company basically acquired a nationwide license. If you zoom into the legend in the bottom left corner, you’ll see that it’s Frontier Wireless. If you haven’t heard of the company, you’re not alone. It’s actually a company set up specifically to bid on the auction. It belongs to EchoStar, the satellite TV company that owns the DISH Network. So while AT&T and Verizon dominated the B- and C-Blocks, Frontier snuck in and mopped up the E-Block, which is said to be ideal for streaming TV. Gee, I wonder what their intention is?

Will at IntoMobile speculates on the mobile TV idea. And he’s not alone. It looks like industry analysts are coming to that conclusion as well.

Pacific Crest Securities analyst Steve Clement says that, “The assumption you’d make is that they’d set up some sort of mobile TV service.” And, Citi analyst Jason Bazinet noted that Dish Network stated in February that they may just “expand into mobile and portable video, data and voice services.”

This is also discussed at TMCnet, where Narayan Bhat talks about Frontier’s possible foray into major mobile competition. If they’re going to offer streaming mobile TV, they might as well look into voice and other data services. After all, it appears that people prefer having one device to many. Hell, I still feel awkward carrying around my iPod and my BlackBerry.

The question, I suppose, is whether launching a voice service over the E-Block is a feasible endeavor.

Some 700 MHz facts for Monday

Joe P — Mon, 24 Mar 2008 12:54:14 +0000

As I talked about on Prepaid Reviews on Friday, the winners of the 700 MHz auction were revealed. As expected, Verizon and AT&T absolutely dominated. They were responsible for roughly $16 billion of the $19 billion bid in the auction. The rest went to the smaller players, including some satellite TV companies looking to take their signal to a mobile platform. Alltel, the nation’s fifth largest cell carrier, was shut out of the bidding, as was prepaid carrier Leap Wireless. Another prepaid provider, MetroPCS, picked up one lonely license. So who else won?

It appears, actually, that Verizon didn’t win all of the C-Block. No, AT&T wouldn’t let that happen, as they put up $1.6 billion to take the Mississippy Valley region of the spectrum. I’m not sure what that means, or if Verizon even really cares. They surely got their $9 billion worth.

Qualcomm picked up some E-Block to beef up their MediaFLO offering. Not sure exactly how that’s going to help, but I’ll defer to Qualcomm’s judgment. Cable companies Cox and Cablevision, as well as satellite provider EchoStar, got some licenses in the A-Block. Mobile TV ahoy! Not that I’m really interested in that. Are you?

Unexpectedly, oil company Chevron racked up a decent portion of spectrum across the North and Midwest. What do they plan to do with it? Your guess is as good as mine. Oil. Radio spectrum. Oil. Radio spectrum. Nope, nothing coming to me yet. Maybe if I try some other sort of association…

I’m sure we’ll read plenty more about the winners and losers of this in the coming days. I wonder if there was anything stranger than Chevron winning spectrum.

Could 700 MHz spectrum open the iPhone

Joe P — Mon, 18 Feb 2008 16:36:00 +0000

There’s an interesting article over at Trading Markets which discusses the implications of the open-access C block of the 700 MHz spectrum on the iPhone. It actually quotes Greg Sterling, who I had the pleasure of speaking to regarding mobile advertising. It’s something I certainly can’t do justice by summing up in this space. So I definitely suggest you go check out what Greg and others have to say about exclusivity and open-access. But for the time being, I’m going to add my own thoughts to this debate.

It’s pretty much assumed that Verizon has the leading bid for the 700 MHz spectrum. This is because 1) Google has all but said they’re out, and 2) We haven’t seen the spectrum being bid up. If AT&T wanted a piece of it, it would make sense for them and Verizon to continue pushing up the bid. But it’s been rather stagnant since it crossed the $4.6 billion reserve mark.

Then you have reports that AT&T is bidding on smaller regional licenses to fill out the 700 MHz spectrum it acquired from Aloha Partners. So in all likelihood, Verizon will be the company providing open access on the 700 MHz spectrum. Since the rules dictate that this is open to any device, well, the iPhone is certainly the first thing to come to mind.

Yes, there are compatibility issues, not to mention the five-year exclusive deal between AT&T and Apple. But if those issues are surmountable, we could see the iPhone in more ubiquity come 2009.

However…

Everyone interviewed in the article kind of danced around this issue, so I’d like to come out and say it. The open-access provision could, and likely will, provide us with a phone that is better than the iPhone. Actually, I’d bank on several such devices. Remember, we’re currently limited by what the cell phone carriers will let hit the market. But with open-access, we’ll see a number of devices that would have been shut out in prior times.

So yes, there will be much clamoring for the iPhone once we see a more open cell phone landscape. But I’m way more interested to see if developers can come up with something even better.

[Trading Markets]

700 MHz auction up to $11.6 billion

Joe P — Thu, 31 Jan 2008 16:30:46 +0000

The government was looking to raise $12 billion or so through the auction of 700 MHz airwaves. So they must be pleased to know that the bidding reached $11.6 billion at the end of the day on Wednesday. This includes all blocks — the A and B regional licenses, the coveted national C block, and the public safety D block. And yes, bidding is anonymous, so we don’t know who’s in on what. But we do know that despite the bid price, the C block hasn’t yet met its $4.6 billion reserve, which it was previously on pace to meet yesterday.

Here’s the problem. There are basically only three players for the C block: Verizon, AT&T, and Google. Over the summer, Google lobbied to have the C block come with an open access requirement. The FCC acquiesced, though Verizon formally complained about the restriction. They later dropped the appeal, and even launched an open initiative of their own.

But that doesn’t mean they’re any keener on dealing with this open access requirement. If the C block doesn’t hit $4.6 billion, the government can opt to scrap the auction and re-do it. This would carry fewer restrictions — i.e., no more open access.

AT&T is really standing back on this one, as they purchased C block spectrum from Aloha Partners earlier this year. While they’d still benefit from this C block, the pressure is not on them. They can outbid regional companies for A and B block spectrum, and wait for a re-auction of the C block, where they’d probably be competing only with Verizon.

Spectrum expert (whatever that means) Joe Norgaard has an interesting take on matters:

“Google may have to outbid itself to hit the reserve,” said Nordgaard. “But this spectrum is unbelievably valuable. The physics of it make it a once in a 50-year event to be able to get spectrum this valuable at these prices.”

That seems to be the most logical solution. Even if Google doesn’t want to build a network, they can still bid the reserve price. That will make the auction official. Since Verizon and AT&T will never see this valuable spectrum again if they don’t act, it’s likely that they’d get into the bidding. Google can then let them hash it out.

Yes, it’s a risk. They could be stuck with a $4.6 billion tab. But it’s a risk I can see panning out for them.

For more information on the spectrum auction, you can check out the coverage on Prepaid Reviews.

[Information Week]

Sprint, T-Mo in fight over “white spaces”

Joe P — Tue, 08 Jan 2008 14:40:59 +0000

So in addition to the 700 MHz spectrum, another broadcasting medium will become available in 2009. It’s the white spaces between the frequencies. We’re not totally educated on the topic, though we’ve read quite a bit about it over the past few days. Sticking with their M.O., Google wants these white spaces to be open to access from anyone. That is, they don’t want it to be licensed. Microsoft is with them on this one, but incumbents in both the broadcast and telecommunications industries aren’t so hot on the idea.

These white spaces would allow devices to connect to the Internet wirelessly, so it makes sense that outsiders like Google and Microsoft would push for their openness. Incumbents like T-Mobile, Sprint, CBS, and NBC would like to see licensing, citing the potential for “harmful interference to important incumbent operations.”

I’m figuring it’s really about the money involved. Both Sprint and T-Mobile aren’t bidding in the 700 MHz spectrum, and it would make sense for them to pick up some cheaper white space bandwidth. Not quite sure, though, why we’re seeing broadcasting companies back this initiative. They’ll have to surrender those white spaces along with the 700 MHz spectrum in 2009.

Of course, Google and Microsoft have foreseen these objections, and have taken measures into their own hands. They’re conducting tests to find a means for the white spaces to not interfere with broadcast signals. They’ve also given devices to the FCC which allow the commission to test matters for themselves.

[Market Watch]

A view of the 700 MHz auction

Joe P — Mon, 10 Dec 2007 14:34:53 +0000

Good read over at the LA Times today (though we found it in the Chicago Tribune) today, where Jim Puzzanghera and Jessica Guynn talk about how the 700 MHz auction will affect the wireless world. Sure, the winners will have a powerful spectrum on which they can deliver services to their clients. But it goes beyond that, into what kind of information will be sent over these airwaves.

Specifically, mobile Internet is the target. Puzzanghera and Guynn talk about something that’s been on our mind for quite a while: Trying to make the mobile Internet the same as the PC Internet. We’ve made a lot of strides in that regard, and having a more powerful spectrum will add to the movement.

“This auction potentially opens up mobile computing from something that’s very expensive and very limited to something that comes into everyday use,” said Harold Feld, senior vice president of the Media Access Project, a public interest law firm that has pushed for more open use of the airwaves.

This is also true, thanks to the open-access spectrum. Currently, only about 13 percent of U.S. cell users access the Internet from their mobile. This is compared to roughly 50 percent of Japanese cell owners who surf from their mobile. With more powerful means of conveyance and a more open platform, we could see a decrease in the cost of mobile web access, which will surely result in a spike in its usage.

“No matter which bidder ultimately prevails, the real winners of this auction are American consumers, who likely will see more choices than ever before in how they access the Internet,” Google Chief Executive Eric Schmidt said in a statement.

Yeah, and that, too.

[Chicago Tribune]