$4.7B Wireless Spectrum Bid Triggers Open Network Mandate

The Federal Communications Commission received a US$4.7 billion bid for Block C, a swatch of spectrum being auctioned that is mandated to operate as a national wireless network that works with any mobile device.

The auction started on Jan. 24, but the FCC won’t announce which company submitted the bid until after the auction closes at a yet-to-be-announced time. Until then, the only information available is the amount of the bid.

Auction winners, however, receive a 10-year license, and the opportunity to renew indefinitely unless they fail to meet the minimum build requirements.

In the meantime, 214 companies from around the United States continue bidding on more localized spectrum allotments. Companies that win one of the 1,099 licenses will have flexibility to push commercial services, private radio needs or other new digital and wireless technology such as mobile TV broadcasting or two-interactive data, according to the FCC.

What You Buy

The auction is for the 700 MHz spectrum, which has been used by UHF broadcasters. That will change when the digital television switch comes. The government — as part of the 1996 Telecommunications Act — decided to auction off the spectrum and use the money to help balance the budget. Twelve years later, the digital TV switch looms and the FCC decided now was the time sell.

The FCC took those licenses and broke them down across region and lumped them together in blocks, which were divided into the 698-746 MHz called the “Lower Band” and 747-806 MHz called the “Higher Band.”

The auction is to purchase the spectrum in the Lower A, B and E and the Upper C and D. Other than the national Block D, the auction affords smaller companies the opportunity to bring next-generation, digital services to areas that have — in the past — been overlooked initially by larger institutions.

Block A and E licenses are called “Economic Areas,” which are defined by economics instead of geographic borders.

Block B licenses are called “Celluar Market Areas,” which are cities and smaller, rural areas.

With licenses in either Block A, C or E, regional companies could begin rolling out high-end digital services such as mobile television, WiMax or advanced voice services, some of which may not have reached areas years because it’s not cost-effective for larger companies to build out their infrastructure, said Arthur Giftakis, vice president of engineering and operations, Towerstream, a Middletown, R.I., wireless provider.

Block C

Block C attracted the most attention for two reasons: It’s the only license of the five that can easily create a national network, and the FCC mandated that its architecture be open, which means any company can develop hardware to run on it.

The Block C licenses are called “Regional Economic Areas Grouping,” which divides the country into 12 distinct markets that are closely tied to geographic borders.

The issues with Block C is that there is currently no hardware set up for the 700 MHz spectrum, so whichever company has the winning bid will need to partner up immediately with consumer electronics manufactures. If the company can’t launch quickly, the government could revoke the licenses.

“The FCC is really trying to help get these digital data services rolled out across the country, and Block C is the very important for that,” Giftakis told the E-Commerce Times.