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Open-access conditions now apply to the valuable wireless band

A recent bidder on the FCC's 700MHz "C-block" of frequencies broke the reserve price of $4.64 billion -- meaning that the open-access rules pushed for by Google will now become mandatory. A bidder in the auction made an offer of $4.74 billion for the C block in the 17th round of bidding this morning.

Whether or not this bidder is a veteran wireless company such as AT&T or Verizon rather than the rogue entry Google is unknown -- all identities are kept private by the FCC until the end of the auction -- but given Verizon's previous reaction to the open-access rules, the potential candidates are limitted.

Google previously announced its intention to make a solo bid on the range of frequencies -- presumably to establish a wireless network for phones based on its wireless operating system, Android -- but with the reserve price met and the open-access rules in full effect, Google may prefer to enjoy the benefits of the open-access regulations without being forced to pay the cost of building its own network on top of the purchase price for the spectrum.

As seen on the FCC's website, bidding has presently stalled at the $4.71 billion mark. No bid was made during the 18th round for the "50 States" eight-license package. Bids will continue to be accepted until the FCC decides that "activity has stopped" for the auction.

The 700MHz spectrum is of particular interest due to the frequency's ability to travel long distances with relatively low power, as well as pass through thick walls and other obstructions with relative ease compared to current higher-frequency bands.

In addition to the possibility of greater coverage for mobile phones, the nature of the 700MHz spectrum could be used for Internet connectivity in areas currently limited to dial-up or satellite access, both of which suffer from bandwidth and latency problems.

The FCC is also auctioning four other spectrums.  The total bid amounts of these five spectrums hit $12.79 billion at the time of publication. 

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One thing I don't understand
By InternetGeek on 1/31/2008 2:25:34 PM , Rating: 2
is why is/was the FCC actually selling the spectrum. I would think they are more interested in renting/leasing it so as to have a constant income. They'd charge a small fee to all operators who'd be free to compete in an open space for the biggest market share.




RE: One thing I don't understand
By FITCamaro on 1/31/2008 2:33:27 PM , Rating: 2
A good point. But likely service providers wouldn't be too happy to have to constantly pay a rental fee for usage of the spectrum. It would also drive up costs for the consumer since the companies would have a constant cost to maintain their network on top of the already high cost.


RE: One thing I don't understand
By Murst on 1/31/2008 2:36:32 PM , Rating: 2
There is already a license fee, in addition to the large initial bid required.

However, the license fees are pretty small.


RE: One thing I don't understand
By AlvinCool on 1/31/2008 2:37:42 PM , Rating: 3
Well lets see the government can't run a pension plan or package delivery as well as a business. What would inspire someone to think they could manage, or even rent, wireless space?

So it's best they sell it


RE: One thing I don't understand
By eye smite on 1/31/2008 3:38:58 PM , Rating: 1
Hehe, you don't think there will be yearly monthly tax charges by the FCC like there are right now on your house phone? You don't have a long distance carrier on your house phone it's a $2.55 a month fcc tax on your bill. If you have long distance they tax the carrier a smaller amount but they still get the tax money and that's on a hard line. lol

Come on man, think about it, it's the FCC of course they're going to keep making money off the 700mhz band.


RE: One thing I don't understand
By Sahrin on 1/31/2008 6:37:55 PM , Rating: 3
Because build-out for a nationwide wireless network would be between $1-5 billion dollars. Why would a company invest ~3B USD into a network that operates in a medium they don't own? What's to prevent future entities from evicting the company, which has invested billions in a network that can only operate at 700Mhz?

If it wasn't a straight sale, no one would buy in - no one would invest capital in building a network that might not exist later (that's bankers and investors, who invest in an enterprise based on risk/reward assessment).


Round 19 is over
By Murst on 1/31/2008 2:35:09 PM , Rating: 2
No bids were made in round 19 either on the C block.

I wonder if google will be stuck w/ it...

I'd actually prefer that probably... it would suck to see a teleco end up w/ the C block.




RE: Round 19 is over
By KristopherKubicki (blog) on 1/31/2008 3:20:03 PM , Rating: 2
Many of the telcos promised they'd bid on the other spectrums -- so it's hard to say.

From a Google perspective, it almost doesn't matter at this point. Mandatory open access means Google will get involved with it one way or another. :) Smart move!


RE: Round 19 is over
By HaZaRd2K6 on 1/31/2008 3:37:51 PM , Rating: 2
I'm hoping I'm not the only one wondering this but did the $4.64B reserve price automatically guarantee open-access? Or was there some other caveat that I'm missing?


RE: Round 19 is over
By Murst on 1/31/2008 5:28:02 PM , Rating: 2
If the bidding gets over the reserve price, the bidder must accept the FCC rules and thus provide open access.

Since the reserve was met, we are guaranteed that the C block winner will provide open access (unless they somehow find a loophole in the rules or something).

BTW, round 21 is done and still no new bids. It appears that once the reserve was met, the other bidder backed out.

If the reserve was not met (and it may not be met for other sections of the 700 spectrum), the FCC will have the option of accepting the lower bid and still imposing restrictions, or, and probably more likely, removing some or all restrictions and reauctioning that block.


50-states eight liscense package.
By Xenoterranos on 2/1/2008 10:26:12 AM , Rating: 2
From the Article: "No bid was made during the 18th round for the "50 States" eight-license package."

It sounds like QVC is operating this auction!
Do you think the winner will be able to make flex-pay installments?

Geez, I want a google phone so bad I can hear it.




By tjr508 on 2/1/2008 11:06:58 AM , Rating: 2
So do I. Maybe they can listen in on the last two years of my conversations to see what adversisements suit me best.
/end sarcasm


All I can say about this is...
By aharris on 1/31/08, Rating: 0
"If a man really wants to make a million dollars, the best way would be to start his own religion." -- Scientology founder L. Ron. Hubbard










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