In February of 2006, the House of Representatives voted 216-214 for traditional analog television broadcasters to clear the 700 MHz spectrum by Feb. 17, 2009. George W. Bush signed the proposal into law, and the government’s plan to transition traditional analog television broadcasts into a pure digital signal is now in motion.
For those of you who are confused, let me try and clarify. The 700 MHz bandwidth is a section of the radio frequency airwaves known as the ultrahigh frequency spectrum, or UHF. This spectrum is used to carry analog television channels 52 to 69. Because of the scarcity of the radio airwaves, the government has the ability to control and enforce rules on how it will be used. Since the availability of the spectrum is rapidly depleting, the government wants to transition from traditional analog broadcasts to the highly efficient and compact digital signals.
With the 700 MHz spectrum cleared, the government is holding an anonymous open auction known as Auction 73 in January of 2008 to sell off this newly available resource. The spectrum has been divided into sections A through D, with a portion of the spectrum left open for public safety, including police and fire department usage.
The auction is open to anyone who can afford the minimum $4.6 billion reserve price for one of the available sections or licenses of the spectrum. The minimum for all licenses will be $10 billion. Although the government will not stop any single buyer from buying all of the licenses, chances of a monopoly are highly unlikely due to the high costs of governmental infrastructure requirements. The most sought after license up for bid is the 22 MHz C section. This big chunk of the spectrum travels very long distances and can therefore lower infrastructure costs.
Google Inc., which has expressed open interest in bidding for a part of the spectrum, has also championed four open network requirements, including open network, open service, open device, and open applications. An open network will give the consumers the ability to choose which device they want to use, forcing innovation and competition among the companies involved. However, the Federal Communications Commission’s ruling in July only approved the open device and open application requirements. This is a bittersweet ruling for both open network champions and those ignoramuses who support a proprietary network.
Nobody except Google really knows what they want to do with this portion of the valuable spectrum. However, I speculate that they might attempt to provide free nationwide Internet or a platform for open source devices to connect to the Internet. Hoping that Google sticks to its core mission statement of “organizing the world’s information and making it universally accessible and useful,” I can only hope that if Google wins the auction, it will advance the industry and promote innovation.
Others bidding for the spectrum include giant telecoms such as Verizon, AT&T and T-Mobile, although they oppose the auction in fear of losing control over the cellular market. More importantly, other major silicon valley corporations such as Yahoo!, Apple Inc., Intel and possibly Skype all can benefit from owning the licenses for this spectrum.
What will companies do with this spectrum? One possibility that looks very promising, especially with the recent demise of municipal Wi-Fi, is the pairing of Intel’s upcoming WiMAX wireless broadband technology with the 700MHz spectrum. This would allow users to bypass current final-mile Internet service providers and ultimately make Internet access more universally accessible and affordable.
While I can speculate all day about what these companies will do with the licenses, the tremendous growth of users and importance of the Internet will almost guarantee that come next year, the Internet will become dramatically more accessible.