NEW YORK--Federal Communications Commission commissioner Jonathan Adelstein joined tech policy pundits, entrepreneurs, and venture capitalists Tuesday to launch a new initiative aimed at making broadband a priority in the U.S.
The group, which calls itself InternetforEveryone.org, officially launched at Free Press' Personal Democracy Forum here. The main purpose of the new initiative is to help organize public support for a national broadband policy.
Vint Cerf, Google chief Internet evangelist; Tim Wu, Columbia University professor; and Jonathan Adelstein, FCC Commissioner, at the launch of InternetforEveryone.org.
(Credit: Marguerite Reardon/CNET News.com)Prominent figures in the tech world, including Google Chief Internet Evangelist Vint Cerf, as well as law professors Larry Lessig of Stanford and Tim Wu of Columbia were on hand with Brad Burnham of the venture capital firm Union Square Ventures and Robin Chase, founder of Zipcar, to join Adelstein in becoming members of the group.
Adelstein, one of two Democratic commissioners on the FCC, has been a big proponent of a national broadband policy for some time. During his introduction, he admitted has been frustrated with the current administration's lack of focus on broadband. But he said he hopes this initiative will help provide a forum to allow the public's voice to be heard in Washington.
"We need to mobilize the public to make broadband an issue in D.C., so that broadband penetration and pricing rises to the top of the agenda," Adelstein said in an interview following the press conference. "It's important for us to make sure that the public's interests are served. We've already heard a lot from the cable and phone companies."
Broadband advocates have long complained that the U.S. is falling behind other countries in its ability to offer high-speed Internet service at affordable prices to all of its citizens.
Josh Silver of Free Press said during the press conference that the U.S. has slipped from 4th to 15th in the world in terms of broadband penetration. And he said that half the country doesn't subscribe to high-speed Internet. He and others in the group said it was time for a national policy framework to be established to ensure that government helps make broadband more accessible to people throughout the country.
But not everyone agrees that the U.S. is lagging in broadband or that a comprehensive national policy is even necessary. Verizon COO Denny Strigl said at the NxtComm trade show in Las Vegas said last week that it was a "myth" that the U.S. lagged behind other nations in high-speed Internet.
"It's time to put this myth to rest," Strigl said during a keynote speech. "What the communications industry has achieved in deploying broadband and mobile services is tremendous. And we've done this not through industrial policy, but through private investment delivering innovation. The benefits have rippled through the entire economy creating millions of high-tech jobs and billions of dollars in value."
Indeed, comparing the U.S. with other countries with much smaller geographies and populations is a bit like comparing apples and oranges. In much of the U.S., people have access to not just one broadband provider but two. And as Verizon deploys fiber directly to consumers' homes and AT&T upgrades its network to offer faster broadband and TV service to its customers, those companies have forced their cable competitors in those areas to increase speeds and in some places even lower prices.
So in many parts of the country, broadband competition is working. But the problem is that the competitive forces aren't working uniformly throughout the country. There are still pockets of the U.S., especially in rural areas, where broadband is only offered by one provider or by none at all. And prices per bit are still much higher than they are in other parts of the world.
"People have just accepted that bandwidth is something that American families will spend hundreds of dollars on per month," Columbia professor Tim Wu said. "People don't realize how much we pay for how little bandwidth we actually get."
Wu likened the broadband market to the energy market, saying bandwidth is a commodity controlled by a tiny cartel of phone companies and cable operators. He said that prices have been inflated and kept high, which has kept many people out of the broadband revolution.
"I agree that for most of the country, access to broadband is not the issue," he said in an interview. "But I'd say beyond that, the market has stalled. We need to make America a leader in broadband pricing and speeds. The attitude that it's just 'OK' to have access to DSL isn't good enough."
Members of the new "Internet for Everyone" initiative believe that a national broadband policy can help. That said, the group didn't announce support for any particular legislation nor is it backing a specific broadband policy proposal. But members of the group seem to agree that the reallocation of wireless spectrum should be a major component to any national policy.
Broadband advocates had hoped that the recent 700MHz spectrum auction, which reallocated spectrum that has been used for analog TV signals, would lay the foundation for a third national broadband provider. But at the conclusion of the FCC auction, it was incumbents, such as Verizon Communications, that came out the big winners in the auction, gobbling up key national licenses for spectrum.
"I think the commission missed a golden opportunity in the 700MHz spectrum auction to ensure there would be a third pipe into the home for broadband," Adelstein said in an interview.
The FCC is currently looking at freeing up more spectrum that could be used by new entrants to create new wireless broadband services, he added. One proposal on the table from a company called M2Z proposes that the FCC open up 25MHz of spectrum that could be used to build a free wireless network. Under the plan, the FCC would give the company access to spectrum for free. The company would build the network and fund the service through advertising. As part of the proposal, M2Z planned to give the FCC 5 percent of its gross revenue from the service.
The FCC originally dismissed the proposal, mostly because it asked the commission to allocate spectrum for free. But now the commission seems to be reconsidering it.
"Right now we are contemplating opening up about 20MHz of spectrum for free wireless broadband," Adelstein said in an interview. "There is a business plan on the table, so we will have to see what happens."
Another option for the FCC is to open up "white spaces", or the spectrum bands left vacant between broadcast TV channels.
Several companies, including Google and Microsoft, have been working on prototype devices that demonstrate that wireless devices can work within these bands without causing interference. But the broadcast TV industry has been opposed to any use of "white spaces." Still, broadband proponents see it as an important asset to be used in expanding the broadband market.
"Spectrum liberation in our time needs to be a priority for any national broadband policy," Wu said. "And the 'white space' spectrum is a good way to do that. It offers a ton of bandwidth."
The Federal Communications Commission is considering a new plan that would require winners of an upcoming spectrum auction to provide free wireless Internet services.
The FCC could soon vote on a plan to auction off 25 megahertz of spectrum in the 2155MHz band of spectrum. As part of its plan, the commission would require the winner of those licenses to provide some free wireless Internet service.
The FCC sees the plan as a way to provide broadband Internet service to millions of Americans who either can't afford or don't want to pay for high-speed Internet access. Few details are known about what exactly the FCC is proposing, but word has it that it's similar to a plan proposed by M2Z Networks in 2006.
Under that plan, the FCC would give the company access to spectrum for free. The company would build the network and fund the service through advertising. As part of the proposal, M2Z planned to give the FCC 5 percent of its gross revenue from the service.
But the FCC didn't like that proposal, especially the part about giving spectrum away for free. So it's come up with its own proposal. Instead of giving away free spectrum licenses, it will auction the spectrum to the highest bidder and require the winning bidder to offer service on some its spectrum for free. The FCC will also require that the free service have content filtering in place to ensure that minors are not able to access adult Web sites.
Wireless service providers have traditionally opposed any stipulations imposed on wireless spectrum auctions. And the CTIA, the trade organization representing the industry, has already filed comments with the commission urging it not to put requirements on the spectrum.
"The commission should not require licensees to meet specific conditions, such as pricing plans, minimum data rates or content filtering," the CTIA wrote in a filing.
While the FCC's plan might be well-intended, I think it's unlikely that any company would spend the millions or even billions of dollars necessary to buy the spectrum, especially considering that it will take even more money to build and operate the network.
The advertising supported model sounds good on paper. But so far, it hasn't been proven to work. In fact, the failed citywide Wi-Fi projects all over the country have already proven that free wireless services don't work. EarthLink planned to only give some of its service away for free in some cities like San Francisco. But it offered "cheap" broadband in other cities. MetroFi built its whole business model on offering free Wi-Fi supported by advertising revenue.
EarthLink has since canceled plans to build its San Francisco network and now its dismantling networks in other cities, such as Philadelphia and New Orleans. Meanwhile, MetroFi is also looking for a way out of its citywide Wi-Fi business.
These companies weren't able to make the free model or even the inexpensive broadband model work, because networks are expensive to build and maintain. And unlike the bidders in this auction, these companies didn't have to pay for the spectrum they used to build the networks. I can't imagine many companies willing to make that kind of investment if they're required to offer even some of their service for free.
For this reason, I think it would be difficult for the FCC to find a bidder willing to take on the stipulations. This is exactly what happened in the most recent 700MHz spectrum auction. The FCC required bidders on the "D Block" of licenses to set aside a portion of that spectrum for public safety use. The only company even interested in the spectrum went out of business before the auction began, because it was unable to secure the necessary funding. In the end, the minimum bid on these licenses was never met, and the FCC is still trying to figure out how to rewrite the rules to attract bidders.
That said, the FCC has had some success in setting rules for new spectrum auctions. In the same 700MHz spectrum auction, the FCC required the winner of the C-Block licenses to build a network using this spectrum that is open to all devices and applications. Verizon Communications ended up paying $4.6 billion for the spectrum.
So in all fairness, the FCC may succeed in this endeavor. But ultimately, the success of this new plan will come down to whether or not the winning bidder will be able to come up with a business model that actually allows companies bidding on this spectrum to make money.
Google co-founder Larry Page was in Washington Thursday trying to strum up support to open unused broadcast TV spectrum to wireless devices.
Page came to D.C. to meet with Congressional leaders and the Federal Communications Commission to talk about allowing device manufacturers to design products that use spectrum known as "white space." This spectrum, which is in the 700MHz band of frequency, sits between analog TV channels and is not being used for anything more than a buffer between broadcast TV channels.
Google and other Silicon Valley companies have been lobbying the FCC and other lawmakers to free up this spectrum, which is ideal for sending data wirelessly over long distances and penetrating through walls. Some of the 700MHz spectrum has already been auctioned off by the FCC earlier this year. And companies such as Verizon Wireless, which won a big chunk of the spectrum, plan to use it to build a next generation wireless broadband network.
Page spoke in the morning at an event hosted by theWashington think tank, the New America Foundation. He emphasized that opening up the white space spectrum for unlicensed use could have a huge impact on the U.S. economy and economies throughout the world, if other countries adopted similar spectral policy. He also said that it made little sense for the U.S. to allow this resource to go unused.
"Spectrum isn't like water," he said. "If you don't use it, it's gone. You can't conserve it."
TV broadcasters have been the most vocal opponents of freeing unused analog spectrum. They contend that allowing wireless devices access to this spectrum could cause interference with some analog television broadcast channels.
Page argued that broadcasters are simply trying to keep the spectrum for themselves. And he said the fear of interference is overblown. He is convinced that radios can built that switch between different frequencies so that spectrum can be shared and interference can be avoided.
Currently Google has only five people working on the white space initiative, but if the FCC were to allow access to this spectrum on an unlicensed basis, Page said the company would pour hundreds of millions of dollars into figuring how best to use the spectrum.
Page highlighted the benefits of making more spectrum available, including using the unlicensed white spaces to extend the reach of Wi-Fi. Of course, Google also has its own motives for wanting more wireless spectrum in the market, and Page admitted the company's efforts were self-serving.
"For us 10 percent better connectivity in the U.S. translates into 10 percent more revenue," he said. "And that's a significant number for us."
Google wants reassurance from Verizon Wireless that it will comply with open access rules that were part of the Federal Communications Commission's recent 700MHz auction.
Verizon Wireless was the winning bidder in the auction of an important sliver of spectrum licenses in the 700 MHz spectrum auction, which raised a record $19.6 billion for the U.S. Treasury. As part of the rules of the auction, the winner of the C-Block licenses is required to allow any device to connect to the network and is also required to allow any application to be downloaded on devices that use the network.
Verizon, which plans to use the new spectrum to build its 4G wireless broadband network, initially opposed the open access rules. And once the rules were adopted, it filed a lawsuit with the U.S. Court of Appeals for the D.C. Circuit to find those conditions unlawful. It eventually withdrew its appeal after that court denied Verizon's request for an expedited review.
Google filed a petition with the FCC on Friday asking the agency to make sure that Verizon really plans to adhere to these rules before the FCC officially grants the company the licenses in the C-Block of the 700MHz auction.
"We want Verizon to acknowledge their responsibility to comply with the C-Block license conditions," said Richard Whitt, the Washington telecom and media counsel for Google who signed the petition. "In other words, we want them to live up to their side of the bargain. And we want their interpretation and implementation of the rule to be consistent with the spirit and intent in which the FCC adopted those rules."
Google, which also bid on the spectrum during the auction, was one of the main proponents of the open access rules and helped effectively lobby the FCC to include the rules as part of the auction.
Now that the auction is over, Google claims that it wants to make sure that Verizon will really comply with the rules so that software developers can begin working on new innovative applications. It wants Verizon to state publicly that it plans to adhere to all aspects of the open access rules, including a provision the company opposed in written and oral arguments to the FCC as well as in court papers filed with the U.S. Court of Appeals. Specifically, Google wants Verizon to say that it will allow any application to be downloaded on any device using the C-Block network.
Google contends that Verizon has argued previously that the rule should apply only to devices that consumers bring to the network and should not include devices that Verizon sells to its customers.
This reasoning appears to be similar to how Verizon has set up its Open Device Initiative, a program announced in November that will expedite the certification process for device makers to get new devices on Verizon's network. This program is separate from the 700MHz rules, but it could provide some insight into how the company interprets open access.
Whitt said that what Verizon is doing with the Open Device Initiative is commendable. He applauds the company's efforts to embrace openness as a business model, but he said that it's too early to tell if the initiative will live up to the rules that the FCC has mandated for C Block licenses in the 700MHz spectrum auction.
Verizon has not specifically said since the auction that it won't live up to its obligations under the rules of the auction. Whitt said that Google doesn't necessarily mistrust Verizon, but he said that the company is taking Ronald Reagan's advice to "trust but verify" that Verizon will do what's expected.
"We're not trying to delay the process," he said. "And we aren't trying to block Verizon from getting those licenses. What it comes down to is we want to make sure that Verizon Wireless acknowledges and accepts the conditions put on these licenses by the majority of the FCC."
According to FCC procedure, Verizon has an opportunity to file its reply to Google's petition within the next two weeks. A spokesman for the company said it would be doing that, but he didn't seemed alarmed by Google's petition.
"What a surprise," he said in an e-mail. "Google submits yet another regulatory filing to the Federal Communications Commission. Google's filing has no legal standing."
If Verizon responds to the petition and reiterates its position or decides not to address the issues, it will be up to the FCC to decide what it will do next. It is within the FCC's right to deny Verizon access to the licenses, Whitt said. But considering what is at stake, it's likely that won't happen. I'll be following this drama as it unfolds to see how Verizon responds.
Over the last few months, mobile operators have been falling over each other to profess their networks as "open," but a closer look at what they're really doing suggests they have a long way to go.
Traditionally, mobile phone operators have kept a tight grip on their networks. They have determined which phones could be used, what applications could be accessed, which features were enabled, and where subscribers could go on the Internet. But over the past year, Internet companies like Google and Skype have joined with consumer groups to lobby lawmakers and the Federal Communications Commission to force wireless carriers to loosen their restrictions and open their networks.
Amid threats of regulation and new legislation, operators have begun changing policies and introducing services that they claim makes their networks more open.
Earlier this week, FCC Chairman Kevin Martin applauded the industry's efforts toward openness, and said he would push to dismiss a petition filed last year by Skype that would require carriers to allow any device or application on their networks.
But for all the lip service being paid toward wireless openness, the reality is quite different.
Take Verizon Wireless' open device initiative as an example. In November, Verizon announced it was launching a program that supposedly would allow any device or application to be certified for use on its network. Device makers would be able to determine the features, applications, and services offered on the phones. They would create the user interface. Verizon would simply provide the network access.
For consumers, the benefit is the ability to choose from a more diverse set of devices and applications while still being able to use the Verizon Wireless network.
While this is a huge improvement over Verizon's traditional model, it does not constitute an entirely open network. The company still doesn't allow any device to connect to the network. Handset manufacturers still have to go through a certification process. In other words, if you wanted to use your old Sprint Nextel phone, which uses the same underlying CDMA network technology that Verizon's network uses, you couldn't.
Under this new model, Verizon still maintains control of which devices get on the network. This is completely different from how the traditional Internet operates. For example, Comcast and Verizon's DSL business do not certify laptops or any other Internet-enabled devices that connect to their broadband networks.
And it's this distinction that will likely draw criticism from open access proponents such as Google. Richard Whitt, Washington telecom and media counsel for Google, said in an interview with CNET News.com that he and his team are still evaluating Verizon's open device program, but it seems clear from his definition of "open access" that Verizon is falling short of expectations.
"Openness to us is akin to what openness is like on the Internet where any end user can attach any device or use any application, that is lawful, on the network," he said. "It allows innovation without permission."
Verizon executives argue that they must certify devices to protect their customers and their network.
"We don't want to be a barrier to entry," Lowell McAdam, CEO of Verizon Wireless, said at the developer conference where the specifications for the new program were revealed last month. "But as all of you can appreciate with 65 million customers and billions of dollars of investment in our network, we need to protect our customers and our assets."
The big question now is how Verizon will interpret the requirements for open access on new spectrum it recently won in the 700Mhz spectrum auction, which is required by an FCC rule to be open to all devices and applications.
Google's Whitt interprets the rule as ensuring connectivity for any device, not just Verizon-certified devices.
"Regardless of what Verizon thinks as a business proposition, they will still have to comply with what the FCC requires," he said. "And the order and the rules are clear for what the FCC had in mind. Verizon has to live up to the regulation and the terms of those regulations. And we trust that the FCC will verify that those conditions will be met."
Verizon says that it believes its take on open networks more than satisfies the FCC's requirements.
"The Open Device initiative and architecture goes much beyond anything that the commission might have been thinking about with Google," Ivan Seidenberg, CEO of Verizon Communications, said Friday during a conference call to discuss the 700Mhz spectrum auction. "I think what will happen is, the FCC's expectations will be more than met by the kinds of things that we're doing."
Controlling the mobile Web?
Verizon Wireless isn't the only mobile operator offering a service that might not be all that it seems. In March, Sprint Nextel, the third largest mobile provider in the U.S., announced it would use new technology from OpenWave that would allow it to transcode regular Web pages so they could be viewed on any browser-enabled cell phone on the Sprint network. Sprint touted the new functionality as a way to open the mobile Internet to its customers and provide complete access to everything on the Web on their mobile handsets.
But the way in which Sprint has implemented the technology has drawn criticism from Web publishers, who say Sprint is hijacking their Web pages and adding its own links to their sites. On many of the sites that have been transcoded, Sprint has added a "home" button on the bottom of the page that takes users to its home page and not the home page of the Web page publisher.
Ed Moore, project manager for OpenWave's OpenWeb product, said this button is simply a navigation tool and is not intended to draw clicks away from the mobile Web publishers.
"The aim of adding those buttons isn't to influence where users go next from a mobile Web page," he said. "It's simply to provide extra navigation. People need a way to get back to where they started to look for more content. And there is really no back button that can take them there."
But some people in the mobile community are afraid that Sprint may add other content to their Web pages, such as advertising. Jason Spero, vice president of marketing for Admob, a mobile advertising network for more than 4,000 mobile Web publishers, said many of his clients have complained about how Sprint is rendering its pages.
"The whole idea of 'openness' is just a marketing term," he said. "It's not really open when you're controlling what people see on Web pages. The mobile Web has all the potential of the PC Web, but adhering to standards is critical in making that happen."
Emmy Anderson, a spokeswoman for Sprint, said the company is not trying to control what consumers see when they surf the mobile Web. And she said the company is currently not embedding its own advertising on the mobile Web sites.
"It's not an issue of us having more control," she said. "We're just trying to make the user experience better. We are trying to open up more of the Internet to people on their cell phones. But we understand that some content companies might want to talk about how the information shows up on phones."
Moore said that OpenWave is already developing technology to ensure that some of these problems are resolved. And he said that Sprint is considering using the upgraded technology.
Even if Sprint adopts the new technology and Verizon Wireless edges toward more openness on its network, Google's Whitt believes that regulators and legislators still need to keep their eye on the phone companies.
"Clearly it would be great to say the carriers are always sensitive to consumers' needs or that they want to maximize consumer welfare," he said. "But in many cases there will always be the need for Congress and the FCC at a minimum to provide careful oversight."
Verizon executives on Friday said that a valuable chunk of newly purchased analog TV spectrum is a "transformative opportunity" that will let the company offer vastly faster wireless broadband service within the next three years.
In a conference call with investors on Friday morning, Verizon Communications CEO Ivan Seidenberg and Verizon Wireless CEO Lowell McAdam opened up about their plans for 700Mhz spectrum obtained through a recently concluded Federal Communications Commission auction. Early word of the plans began trickling out Thursday night after a gag rule of sorts lifted.
"With the 700MHz C block, we're in a premier position to provide the fastest (network) and most complete footprint across the country," McAdam said.
In short, the company views the C block, a nationwide chunk of licenses subject to so-called "open access" rules, as a way to "supercharge" its strategy for rolling out a fourth-generation (4G) network using long-term evolution (LTE) technology. Verizon opted last November to go with that new wireless standard backed by GSM industry players, which will allow its customers to use the same mobile devices and applications globally.
The timeline for 4G roll-out at this point looks like this: Verizon Wireless has already begun LTE field trials and network testing with partners Vodafone and China Mobile this year and will work on finalizing standards. The company plans to select vendors, develop dual-mode devices, and begin network deployment in the second half of 2009, and to launch the network commercially in late 2010. National coverage is expected by 2011, a Verizon Wireless spokeswoman said after the call.
Acquisition of the nationwide C block and other 700Mhz spectrum licenses will also allow the company to fill in previously "thin spots" of coverage across the country, McAdam said. That's significant because doing so will provide the depth necessary to offer higher-bandwidth broadband services with download speeds as high as 75Mbps--a far cry from the 2-3Mbps maximum offered now--he added.
Verizon Wireless, along with AT&T, was one of the top spenders in the auction for airwaves that are capable of propagating longer distances and penetrating walls and other obstacles more easily. AT&T has also said it plans to use its network to deploy an LTE-based network.
In addition to the C block, Verizon snapped up licenses covering several key metropolitan areas, including Los Angeles, Chicago, Philadelphia, Washington D.C. and Baltimore, Miami, Atlanta, Dallas, and Houston.
All told, the company spent about $9.3 billion, which was "what it expected to spend" on the spectrum, McAdam said.
"Going forward, there is really no urgency for us to do any spectrum purchases," the Verizon Wireless chief said. "We see a great opportunity to meet customers' needs as they change."
Companies bidding in the Federal Communications Commission's 700MHz spectrum auction are starting to talk.
The gag order that silenced those participating in the FCC's auction that ended last month was lifted late Thursday. Now companies are free to discuss their plans and strategies for bidding in the auction.
Verizon Wireless plans to use its newly won wireless spectrum licenses in the 700MHz auction to deliver 4G services, CTO Tony Melone told the wireless news site Unstrung.
Verizon Wireless paid nearly $10 billion for licenses in the C block, which are subject to a special FCC rule that requires the winner to allow any device to connect to a network using this spectrum. Verizon will use the spectrum to deploy a 4G network using long-term evolution (LTE) technology. The company expects to have an LTE service deployed in late 2009, the article quotes Melone as saying.
AT&T also said it plans to use the $6.6 billion worth of spectrum it bought in the B block to build a 4G network using LTE, according to RCRWirelessNews. The company will also use spectrum it won in the 2006 advanced wireless services (AWS) auction for the new network.
But the company doesn't plan to roll out the new network any time soon. According to RCR Wireless, AT&T's CTO doesn't expect the technology to be ready until 2012.
Other bidders in the auction have begun to talk, as well. Google, which had also been bidding on the C-block spectrum, said its main goal in bidding was to make sure the $4.6 billion reserve price was met so that the open-access rule would take effect. Richard Whitt, Washington telecom and media counsel, and Joseph Faber, corporate counsel for Google, wrote about Google's strategy on the company's Public Policy Blog on Thursday.
Cell phone chipmaker Qualcomm said it plans to use licenses it bought in the E block to provide more capacity for its mobile broadcast TV service called MediaFlo. Qualcomm spent a total of $558.1 million on licenses in the E block and a few licenses in the B block. The E-block licenses will expand MediaFlo coverage in areas such as Boston, Los Angeles, New York City, Philadelphia, and San Francisco.
And the B-block licenses, which cover parts of California and New Jersey, will be used for research and development.
Could satellite TV provider Dish Network be planning to build a mobile TV service with its newly won 700Mhz spectrum?
That's the question that many analysts were asking after it was disclosed this week that the company, also known as EchoStar Communications, spent $711 million for a block of licenses in the auction that is ideal for offering mobile broadcast TV, according to a Reuters story.
The much-talked about auction ended Tuesday raising about $19.6 billion for the government. Wireless carriers AT&T and Verizon Wireless won the bulk of the spectrum.
The licenses that Dish bought were in the 6MHz sliver of spectrum called the E-Block. Because these licenses cover such a narrow band of spectrum, it would be hard for Dish to build a broadband wireless service to transmit two-way communication. This means that building a cellular phone or wireless broadband service using this spectrum is nearly impossible. But the spectrum could be used to send communications one-way, making it ideal for services such as broadcast TV.
Qualcomm already owns spectrum that is adjacent to the spectrum that Dish bought. Qualcomm uses its spectrum to deliver its MediaFlo TV mobile broadcast TV service. Qualcomm had also been bidding in the auction and was attempting to get the E-Block licenses. The fact that it wasn't able to get those licenses is a negative for the mobile technology company.
"It makes more sense for one provider to operate both pieces of spectrum," Steve Clement, an analyst at Pacific Crest Securities told Reuters.
Dish hasn't said yet what it plans to do with the spectrum. Some analysts in the Reuters story speculate that it could cost the company between $3 billion and $5 billion to build a mobile TV network. The company said in a financial filing with the Securities and Exchange Commission in February that it might "make investments in or partner with others to expand our business into mobile and portable video, data and voice services."
There's also a possibility the company could work with Qualcomm.
Dish bid on the spectrum through its partner Frontier Wireless.
Consumer watchdog groups and some lawmakers want to know why the block of spectrum reserved for public safety in the Federal Communications Commission's 700 MHz auction didn't hit its reserve price.
On Wednesday, a coalition of nine consumer advocacy groups, including the Consumer Federation of America, Consumers Union and the Media Access Project, sent a letter to the chairman of the FCC asking the agency to investigate whether the public safety requirements for "d" block license were too stringent. The groups also want the FCC to study whether plans for the shared public-private network are even still viable.
But consumer groups aren't the only ones concerned that the d block didn't sell. House Energy and Commerce Committee Chairman John D. Dingell (D-Mich.) and telecommunications subcommittee chairman Edward J. Markey (D-Mass.) are already planning a hearing for early next month to consider whether the public-private partnership model for building the wireless network for emergency responders should be changed or if the reserve price should be lowered.
FCC Chairman Kevin Martin has asked the agency's inspector general to look into complaints about the d-block auction, a Reuters story said.
The 700 MHz spectrum auction racked up a record $19.59 billion, but no one in the auction was willing to pony up the government's minimum price of $1.3 billion for the d block spectrum. The lone bid recorded for the d block was $472 million.
Under the rules set by the FCC before the auction started in January, the winner of the d-block licenses would be required to partner with local police, fire departments, and other public safety groups to provide a nationwide interoperable public safety network. This type of network is sorely missing in the U.S. And such a network was recommended to be built by the 9/11 Commission that investigated the events surrounding the terrorist attacks in New York City and Washington, D.C. in 2001.
A company called Cyren Call had been selected to act as the intermediary between public safety agencies and whichever private sector company won the spectrum licenses.
But even before the spectrum auction began, the only major contender in the auction, a company called Frontline Wireless, went out of business. The company had apparently been unable to secure funding.
Now, consumer groups and lawmakers are asking whether the reserve price was too high or if the strict public safety requirements were too difficult for a company in the private sector to meet.
In the meantime, the FCC has officially "de-linked" the d-block spectrum from the other blocks offered in the auction, so that it can be auctioned off later. The FCC said in a press release on Wednesday that it will not re-offer the d block spectrum immediately in the subsequent Auction 76. Instead, it will consider its options for how to license this spectrum in the future.
That said FCC Chairman Martin and the other commissioners said they were committed to making spectrum available for a nationwide interoperable public safety network before the February 2009 Digital TV transition.
"It is a travesty that our nation has failed, so far, to meet this urgent public safety challenge," Commissioner Michael Copps, said in a statement. "Now we have another chance to build the network that public safety and the American public need. I remain committed to working with my colleagues to succeed in this most important task."
It's official: Verizon Wireless has won licenses for nationwide coverage in the C-Block in the 700MHz spectrum auction conducted by the Federal Communications Commission.
This means that Verizon, not Google, will control the spectrum that is required by the FCC to adhere to special open-access rules.
Google had lobbied the FCC last summer to include several rules in the 700MHz spectrum auction that mandated open access. The FCC adopted only one of Google's proposed rules, which requires the winner to allow any device or application to connect to a network that uses this spectrum.
Google made good on its promise to bid in this sliver of spectrum in the auction. But as I predicted months ago, the company wasn't really serious about winning the auction. Instead, it looks like it just wanted to push the price of the auction above the $4.6 billion threshold to ensure that the open-access rule would go into effect.
Google apparently did not win any licenses in the auction, FCC Chairman Kevin Martin said at a press conference in Washington, D.C., Wednesday, according to The Wall Street Journal.
It's not surprising that Verizon won the C-Block licensees. Analysts had been predicting that for weeks.
Now it looks like the company will include this spectrum in its new open-device initiative. In November, the company announced that it would allow subscribers to bring their own phone or other wireless device to its network.
On Tuesday, Verizon released specifications and certification testing information for devices that it will allow on this open network.
Of course, the very fact that the company still requires device makers to certify their products for use on its network means that it isn't completely "open." But the new certification process is streamlined and will allow device makers to get through certification in weeks rather than in months.
Verizon also won other 700MHz spectrum licenses. It was the largest winner of licenses in the A-Block, which are midsize licenses. And it won 77 licenses in the B-Block, the smallest regional licenses that were being auctioned.
Satellite TV provider EchoStar Communications also won enough spectrum licenses to give the company nearly nationwide wireless coverage. EchoStar and DirecTV Group had dropped out of the Advanced Wireless Service auction in 2006. AT&T also won a large number of the smallest licenses that were auctioned.
The auction, which sold spectrum being freed from the transition to digital TV in 2009, closed on Tuesday, raising a record $19.6 billion.
