WASHINGTON--The wireless and TV broadcasting industries faced off for the first time at a congressional subcommittee meeting on the Hill on Tuesday, setting in motion what could be a long drawn out battle over whether wireless spectrum should be reallocated and where the government will get this new spectrum.
Steve Largent, president and CEO of CTIA, the wireless industry group, and Gordon Smith of the National Association of Broadcasters, were among the witnesses gathered before the House Energy and Commerce Committee's Subcommittee on Communications, Technology and the Internet to discuss what the CTIA and the Federal Communications Commission have called a looming spectrum crisis.
CTIA and FCC Chairman Julius Genachowski have said that finding new spectrum as well as new ways to use existing spectrum more efficiently are top priorities that need to be addressed to keep up with growing demand for new wireless broadband services.
"Spectrum is our industry's backbone and it is what allows us to continue to innovate and create new apps, products, and services," Largent said in a statement. "Without this additional spectrum, our industry will cease to provide U.S. consumers with the most innovative and most competitive wireless offerings in the world."
The hearing comes just weeks after the CTIA ruffled broadcasters' feathers when it filed comments with the FCC suggesting that some of the additional spectrum it seeks for wireless broadband could come from unused TV broadcast spectrum. Broadcasters oppose giving up their spectrum. And some representatives for broadcasters say they don't believe that there is a spectrum crisis.
"There is no shortage of wireless spectrum in this country," said John Hane, counsel in the communications practice group of Pillsbury Winthrop Shaw Pittman, which represents the TV broadcast industry. "There is a lot of spectrum already available that could be used more efficiently. That is why we need these bills to take an inventory of what is currently being used."
Indeed, NAB and CTIA both said they support the passage of the Radio Spectrum Inventory Act, which would require the FCC and the U.S. National Telecommunications and Information Administration (NTIA) to inventory the wireless spectrum available in the U.S. It would also require those organization issue a public report on the government and private uses of the spectrum.
Smith of NAB also said during his testimony that it's important for Congress to look at all spectrum holders to ensure they are using their spectrum efficiently rather than singling out the broadcast industry.
"NAB believes that any inventory of spectrum should be comprehensive," he said in his prepared testimony. "Let's look at all bands and all services, including federal government bands. And let's view how each service is using its existing spectrum."
The NAB also said it supports another bill in the House, called the Spectrum Relocation Improvement Act, which would streamline the process for federal agencies to turn over unused spectrum so it can be auctioned to bidders in the private sector.
It's clear that the CTIA and FCC are taking on a big fight with calls for spectrum reallocation. And Jim Cicconi, senior executive vice president of external and legislative affairs for AT&T, said in an interview Tuesday that he admires the FCC for taking on such a battle.
"We certainly think that there is looming spectrum crisis," he said. "And I give the FCC chairman a great deal of credit for being courageous enough to lay out the problem and to seek what is best for consumers."
But he added that he also believes that the government needs to look at all sources of spectrum in solving this problem.
"That's why we agree there should be a spectrum inventory done," he said.
But skeptics, such as Hane, believe that a full inventory will actually show that no spectrum crisis exists. He argues that Congress may realize once it evaluates the data that there is no real crisis and that the current allocation of spectrum is sufficient to handle future growth.
Specifically, he says that wireless operators could be doing more with Wi-Fi and femto cell technology, which boosts radio signals indoors and then uses a wired broadband connection to send calls and data across a carriers network. He thinks this could help solve some of the efficiency problems that exist today instead of forcing TV broadcasters or government agencies to give up their spectrum.
But the CTIA argues that Wi-Fi and Femto cells are not enough to solve the spectrum shortage. Largent said additional spectrum is necessary to keep the U.S. competitive in the wireless market. And carriers such as AT&T, which is currently facing capacity issues due to heavy use of data services on devices like the iPhone, agree that freeing up more spectrum could help alleviate the problems the company currently faces.
Using a report from the International Telecommunications Union, CTIA calculates that by 2015 the U.S. and other developed nations will need about 1300 MHz spectrum to keep up with growing wireless broadband demand. Largent said in his testimony that the U.S. is lagging other nations in making additional spectrum available. Today, the U.S. has a little less than 500 MHz of spectrum that is commercially available. The trade group is asking the FCC to identify 800 MHz of additional spectrum that can be reallocated for wireless broadband use.
Largent pointed out that countries much smaller than the U.S. have much more spectrum available to them. For example, Germany, which has about 107 million wireless subscribers, will soon have about 645 MHz of spectrum available commercially. And the United Kingdom, which has only about 77 million subscribers will soon have 707 MHz of spectrum available for commercial purposes.
Largent said it is important for Congress to begin the spectrum reallocation process now because it takes years to identify and auction off new spectrum. The past two major FCC spectrum auctions each took more than 10 years to complete from start to finish.
NAB's Smith cautioned congressional leaders to not act hastily in reallocating spectrum. Not only could it hurt free over the air TV, but he said it could stifle innovation in improving digital TV. The U.S. just spent several years and billions of dollars converting to digital TV service, which uses spectrum more efficiently and often provides better service to consumers.
"Our national priorities should recognize the value that free over-the-air broadcasting brings to every American," Smith said in his testimony. "Broadcasting and broadband are not 'either/or' propositions as some have suggested; that's a false choice."
The bills before Congress are just the first step in what is likely to be a long battle for the wireless industry, government agencies and TV broadcasters.
"This is the first round in a 128-round match up," Hane said. "This is just getting started. So it's premature for the CTIA to begin talking about reallocating spectrum when we don't even have a full inventory of the spectrum that's currently being used."
The Federal Communications Commission opened a formal proceeding Wednesday to get feedback on whether it should reclaim some spectrum licenses held by TV broadcasters and auction them off to wireless broadband providers.
The public comment notice issued by the FCC is the first step in a process that could pit TV broadcasters against the FCC and the wireless industry.
FCC Chairman Julius Genachowski said in a speech earlier in the week that he is interested in taking back some of these airwaves to re-auction them for use in building new wireless broadband services.
Broadcasters oppose a plan under which they'd give up any spectrum licenses, saying that it would harm some Americans' access to free over-the-air TV programming. But some FCC officials, such as Blair Levin, who is in charge of drafting a policy plan for national broadband, argue that some of this spectrum is not being used efficiently or effectively. The idea is that the spectrum could be better used for providing 4G wireless services.
Spectrum that is used by broadcasters is considered ideal because it transmits signals over long distances and can penetrate through walls. Using it to build wireless broadband services would mean that service providers do not have to put radios on as many towers, which saves money when building networks and increases the reach of a network.
The most recent spectrum auction sold licenses for the 700MHz band of spectrum, which had been used to transmit analog TV signals. The FCC re-auctioned this spectrum after Congress mandated that all major TV broadcasters shift to broadcasting digital signals rather analog signals. Verizon Communications was one of the major winners in the 700MHz auction. And its wireless division, Verizon Wireless, is using the spectrum to build its 4G next-generation wireless network, which is expected to go live in some markets starting in 2010.
As more Americans use Internet-connected wireless devices, such as smartphones, and ultra portable devices, such as e-readers and Netbooks, the current allocation for wireless services is becoming saturated. Chairman Genachowski warned in his speech that without more spectrum dedicated to wireless broadband services, the nation faces a crisis that could stifle innovation.
The FCC will accept public comment on this issue until December 21.
The Federal Communications Commission is shaking up the communications market with bold initiatives to overhaul the $7 billion Universal Service Fund to help pay for universal broadband and reallocate wireless spectrum for new wireless broadband services.
FCC Chairman Julius Genachowski presented plans for revising the USF program and reallocating spectrum during a speech on Tuesday in Washington, D.C., at The Innovation Economy Conference.
Julius Genachowski, FCC chairman
The Universal Service Fund is a $7 billion federal subsidy program that is funded by fees added to consumer phone bills. The USF was originally designed to provide subsidies to pay for phone service in rural communities and to low-income residents. But the FCC believes that the fund should also be used to help pay for universal broadband, a policy priority for President Obama's administration.
Revamping the fund has been controversial, as some rural phone companies have resisted any attempts at expanding the scope of the program. Genachowski acknowledged that making changes wouldn't be easy, according to a transcript of his prepared speech.
"This is a thorny issue, with no shortage of practical and statutory challenges," he said. "(But) we need to wring savings out of the system, protect consumers, avoid flash cuts, while ultimately moving USF in the direction it needs to go to support our 21st century platform for innovation."
Genachowski emphasized that reallocating some of these funds to help build broadband infrastructure in rural areas is important for spurring innovation.
"USF is a multibillion-dollar annual fund that continues to support yesterday's communications infrastructure," he said. "The goal of universality is as important as ever--and to meet our country's innovation goals, we need to reorient the fund to support broadband communications."
Genachowski also reiterated the importance of auctioning off more wireless spectrum to be used for mobile broadband services. He called wireless spectrum the "lifeblood of our wireless networks." And he said they are a critical part of innovation and infrastructure.
The FCC has already increased the amount of spectrum available to wireless companies threefold in the past few years, Genachowski, noting that experts believe that there will be a 30-fold increase in traffic on these networks. And without more spectrum, these networks will be congested and will stifle innovation.
"Given that spectrum can take many years to reallocate and build out, if we don't start the process now, we'll pay a steep price in innovation down the road," he said.
As part of his proposal, he says the FCC will encourage more efficient use of spectrum and devices through innovative spectrum policies. He noted that the FCC will also look at increasing spectrum flexibility and opening secondary markets for licensed spectrum use. And he said the agency will look into allowing more use of unlicensed spectrum, such as the "white space" spectrum that sits between broadcast channels.
But the most controversial proposal he has put forth involves taking away spectrum from current spectrum license holders, such as TV broadcasters, and reallocating those licenses to broadband wireless providers through another auction process.
"In order to support the full flowering of innovation, and to keep the U.S. globally competitive, we will need to find ways to free up new spectrum to mobile broadband," he said, according to the transcript of his speech. "This will require examining old allocation decisions--often decades-old--and evaluating them against current technologies and consumer demand."
TV broadcasters have vehemently resisted this proposal.
Broadcast airwaves are considered very valuable because they can travel long distances and penetrate walls. The most recent 700MHz spectrum auction, which auctioned off analog TV spectrum, is being used by operators such as Verizon Wireless to build 4G wireless broadband services. And Genachowski believes that more spectrum should be freed up to allow for more 4G wireless broadband services.
SAN DIEGO--In his first major address to the wireless industry, the new Federal Communications Commission chairman, Julius Genachowski, offered some good news for wireless operators at the industry's biannual gathering here Wednesday. But he reiterated the FCC's plans to apply new Net neutrality rules to wireless, a plan that has met resistance among the industry's major players.
FCC Chairman Julius Genachowski speaking at the CTIA 2009 fall show.
(Credit: Marguerite Reardon/CNET)As part of his speech, Genachowski announced a new initiative to add more spectrum for high-speed Internet access, and he offered assurances that the FCC will help speed up 4G wireless roll-outs by cutting through red tape for new tower deployments.
The industry has applauded these new initiatives. The CTIA, which is the trade organization for the wireless industry, recently sent a letter to the FCC asking it to consider opening up more spectrum for auction to help spur growth. And it has also been urging the FCC to speed up the process for building new towers.
Specifically, Genachowski said that the agency's main priority will be to make more spectrum available to wireless operators. And he said the FCC will impose a "shot clock" timetable for companies seeking permission to build cellular towers in local communities.
But Genachowski also said that he plans to keep the wireless Internet open. And he emphasized that the agency's Net neutrality principles, which will soon become official regulation, will also apply to wireless networks. While this latest bit of his agenda hasn't been popular with wireless operators, Genachowski said the agency's hope is to work closely with the industry.
"When we say that we haven't determined what we are going to do with handset exclusivity and we want your input, we mean it," he said. "The same applies to an open Internet. We want you to be engaged. We need you to be engaged. I am committed to running an expert agency that works for all Americans, that pursues high principles while recognizing the danger of dogma and the power of pragmatism."
Ralph de la Vega, CEO of AT&T Mobility and Consumer Markets, said during his keynote address Wednesday that he is happy to work with the FCC. He applauded the agency's efforts to open up more spectrum and to speed up the bureaucratic process for building and expanding wireless networks.
"We welcome the call for a fact-based approach to these issues," he said. "And we are pleased, (Genachowski) wants to listen to us. But in a competitive market, consumers will assess the value of our service. And they will pick the winners and losers. And that is the way it should be."
Ralph de la Vega, president and CEO of AT&T Mobility and Consumer Markets
(Credit: Marguerite Reardon/CNET)De la Vega pointed out the company's latest effort to keep its network open by allowing voice over IP services such as Skype to run on the iPhone. AT&T has the exclusive deal in the U.S. to carry the popular Apple smartphone on its network.
Genachowski said he appreciates AT&T's announcement. And he said this was good news for consumers.
But he said more work needs to be done. And even though Net neutrality is a priority at the agency, he said that allocating more spectrum and adding capacity to the wireless network is the No. 1 concern at the agency. He said that mobile data usage is exploding. And by 2013 U.S. consumers will use nearly 400 petabytes per month of wireless data compared with 6 petabytes per month in 2008.
"You don't have to know what a petabyte is to know that that's a game-changing trajectory," he said. "Spectrum is the oxygen of our mobile networks. While the short-term outlook for 4G spectrum availability is adequate, the longer-term picture is very different. I believe that that the biggest threat to the future of mobile in America is the looming spectrum crisis."
He proposed that the FCC will look at secondary markets to add more spectrum and will look to make its spectrum policies more flexible to encourage the use of unlicensed spectrum. He also said the FCC will encourage the use of smart antennas and femtocells.
But most importantly, Genachowski said that the FCC must reallocate spectrum currently being used for other purposes. He said that carriers have told the FCC that they need anywhere from 40MHz to 150MHz each to bring wireless broadband to consumers.
"It takes years to reallocate spectrum and put it to use," he said. "But we have no choice. We must identify spectrum that can best be reinvested in mobile broadband."
Genachowski also said that the FCC has heard the industry's call to help it work with local communities to get new cell phone towers approved much more quickly to help them build their next-generation wireless networks.
"We at the FCC understand the many challenges operators face in (building) networks," he said. "We are ready to help you cut through red tape and overcome these hurdles."
While the industry was happy to hear the good news that the FCC is willing to help it address some of its most pressing issues, leaders such as de la Vega resisted the agency's plans to extend Net neutrality principles to the wireless market.
Genachowski said it was imperative that the agency keep wireless broadband networks open to encourage more innovation. And he tried to allay fears that the FCC would impose arcane rules that would stifle innovation and investment.
"The goal of the proceeding will be to develop sensible rules of the road," he said. "Rules clear enough to provide predictability and certainty, and flexible enough to anticipate and welcome ongoing technological evolution."
But AT&T's de la Vega argued that imposing the same policy rules on wireless networks as it applies to wired networks is not a good idea. And he said that it is unfair for the FCC to impose any rules on wireless operators who have already spent billions of dollars buying licenses for wireless spectrum.
"The rules should not change after the auction," he said. "How can you expect companies to invest billions of dollars if you change the rules? The rules were clear in the 700MHZ auction for the next generation of wireless services. And these rules should not change now after the money has been spent. What would that say about the integrity of the 700MHz auction?"
Microsoft researchers may have taken a step closer to finally turning unused analog TV spectrum, known as "white spaces," into unlicensed spectrum that can be used to deliver new wireless broadband services.
Researchers from the software giant, along with academics from Harvard University, have developed a protocol that the company claims could be the foundation for products that meet Federal Communications Commission requirements for avoiding interference when using unlicensed "white space" spectrum. The researchers presented their ideas this week at the ACM SIGCOMM 2009, a communications conference held in Barcelona, Spain, according to an article published on MIT's Technology Review Web site.
"White space" spectrum is unused wireless spectrum that sits between analog TV channels. Because much of this spectrum operates at lower frequencies, it can travel longer distances, much longer distances than the unlicensed frequencies used for Wi-Fi devices. Most Wi-Fi devices operate at 2.4 GHz, whereas, white space spectrum between analog TV channels 21 and 51 operate in the 512 megahertz and 698 megahertz range. (Signals transmitted over lower frequencies tend to travel longer distances at slower speeds, while signals transmitted at higher frequencies tend to be faster over shorter distances.)
Technology companies, such as Google, Motorola, Microsoft, and Dell, have been lobbying the FCC for years to open this spectrum for unlicensed use. The hope is that the spectrum could be used to augment existing wireless services or eventually be used to create new wireless broadband services.
But TV broadcasters and wireless microphone companies have long opposed the use of this spectrum, saying it will interfere with their services.
After a series of prototype tests, the FCC in November finally agreed to open up unused broadcast TV spectrum for unlicensed use. But the commission put together a set of strict guidelines designed to ensure that devices using the unlicensed spectrum would not interfere with existing TV broadcasters or other devices using the same unlicensed spectrum, such as wireless microphones.
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Faced with a whopping $1.7 trillion deficit, President Obama is proposing tacking on a spectrum license fee to wireless operators to help generate revenue for the government.
The Obama administration's proposal was loosely outlined in the new budget plan for 2009 and 2010 submitted Thursday. In that plan, the administration proposes adding a new fee to be paid by wireless carriers that license wireless spectrum from the government.
These annual fees would start at $50 million in 2009 and jump to $200 million in 2010, Reuters reported. The fees will gradually increase over the next 10 years to $550 million per user per year, generating an estimated total of $4.8 billion over the next decade.
The proposed fees are in addition to license fees that operators have already paid the federal government as part of its wireless auctions. The Federal Communications Commission has been auctioning off wireless spectrum to phone companies and other entities since the 1990s. These auctions grant license holders exclusive rights to the spectrum in exchange for cash.
Over the years, these auctions have generated billions of dollars for the federal government. The most recent auction, which ended in March 2008, was for the 700 MHz block of spectrum that is being vacated by television broadcasters after the mandated digital TV transition. This valuable spectrum generated a record $19.6 billion.
But wireless spectrum is a limited resource. And the government is running out of airwaves to auction. In fact, the Obama administration predicts that it will only be able to generate about $4.8 billion in revenue from wireless auctions over the next 10 years.
Even though the additional fees could help the government halve the deficit by 2013 as well as help it fund several new spending initiatives, it's likely to be met with a great deal of resistance from mobile operators.
So far, none of the big four wireless carriers in the U.S.--AT&T, Sprint Nextel, T-Mobile USA and Verizon Wireless--has been willing to comment on the proposal. And the CTIA wireless-industry association said it's still looking into the matter.
"We are currently reviewing the details of the proposal and look forward to participating in the next stages of this issue," CTIA said in a statement.
Previous spectrum fee proposals have been strongly opposed by the wireless industry, and there's little reason to suggest that the industry would support them now. The big difference this time around is that a Democrat-controlled Congress could be more willing to support President Obama's plans.
More details about the proposal are expected later this spring when the administration releases a more detailed budget package. But any changes to the fee structure would require legislation. And my guess is that the wireless industry would fight hard against it.
AT&T could end up with the lion's share of the wireless assets that Verizon Wireless must get rid of as part of its acquisition of Alltel, The Wall Street Journal reported Wednesday.
The newspaper cites sources who said that AT&T is among several bidders hoping to get their hands on the Alltel subscribers and network. The private-equity firms Carlyle Group and Kohlberg Kravis & Roberts & Co., supposedly are bidding on the assets together as is Providence Equity Partners on its own. At least one cable provider also has expressed interest, the Journal says.
In order to close its $28.1 billion acquisition of Alltel, Verizon Wireless agreed to sell off assets in 22 states to appease regulators. Included in these assets are 2.1 million wireless subscribers and wireless spectrum and equipment valued at around $3 billion.
AT&T is considered to be in the strongest position to bid on the assets, but consumer advocates and rural phone companies say that allowing AT&T to purchase these assets is bad for consumers.
Verizon Wireless and AT&T are the No. 1 and No. 2 wireless operators in the U.S., respectively. Together, they have over 160 million subscribers and account for nearly 60 percent of all cell phone service in the country. Critics, such as Gigi Sohn of Public Knowledge, told the Journal that Alltel's assets should end up with a smaller wireless player to spur more competition, rather than allowing the second largest operator to gobble up more customers and spectrum.
Rural trade groups believe that AT&T could charge expensive roaming rates to other smaller carriers in these regions, which could affect competitive pricing for consumers.
Even if AT&T ends up as the highest bidder for the assets, the deal still has to be approved by the U.S. Department of Justice. But because the deal will likely be evaluated market by market, AT&T could still end up with a significant amount of the assets if it is bidding for assets where it doesn't have a strong presence already.
Some people, such as Dan Meyer at RCR Wireless, argue that AT&T buying the divested Alltel assets might not be such a bad thing for consumers. Alltel primarily operates in rural markets, where national carriers don't offer service. And some of these consumers might be happy to have another national operator, such as AT&T, he said.
But the biggest benefit for rural consumers is that they could finally be able to get the Apple iPhone. AT&T is the exclusive carrier for the iPhone and many people in rural markets have complained that this exclusivity agreement has prohibited them from having access to the latest and greatest technology. While the real policy issue here centers around exclusivity deals, the fact remains that a big group of people want the iPhone and can't get it because AT&T isn't offered in their market.
So even though allowing AT&T to gobble up more spectrum and assets may hurt smaller wireless operators and could ultimately drive up wireless prices, I'm sure there are plenty of people living in rural areas where AT&T doesn't offer service today who would be more than happy for the chance to have an iPhone.
What do you think?
The Federal Communications Commission has canceled a meeting scheduled at which it planned to vote on a controversial free Internet plan.
The group has been considering whether it should auction off 25 megahertz of wireless spectrum in the 2155MHz to 2180MHz band. In exchange for using the spectrum, the FCC would require license holders to offer some free wireless broadband service, as a way to provide free Internet access to millions of Americans who either can't afford or don't want to pay for high-speed Internet access. That Web service would have been filtered for pornography and material deemed not suitable for children. People 18 and over would have the option to opt out of the filtered service.
The FCC was set to vote on the plan at a meeting on Thursday, December 18. But the plan has been met with opposition from several top officials, wireless providers, and even civil rights groups.
In a letter sent to FCC Chairman Kevin Martin on Wednesday, U.S. Commerce Secretary Carlos Gutierrez expressed the Bush administration's opposition to the idea of imposing requirements on spectrum buyers.
"The administration believes that the (airwaves) should be auctioned without price or product mandate," Gutierrez wrote, according to The Wall Street Journal. "The history of FCC spectrum auctions has shown that the potential for problems increases in instances where licensing is overly prescriptive or designed around unproven business models."
The element of Web filtering worried at least one privacy group. "It's very troubling," Marc Rotenberg, executive director of the Electronic Privacy Information Center, told the Los Angeles Times. "A government-mandated filter at the network level means the government can block anything it finds objectionable."
Existing wireless providers objected to the plan for entirely different issues. T-Mobile USA, which spent $4.2 billion in 2006 to acquire spectrum in an adjacent band, said that opening up this spectrum would cause interference and disrupt service, a claim the FCC says it disproved in October.
And other logistical questions--such as exactly how the service would be filtered for inappropriate content and how the age of people who opted out of the filtered service would be verified--remained unanswered.
The FCC has other problems as well. Earlier this week, the House Committee on Energy and Commerce released a report accusing Martin of ignoring his responsibilities and abusing his power as FCC chairman. A detailed report released on Tuesday and stemming from a bipartisan investigation in January claims Martin manipulated and withheld information from Congress and other FCC commissioners, and ignored evidence that certain national communications programs were being grossly mismanaged. The report describes a "climate of fear" that pervades the FCC and kept some people from testifying publicly.
Sen. John Rockefeller (D-W.Va.) and Rep. Henry Waxman, (D-Calif.) on Friday sent a letter to Martin asking him to not to take action on any controversial policy proposals, according to the Journal. And on Friday night, the FCC reported it would, in fact, cancel the upcoming meeting.
A Federal Communications Commission engineering report released late Friday essentially backs a plan to create a free wireless Internet service by dismissing concerns about interference for existing providers.
The FCC has been considering auctioning 25 megahertz of spectrum in the 2155MHz to 2180MHz band. As part of the rules for using the spectrum, the FCC plans to require license holders to offer some free wireless broadband service.
The FCC sees the plan, which is based on a proposal submitted to the FCC by M2Z Networks in 2006, 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.
But existing providers like T-Mobile USA, which spent $4.2 billion in 2006 acquiring spectrum in an adjacent band, say that opening up this spectrum would cause interference and disrupt service.
Friday's report, however, concludes that spectrum could be used as planned "without a significant risk of harmful interference."
Click here for a PDF of the full FCC report.
It should be noted that this free Internet plan is separate from a proposal to use so called unused TV spectrum, also known as "white space" for wireless broadband services.
A Web site for matching buyers and sellers of wireless spectrum went live on Friday.
The site SpecEx.com, which is run by a start-up called Spectrum Bridge, is aiming to make sense of an existing secondary market for wireless licenses, The Wall Street Journal reported Friday.
The Federal Communications Commission periodically auctions off wireless spectrum licenses. Most of the spectrum licenses are used to provide cell phone service or to provide two-way radio communication or for emergency personnel. But there is some spectrum that is not used and lays fallow.
Big wireless operators, such as Verizon Wireless, AT&T, and Sprint Nextel, regularly trade these small slivers of spectrum licenses as do smaller license holders like universities or religious broadcasters. But now Spectrum Bridge's Web site will help make this process more efficient allowing sellers to know the clear value of their spectrum and allowing buyers to know who is selling spectrum, the Journal article
said.A spokesman for the FCC told the Journal that Chairman Kevin Martin has always supported the idea of secondary markets, which should prove to be a big help since buyers and sellers will need to get FCC approval for the transfer of licenses.
While the idea sounds like a good one, the article also points out that other wireless marketplaces haven't done so well in the past. The financial-services firm Cantor Fitzgerald launched a wireless spectrum market place that has failed to gain traction.
But as less spectrum is available for auction and licenses become more scarce, it might help spur adoption of the Spectrum Bridge marketplace. This is especially true after the FCC recently completed two major spectrum auctions in the last couple of years. What's more, as cable operators and other companies, such as Google, become interested in wireless and mobile services it creates more demand for wireless spectrum. And the SpecEx.com could end up being the place to go. Verizon Wireless told the Journal that it could be both a buyer and a seller of these licenses. But AT&T declined to comment and Sprint was unavailable for comment.
