The 700 MHz Club

I'm going to be on Science Friday today (approximately 2:00 pm in New York City and at various times on NPR affiliates around the country) to talk about the upcoming auctions of spectrum in the 700 MHz band. In preparation of that, I've started an FAQ, which I'll be expanding from time to time. Here's the first cut. -- Steven Cherry

700 MHz FAQ

What is the spectrum?

A total of 84 MHz in and around the 700 MHz band are up for reassignment.

Why is it becoming available?

As part of the conversion to digital TV in 2009, UHF channels 60 to 67 are being freed up. Ultimately, as much as 290 MHz might be freed up by the conversion from analog TV.

What are the frequencies, Kenneth?

24 MHz will be devoted to emergency services, police, fire, ambulance, and so forth. From an FCC information page:

In 1998, the FCC adopted service rules for the 24 megahertz of spectrum in the 764-776/794-806 MHz frequency bands (collectively, the 700 MHz band). At the direction of Congress, this spectrum was reallocated from television broadcast services to public safety communications services. It will be available as soon as existing TV stations vacate the spectrum.

GigaOM has a nice explanation:

The 700 MHz band is divided into two categories â'' the lower 700 MHz band and the upper 700 MHz band. The lower band is 48 MHz while upper band is 60 MHz.

In 2002, FCC re-allocated the 698-746 MHz band (Lower 700 MHz band) that was originally used by TV Channels 52-59. The upper band was for TV Channels 60-69. The reallocations come as FCC pushes hard for the television business to transition to DTV.

How important is new spectrum?

Very. The U.S. Chamber of Commerce has this to say:

The U.S. Chamber of Commerce advocates for the allocation of additional spectrum for innovative wireless services. A conservative analysis reveals that just 200 MHz of additional spectrum would lower per-minute wireless charges by about 50% and would lead to a 95% increase in usage by wireless customers.

Why is this spectrum especially valuable?

Basically, the lower the band, the better the propagation. That means a signal that can punch through an outside building wall, and hopefully interior walls as well. You know how bad cellular service can become once youâ''re indoors. Thatâ''s because of their frequencies, generally 1.7 GHz (that is, 1700 MHz) or higher. Similarly, Wi-Fi has trouble punching through walls to get outside of a building. Wi-Fi operates at 2.4 GHz.

In a whitepaper, Aloha Partners, a telecommunications company, says this:

Each tower broadcasting at 700MHz can cover twice as large an area as a transmitter broadcasting at 1900MHz spectrum (and four times as large an area as a transmitter broadcasting at 2500MHz WiFi spectrum). Thus, it is far less expensive to construct new networks with 700 MHz spectrum than with 1900 or 2500 MHz spectrum. Moreover, the 700MHz auction will be for six large regional blocks that will make it easy for new entrants to create a national footprint.

How much will it go for?

The bidding will start at $6.4 billion. Most estimates of where it will end up are in the neighborhood of $15 billion. As far back as 1994, the U.S. Department of Commerce employs game theoreticians and auction specialists to maximize the return for the U.S. Treasury. Even so, there are charges that the 2006 auction was gamed by the winners.

Aloha Partners, which already owns 12 MHz in the 700 MHz band, and plans to be one of the bidders in this auction, says $20-$30 billion.

When?

Currently the auction is planned for January 2008 or sooner, but even if it starts then, auctions have sometimes been somewhat drawn-out affairs.

When was the last big auction? What happened?

The last big auction was in the summer of 2006. Ars Technica has a good summary:

The US government's big spectrum auction wrapped up yesterday with bids totalling $13.9 billion. Touted as one of the largest spectrum auctions in Federal Communications Commission history, the sale was for 1,122 licenses covering 90MHz of spectrum in the 1710-1755MHz and 2110-2155MHz bands.

Overall, the big winner was T-Mobile. The number four cellular provider snapped up 120 licenses with about $4.2 billion worth of bids. Snagging those licenses, which cover a handful of major metropolitan areas as well as larger regions, was seen as crucial for T-Mobile, which lacks the sheer volume of spectrum larger US providers like Verizon, Cingular, and Sprint Nextel own. The additional spectrum should enable the company to expand its next-generation wireless offerings.

Also doing well was SpectrumCo LLC, a joint venture between Sprint Nextel and cable providers Comcast, Cox, and Time Warner. That spectrum will likely be used to strengthen the position of the cable companies against the likes of Verizon and AT&T with their ability to offer phone service, cellular service, Internet, and television (in a few markets). Expect to see some advertising in the months ahead offering Sprint Nextel cellular service bundled with the usual triple play from the cable companies.

What was Googleâ''s concern for the commercial band?

Google wanted rules set for the use of the commercial bands that would require that any owner allow any device onto their network, and that any application be allowed to run on those devices. They also wanted the band itself to be open, that is to allow others to use it, so long as they did so in an non-interfering way. Thatâ''s how Wi-Fi works, by the way; there are licensed users of the 2.4 GHz band, mostly ham radio operations, but you never hear about them.

So whatâ''s going to happen with the commercial band?

Google got two of their three wishes, the first two.

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