IP Capsule - August 03, 2007

Thu, 08/02/2007 - 8:00pm
Brian Santo
   August 03 , 2007 
IPso Facto...

Garage sale
The auction for the valuable 700 MHz band is turning out to have almost as many twists as "The Deathly Hallows." The Federal Communications Commission (FCC) issued its Brian Santorules for the auction, which included a surprise or two, especially regarding open access.

The expectation was that large incumbents – AT&T, Verizon, Comcast, Time Warner Cable – would be the only bidders on the spectrum. Proposals were made suggesting paths to open access to encourage new competitors.

One was to dictate that some portion of the licensed spectrum be available at wholesale rates to third parties. The approach is reminiscent of the old DSL rules, which made the incumbent telcos apoplectic, so I wasn't expecting that to happen. Mustn't make the telcos unhappy, right? But I digress...

The other was to reserve part of the spectrum for some third provider. As of a few weeks ago nobody had stepped up (a previous IPso Facto on that subject), though eventually Google said it would bid.

The FCC chose neither option. Instead, it included a provision that the 22 MHz chunk of spectrum known as the Upper 700 MHz C Block will, in the commission's words, "be required to provide a platform that is more open to devices and applications. These licensees will be required to allow customers, device manufacturers, third-party application developers, and others to use any device or application of their choice on their networks in this band, subject to certain conditions."

Hard to say what that is all about. It sounds pretty progressive, in that it ostensibly gives almost anyone access to that network. But when you start thinking about how that's supposed to be implemented? The devil may very well be in the details.

Revised 700 MHz Band Plan For Commercial Services
Source: The FCC

The incumbents would no doubt prefer not to have to deal with yet another competitor with resources and savvy. Google has plenty of both, and may still bid. The FCC set it up so that bidding will be blind; the incumbents will not know who they're bidding against, so they will not be able to deliberately and systematically outbid Google.

The FCC was always going to reserve some portion of the auctioned spectrum for emergency services. The implementation will be interesting: the commission will auction off that spectrum to a single, private corporation, which must build the network within 10 years and administer it. Police, fire, and other emergency services will be built-in customers. It will all be supervised by a Federal agency.

But the FCC didn't think that was incentive enough, so it's giving the winning bidder another chunk of the spectrum to do with as it will. Plus the winner will be able to use any fallow capacity in the emergency band for commercial services.

Conservative dogma is that private industry will always be more efficient than government, but even if true, it is a generality only. In specific instances, any given company can be more miserably run than any given public institution. If there's one thing the Federal government isn't likely to do, it's file for Chapter 7 bankruptcy, which in my opinion is a highly salient quality for an organization running an emergency resource.

The FCC also set minimum bid prices, including $10 billion for the entire auction. If those prices aren't met, the FCC can re-auction the airwaves without the mandates to accommodate any device and public safety.

Brian Santo, IP Capsule Editor & CED Magazine Editor

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