FCC auction may spur mobile broadband networks

By Giselle Tsirulnik

February 7, 2008

Nadine Manjaro is senior analyst at ABI Research

The Federal Communications Commission raised about $18.9 billion in its 700-MHz auction, exceeding its own early estimates of getting bids between $10 billion and $15 billion. Now expect some major changes in mobile.

The fact that the demand for 700 MHz is increasingly growing obviously is good news for the FCC. The auction began Jan. 24 and since then the FCC and wireless experts were concerned about meeting those estimates in the face of an economic slowdown.

"This shows that demand is still great for this spectrum," said Nadine Manjaro, senior analyst at ABI Research, New York. "It opens the door for new innovators to come in and change the wireless industry.

"Like, for example, cable companies can use the spectrum and launch their own mobile broadband networks and alleviate the need to rely on wireless operators," she said. "Google draws the most speculation, since the company's entrance into the wireless market could significantly change the wireless industry."

Wireless carriers currently dominate the mobile landscape and this auction may be the last opportunity for new participants to gain ground.

New auction participants include Google, Microsoft cofounder Paul Allen's Vulcan Spectrum, Tower Stream and Cox. Traditional participants include Verizon Wireless and AT&T.

Carriers are set on strengthening 4G deployments. With that in mind, the 700 MHz spectrum will improve rural and in-building coverage at a lower cost than existing frequencies.
�
"The 700 MHz auction could totally change the way of wireless broadband services in North America and beyond," Ms. Manjaro said. "Google's interest in the C block was influenced by Verizon's move to open up its network, just as Apple's introduction of the iPhone stirred up the mobile phone market."

If one of these companies succeeds in its bid -- Google, Cox or the others -- then mobile marketers will need a completely different business model, Ms. Manjaro said.
�
"This will open a lot of doors for marketers, as new and improved phones mean more and more advertising opportunity," she said. "The business landscape would change, with more personalized services."