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FCC delays, firms up rules for 700MHz auction

updated 04:45 pm EDT, Tue October 9, 2007

FCC 700MHz Auction Rules

The Federal Communications Commission today solidified some of the rules for the upcoming 700MHz auction early next year, potentially deciding which companies can participate in an event which may decide the future of cellular calling or wide-area Internet services. The US regulatory body has set a $10 billion cap on the value of the entire spectrum that will be available, preventing companies from using money alone to outbid others. Small companies which make no more than $40 million will also receive a discount on their winning bid price, the organization says.

However, the "C" block that requires a winner maintain open access will remain limited to higher-tier bidders, according to the new rules. Any company hoping to use the wireless band will need to meet a reserve price of at least $4.63 billion at first. If the price is not met, a second auction will take place that strips the open access rules but which may change which regions are affected by the auction.

These changes may shift the rules in favor of Google, which had promised to spend $4.6 billion or more to snap up the newly available wireless frequency to ensure that the company itself and relative newcomers could compete against incumbent cellular providers. Multiple larger US carriers have objected to the auction's open access rules as it would threaten their business models, which currently rely on locking customers into long-term contracts to get access to certain devices and services. Verizon recently sued the FCC claiming unfair exclusion and has reportedly conducted illegal lobbying to persuade FCC chairman Kevin Martin to ease the rules and favor a locked-down model.

If successful, Google has suggested it would encourage the development of long-range wireless Internet access that could be used by any compatible hardware and software. The company is said to be developing a mobile OS whose open-source, platform-independent nature would encourage such access. Handset makers which operate in the US, such as Apple and Nokia, could also benefit in the long term by the inclusion of a technology which would function with more than one carrier and without restrictions on which software can be used.

As part of its updated rules, the FCC also pushed back the start date for the auction by eight days, moving it to January 24th of next year. No specific reason was given for the delay.

By Electronista Staff
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  1. BelugaShark

    Fresh-Faced Recruit

    Joined: Aug 2007



    "$10 billion cap on the value of the entire spectrum that will be available, preventing companies from using money alone to outbid others"

    You call that a cap! That sounds more like a Buy-It-Now price.

  1. bcthedj

    Fresh-Faced Recruit

    Joined: Jul 2004


    Real Value

    Good catch belugashark, and probably closer to the truth than the FCC would ever admit.

    Let's hope Google (maybe in concert with Apple) wins this, or the 'current powers that be' will bury this once in a Century opportunity to maintain their current monopoly and keep biz as usual.

    Maybe the only historical comparision to what this truly represents would be the Railroads in the 1800s. Do your own homework on that one if you don't know what I'm talking about.

    And, to say $10B ?

    That's a joke.

    The 'real value' of this, in the long run, will be Trillion$.

    Am confident Google/Apple are confident of that fact and are willing to mortage the farm to win.

    We all better damn sure hope so.


  1. sixcolors

    Fresh-Faced Recruit

    Joined: Oct 2001


    Apple should buy it

    Apple should give a company (oh lets just say the one I work for) some VC to buy up the spectrum to provide cheap, contract free access to mobile data and voice services.... As a nice bonus they should buy spectrums in Canada, Mexico the UK, France, Germany, Japan etc and link them all so that you have a world wide network!

  1. sixcolors

    Fresh-Faced Recruit

    Joined: Oct 2001


    One more feature

    Flat rate unlimited use. You pay for the service (lets say $60/month, $25/week, $5/day) and that's it.

    My wireless idea needs your VC.

  1. UberFu

    Fresh-Faced Recruit

    Joined: Oct 2002



    I don't think either Apple or Google need to "mortgage the farm" considering that they have assets in the range of $19.5 and $18.5 billion [respectively]_

    I think they could both bite off the full 10 Billion and be okay_

    But I don;t see Apple slugging it out until the end [I could be wrong though]_

    If anything I see the lead Phone Companies battling some - then probably Google and Verizon and AT&T ultimately duking it out_

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