The 700 MHz Window of Opportunity

The activity surrounding the auction of 700 MHz has been vigorous. As well it should. There is much at stake. The “beachfront property” broadband opportunity represented by 700 MHz spectrum does not come along often. The wireless broadband applications that 700 MHz spectrum can empower could prove very lucrative to the winning bidders. Use of this spectrum could conceivably provide a viable third broadband pipe into the home and beyond. Estimates for the U.S. Treasury's take from this auction range from $10 billion to $20 billion or more.

But the real story here is not the promise of the technology, it's the auction process itself. For some of the reasons stated above, and others, numerous proposals have been offered to the FCC that advocate changing the process.

One of the more interesting ideas comes from Google. It suggests changing the current auction system to one that is dynamic, or real-time. In other words, use of the spectrum would be paid for as it's used versus the current system, which requires payment in advance. Google suggests that this new way of allocating spectrum would remove the inefficiency of the current system, which leaves “ … the vast majority of viable spectrum in this country [going unused] or grossly underutilized.”

The company also suggests that a more dynamic system will lower the barriers to entry, allowing smaller firms and entrepreneurs to get in the game. Coming from a different angle, Frontline Wireless is proposing an auction for a national footprint of spectrum. Their proposal requires the winning bidder to allocate a portion of the spectrum for a national public safety network. Yet another proposal from Cyren Call suggests the auction process should be bypassed altogether, and that spectrum should be granted to them for a national public safety network.

Regardless of motivation, these proposals have incubated a healthy and spirited debate on spectrum management policy in this country.

An argument can certainly be made that not all in the U.S. enjoy the tremendous benefits of wireless services and their many applications. There are wide geographic gaps of coverage, particularly in rural areas, where citizens are unable to access reliable wireless service. The frustrating factor about these service coverage gaps is that smaller independent carriers are willing but unable to serve these areas because of the lack of spectrum.

Spectrum policy may not be totally to blame for this inequity, but it plays a major role. The FCC should use the 700 MHz auction to address and improve this situation. The status quo, while much easier to implement, should not be allowed. Our nation has a real opportunity with 700 MHz to improve wireless and broadband coverage to underserved communities. By thoughtfully examining and not discounting the proposals offered by companies like Cyren Call, Frontline, Google and others, the FCC may have a window of opportunity to make positive change.

Bernie Arnason is managing partner of Pivot Media LLC., an industry research and analysis firm. He can be reached at bernie@pivot-media.com.