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Feature Story / Verizon
Wireless, the highest bidder in the
multibillion-dollar sale of prime airwaves
disclosed its plans for the wireless spectrum
Friday, and the most prominent loser explained why
it was still a big
winner.
A day after rules prohibiting
participants in the federal government's online
auction from discussing their strategies lifted,
Verizon Wireless said it would use the new capacity
to roll out faster wireless Internet service by
2010.
Verizon outbid Google Inc., paying $4.74
billion for one of the auction's biggest prizes, a
coveted nationwide block of
airwaves.
For Google, a company that's obsessed
with auctions, the spectrum sale turned into a
high-stakes exercise in
gamesmanship.
The Internet company failed to land any
of the nearly 1,100 spectrum licenses auctioned
off. Still, its bidding -- conducted from a small
"war room" on its Mountain View, Calif., campus --
helped push the swath bought by Verizon above the
$4.6-billion minimum price set by the Federal
Communications
Commission.
Surpassing that threshold triggered new
rules that forced the winning company to allow
consumers to use any device or application on those
airwaves.
One big beneficiary of those provisions:
Google. The company lobbied hard for them to ensure
that people could access Google's maps and other
advertising-supported applications in the growing
mobile market.
Google kept bidding until it hit that
minimum price and said it had been prepared to buy
the airwaves. If it had won, Google probably would
have joined with another company to build the
transmission towers and run the
network.
Part
02
/
CTIA WIRELESS 2008, April 1-3, 2008.
Las Vegas Convention Center. Sir Richard
Branson, of Virgin Group will deliver the opening
show keynote address at 9 a.m. on April 1 in the
Barron Room at the Las Vegas Hilton.
The
"Bunny Box" and "Femtocell" routers
"As more and more people drop their
telephone land lines, every home or office will
need an antenna tower somewhere around the
premises, say Troy Cory, of TVInews.
The Wireless Telephone industry is
facing a great RF pick-up challenge: poor Wireless
Telephone. Troy says, "a Prison Cell has
about the same cellular coverage as most residences
do."
To tackle the problem, a few smart
"Bunny Box" manufacturers are looking at providing
devices that would essentially give customers their
own, private cellular towers.
The devices look much like home-computer
wireless Internet routers, with rabbit ears
attached.
In February, 2009. a analog Wireless
Telephone or TV-set componant will need a
digital converter boxes to be enabled to pick-up
all RF TV-radio signals in the
future.
The devices will make The Wireless
Telephone work like cordless phones,
connecting to the "bunny-box" router station. Some
industry folks have renamed the "digital converter"
as a "femtocell." ("Femto" is a scientific term for
something that is very small, a device that a male
plug can be inserted into).
Verizon Wireless is joining Sprint
Nextel Corp. in jumping on the "bunny-box" or
"femtocell" bandwagon, rolling out the devices this
year in exchange for the $40.00 coupons being
issued to U.S. consumers, by the
FTC.
THE CEOs and
THE FCC PERSONALITIES to the BIDDING PROCESS --
HAVE A SAY SO!
Lowell McAdam, Verizon Wireless / Kevin
Martin, FCC Chair - Open Wireless Network Plan
/
LATimes reported
that -- Kevin
Martin, chairman of the Federal Communications
Commission, on April 1, 2008 said he would
recommend that the agency reject a Skype petition
to require wireless operators to open their
networks to any wireless device and
service.
During his keynote at the CTIA Wireless
conference in Las Vegas, Martin called the wireless
industry "the poster child for competition," and
said the Internet telephony company's request was
"premature."
"Verizon has
committed to opening its entire network.
Skype in February 2007 filed a petition
with the FCC, requesting that the agency apply a
1968 landmark regulatory decision to the wireless
industry. The so-called Carterfone regulations
allowed all devices to be connected directly to the
AT&T network, as long as they did not cause
damage to the system. If Skype is successful in
convincing the FCC to apply the same regulations to
the wireless industry, then it would mean that
device manufacturers, Internet portals, and others
would be able to offer wireless gadgets and
services on cellular networks without the approval
of operators.
Martin said he would like to see the
wireless industry take the lead in opening up
networks to competition, so the FCC could take a
lesser role. Government, however, still has the
responsibility to ensure a competitive market that
fosters innovation and brings competitive pricing
and services to consumers, he
said.
As an example of a legitimate role for
government, Martin pointed to the FCC mandate for
Enhanced 911 capability on cellular and
voice-over-IP telephone calls. The mandate requires
wireless carriers to be able to triangulate an
emergency call to within 100 meters. The commission
has also added assisted GPS, or A-GPS, as an
alternate technology for locating calls.
Part
03 /
DURING THE NAB
MEETINGS, THE BIG TALK WAS "The FCC Winners.
Verizon Communications Inc. Chief
Executive Ivan Seidenberg said Friday that the
$9.36 billion in total spectrum licenses won by the
company's wireless unit, jointly owned with
Vodafone Group, was "nothing short of a
transformative opportunity for our company."
He downplayed the FCC's open-access
conditions on a major portion of the spectrum it
won, saying the industry was headed in that
direction anyway. Verizon Wireless has pledged to
let customers use any device or software program on
its entire network by the end of the
year.
AT&T was second to Verizon, winning
$6 billion in spectrum licenses, which it also
plans to use for high-speed Internet service. But
its executives said they didn't bid for the portion
subject to the open-access rules. The parts it did
land cost AT&T nearly three times as much per
unit of spectrum than the portion Verizon
bought.
With concerns that the open-access rules
would lead large wireless companies to ignore that
portion of spectrum, Google had promised to bid at
least the minimum. Bidding was anonymous and,
following the auction rules, started below the
$4.6-billion minimum price. Google was the only
bidder for several days at the auction's start, and
it stopped after a $4.71-billion bid on Jan. 31.
Verizon topped that three days
later.
Having met its primary goal for the
auction, Google never submitted another bid, Adler
said.
But making a play for the wireless
spectrum became more than just a business
proposition. It also was "a new sort of puzzle to
figure," said Minnie Ingersoll, a product manager
on the auction team.
Google uses its own auctions to sell ads
linked to search results. And the FCC's complex
online auction appealed to the geeky side of the
company's founders,
Larry Page and Sergey Brin."Larry and
Sergey really dove into understanding the details
of the auction," Adler said.4.
Bylines
/ Lowell
McAdam, Verizon Wireless
Before Martin's speech, Lowell
McAdam, president and chief executive of Verizon
Wireless, railed against government
intervention in the wireless industry. In his CTIA
keynote, McAdam said government regulations at the
local level have slowed construction of
transmission towers, leaving areas in the United
States without coverage. In addition, burdensome
taxes have added to the cost of services to
consumers and have stifled innovation by making it
difficult for small companies to enter the
market.
McAdam was particularly adamant about
not having the wireless industry become as heavily
regulated as the older wired telephone market.
"Customers bring the best type of regulation by
their right to choose," he said. "To go backward is
dangerous and downright
dumb."
To keep regulators out of the market,
McAdam called on the industry to police itself to
ensure an openness that gives all companies a
chance to compete and innovate, bringing maximum
benefits to consumers. "That is how we uninvite
potential intrusion by regulators," he said.
GO
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Acknowledgements
"Wireless"
Josie
Cory
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