Wireless communications auction will offer 700MHz

Wireless communications is big business, but AT&T doesn’t feel that the new 700MHz, up for auction in January, will be suitable to build a profitable business on it given the open-access rules set for the spectrum.

Auctions are a golden opportunity for most businesses, but AT&T is unsure about a business model using the 700MHz. Part of the reason is the rules and conditions by the Federal Communications Commission. Data consumption on wireless networks is growing four times each year so a company like AT&T needs to bulk up on spectrum to keep up with the demand.

700 MHz is packed with conditions by the FCC; the spectrum winner must allow any wireless devices to connect to the network which include both handset devices from other carriers. The winning bidder cannot block or throttle wireless and Web content from competitors.

Google and some consumer advocacy groups wanted the FCC to require that winning bidders resell the spectrum at wholesale rates to competitors, but the FCC ignored the suggestion.

For long-range telephone and broadband companies, the spectrum is ideal with signals that can travel up to four times farther than in higher spectrum bands.

The FCC will auction 62MHz of spectrum in the 700MHz band beginning January 2008. Estimates could be in the billions of dollars.