Potential bidders await details of 700 MHz auction

Google Inc. Chairman and CEO Eric Schmidt left the door open to bidding on wireless licenses when the 700 MHz auction begins in mid-January, but the Web search-engine giant and others are not apt to make final plans until after the Federal Communications Commission acts on likely challenges to last month’s rule making decision.
“When we looked at the FCC ruling, we felt we got the spirit of what we were asking for. So without announcing the bid, I think it’s highly likely that when we get to that point we will see the regulatory framework and so forth as conducive to the bid that we said we would make,” said Schmidt last week at the Aspen Summit in Colorado.
While Schmidt said Google “probably” would vie for wireless licenses when bidding begins Jan. 16 and that the firm is free at this time to have discussions with other stakeholders, he nonetheless seemed to hint the company’s strategy might depend on what 700 MHz rules look like after the FCC decision on expected petitions for reconsideration.
“It’s important to know that principles are different than the writing [of regulations], that actual rules matter-and those of course are in development. … We are very, very clear that in the U.S. we want an open network for wireless devices. We think it’s good for end users. It’s clearly good for Google. It’s also good for our competitors by the way,” Schmidt said.
Shortly before the FCC’s 700 MHz decision, Google vowed to bid a minimum $4.6 billion reserve price for a 22-megahertz block of spectrum if the agency agreed to four open-access principles it proposed, including a wholesale requirement. Frontline Wireless L.L.C., consumer advocates and public-interest groups backed full open access, while the mobile-phone industry largely opposed attaching conditions to licenses. AT&T Inc., parent company of the largest U.S. mobile-phone operator, broke with industry and agreed to limited open access just prior the agency’s July 31 decision. Lawmakers and federal regulators generally were split along party lines on the open-access issue, with Democrats backing it and Republicans opposed.
The FCC decision requires licensees of the 22-megahertz block to allow third-party applications and devices to connect to wireless networks, but rejects a wholesale mandate.
As such, the next big battle will involve efforts to revise the 700 MHz ruling. Petitions for reconsideration are expected to be filed
at the FCC later next month.
Public-safety groups, which profusely applauded the FCC’s creation of commercial/first-responder license at 700 MHz, are mildly perturbed about what they consider government micromanagement of the new public-safety broadband licensee. Indeed, the 700 MHz decision has caused complications to the newly formed Public Safety Spectrum Trust Corp. and temporarily halted its solicitation for an agent that will act as a liaison in negotiations with the winner of the nationwide 10-megahertz license.
The FCC is due to receive comments during next two weeks on competitive bidding procedures. The 1,099 wireless licenses up for grabs could generate more than $10 billion for the U.S. Treasury. The agency already decided to employ anonymous bidding as a safeguard against anti-competitive behavior in the auction. As such, everyone will be in the dark about which bidders won which licenses and at what price until after the auction closes.
Meantime, Council Tree Communications Inc. asked a federal appeals court in Philadelphia to rule on a challenge to small-business bidding rules revised by the FCC last year. The case, argued in May, has the potential to overturn the results of last year’s advanced wireless services auction.