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Technology Stocks : Qualcomm Moderated Thread - please read rules before posting
QCOM 172.98+1.1%Jan 2 9:30 AM EST
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To: blimfark who wrote (66065)7/11/2007 9:02:01 PM
From: kech  Read Replies (1) of 197073
 
Basically, Google wants to rig the auction so that the spectrum has certain restrictions on it which will mean that existing wireless companies like Verizon won't want to bid on it. The restrictions are similar to "net neutrality" for wireline. In other words, it opens access to the spectrum instead of making the spectrum an asset in which the telco invests in to get an expected return.

Kudlow pointed out that this is what was wrong with the Telecom Act of 1996 and why the Telecom industry blew up in 2001. The artifact of this act was that CLEC's had access to networks built by others at artificially low prices. This reduced the incentive of the owners to build out the network properly since they were just enabling their competitors downstream. The result was that there was overexpansion by the CLECs with underinvesment in the network that would connect the CLECs.

The council for Frontline kept saying that the way the spectrum is now, only Verizon would bid for it. I.e. if it was spectrum essentially owned by the operator, only the operator would invest in it - which is true, but somehow he seemed to imply that Verizon would have a monopoly. He might have meant that companies like Verizon would have a monopoly on the spectrum once they pay for it (which is true by design) and is the benefit, but he sounded like he was saying only Verizon could do this.

Personally that doesn't make much sense to me since there are many existing wireless companies out there that could bid - ATT, Sprint, Verizon, Alltel, etc.
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