ZO:Wall St. Jour: New Wireless auction:
.......... the spectrum being freed up -- originally
allocated to television broadcasters as UHF channels 60
through 69 -- also has the rare ability to easily penetrate
building walls, making it ideal for sexy new-age technologies
such as wireless Internet services and other high-speed data
applications.
TA
------------------
interactive.wsj.com
December 20, 1999
FCC's Next Airwaves Auction Pits
Old Guard vs. Internet Companies
By KATHY CHEN
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- A new federal auction of the airwaves is
becoming a battle between the new and old economies.
In the auction next spring, the government is planning to sell
licenses for a valuable band of electromagnetic spectrum
that may be used for everything from wireless Internet
access to traditional two-way radios.
Unlike past spectrum auctions that got little attention outside
the industry, this latest round is attracting everyone from
old-line manufacturers like Boeing Co. and Ford Motor Co.
to brash new-economy stars like Microsoft Corp. and Cisco
Systems Inc. With the Federal Communications
Commission set to draw up crucial auction rules as early as
this week, scores of companies are jockeying for position
before the bidding begins in late April or early May.
"This is beachfront property in spectrum," says Buck
Logan, a lawyer representing Silicon Valley startup
FreeSpace Communications LLC, which wants to buy some
of the spectrum to roll out a wireless national Internet
network. "It's very valuable."
That's because the spectrum being freed up -- originally
allocated to television broadcasters as UHF channels 60
through 69 -- also has the rare ability to easily penetrate
building walls, making it ideal for sexy new-age technologies
such as wireless Internet services and other high-speed data
applications.
It's impossible to say how high the bidding could go. Some
past auctions have been disappointments, others hugely
successful. But Congress has already spent some of the
money expected from the auction: In the latest federal
budget, lawmakers thought the auction would bring in $2.6
billion; it could easily produce more, given the wide
corporate interest.
"This is an auction for the new millennium," says FCC
Chairman William Kennard. "This can only mean good
things for the deployment of advanced technologies for
consumers."
A number of Internet heavyweights have expressed interest
in the event. FCC officials say executives from Microsoft,
Cisco and a major Internet-service provider, PSINet Inc.,
have come to visit the agency's headquarters here, mostly to
convey their concern that the auction be wide open to a
variety of companies. The officials say they think the
companies may be considering bidding for the spectrum,
whether on their own, in a consortium or by backing another
concern.
Most prospective bidders won't show their cards. Microsoft
spokesman Rick Miller says the software giant hasn't
decided, then adds, "I wouldn't discount" the possibility.
Up to now, he says, Microsoft's goal has been to ensure an
open bidding process. "We're always looking for better
ways to deliver services," Mr. Miller adds. "We want to
make sure the spectrum can be used for that, whether it's us
delivering the services or someone else."
A new breed of wireless Internet services would fit with
Microsoft's recent strategy of investing in or partnering with
cable, satellite and other firms providing high-speed
"broadband" Internet access.
That's exactly what PSINet of Herndon, Va., wants to do.
John LoGalbo, associate general counsel, says the company
will bid for a 30-megahertz block of the spectrum to
develop a fast, nationwide network that would permit
consumers to get on the Internet more than 50 times as fast
as regular phone lines permit.
Pitted against these high-tech companies are the old guard,
including Boeing and Ford, oil companies, utilities, airlines
and some members of the agricultural sector. They say they
badly need some of the spectrum for the two-way radio
systems that they have used for internal communications for
the last five decades.
These two-way bands are already congested, says Sharpe
Smith, a spokesman for the Industrial Telecommunications
Association, a trade group representing the private-radio
users. "A lot of our companies can't add people on, and
can't expand."
The companies have asked the FCC to set aside six of the
36 megahertz of spectrum being auctioned for use by
private-radio networks only. In a departure from the past,
when the FCC awarded them spectrum licenses for free, the
companies have agreed to bid like everyone else. Even so,
their potential competitors are crying foul over the proposed
restriction, and the conflict has set off a fierce, 11th-hour
lobbying battle.
The FCC has to serve other constituencies as well. Of a
total of 60 megahertz of spectrum that TV broadcasters are
giving up, the agency was directed by Congress to set aside
24 megahertz for use by police, firemen and other
public-safety users, leaving the other 36 megahertz for
commercial use. But to prevent interference with the
public-safety community's networks, the FCC is likely to
designate in its rules six megahertz of the 36 megahertz of
commercial-use spectrum as buffers, or "guard bands."
Occupants of the guard-band spectrum would operate at
lower power or offer other features that would protect
against possible interference.
Despite these potential restrictions, it's valuable spectrum
and a dispute has broken out over proposed FCC bidding
rules. The agency's staff has recommended that the
guard-band spectrum be restricted to private-radio use, and
that is being considered by FCC commissioners for
approval, industry executives say. Part of the staff's
rationale appears to be that private-radio systems operate in
a way that's similar to public-safety systems and haven't
caused much interference with them in the past.
Private-radio users and equipment makers like Motorola Inc.
agree with that thinking -- in fact, some likely bidders
believe, the FCC staff recommendation closely resembles a
plan proposed by Motorola earlier this year. They have
lobbied heavily for the guard-band use restriction, both at
the FCC and among the public-safety community, FCC
officials and the industry executives say.
"We have a long history of cooperating and sharing adjacent
bands with the public-safety community," says Industrial
Telecommunications Association President Mark Crosby,
adding that private-radio users can't afford to bid against the
big money of Internet companies and telecom carriers.
Adds Richard Barth, Motorola's vice president of telecom
strategy, "Lives are at stake."
Their arguments may be winning over some public-safety
officials. Private radio systems have "the comfort of
familiarity" for public-safety officials, says Kathleen
Wallman, chairman of an advisory committee to the FCC on
public-safety use of spectrum.
That's exactly the problem, say some newcomers. Yahoo!
Inc. recently sent a letter to the FCC urging it to open the
auction to as many bidders as possible. And Mike
Farmwald, founder of FreeSpace, the Silicon Valley startup,
says his company has developed a new technology that
could provide fast Internet access over a national network at
bargain-basement prices. The system would use tiny,
low-power radios that he says would be perfect for use in
the disputed six megahertz of guard-band spectrum.
Over the past few months, Mr. Farmwald has visited
Washington every two weeks to plead with regulators to
open the spectrum block to other uses besides private radio.
He has said he'll abide by any technical standards the FCC
wants to impose on users of that block, and even agree to
Motorola's plan -- he just wants open bidding.
But given the FCC staff recommendation -- and being new
to the ways of Washington -- Mr. Farmwald doesn't sound
hopeful. "As a naive semiconductor guy, I don't get it," he
sighs. "This just seems like the old way: government taking
care of industry in a certain way."
Write to Kathy Chen at kathy.chen@wsj.com
=================
Message #16005 from zbyslaw owczarczyk at Dec 20 1999 11:17AM
A New Era of Competition: Can Wireless Players Solve the 'Last Mile'
Problem?
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services may not be won by fiber or copper cable. As ILECs (Incumbent Local Exchange Carriers) gear up for possible
CLEC (Competitive Local Exchange Carrier) competition, and as companies such as AT&T and AOL fight over local access,
the scene has been set for wireless broadband providers to meet unfulfilled demand.
FCC Chairman William Kennard believes that 'wireless will break the back of the Bell monopoly in residential and local
markets.' This opinion is rapidly gaining favor among wireless investors, as LMDS (Local Multipoint Distribution Service) and
MMDS (Multichannel Multipoint Distribution Service) providers sit at the forefront of a more diverse market for Internet, voice
and data services.
Amid this growing wireless presence, a new report by MRG, 'Broadband Wireless Forecast and Business Opportunities
1999-2004 - LMDS, MMDS, and Other Wavelengths,' provides a timely overview of major LMDS and MMDS players,
and domestic market growth.
LMDS providers featured include Nextlink, Teligent, and WinStar. MMDS providers and suppliers profiled include MCI
WorldCom, Sprint, Bay Junction, WavePath, DNAI, LaunchNet, Slip.Net, CAI Wireless, and Wireless One.
Also examined are broadband system integrators, including Ericsson, Hughes Network Systems, Lucent Technologies,
Newbridge Networks, and Siemens AG; and related broadband wireless manufacturers including BEL-Tronics, Com2l,
Harmonic Data Systems, Hybrid Networks, P-Com and Stanford Telecom, plus others.
After providing an overview of broadband wireless technologies, the report then compares wireless with wired technologies;
provides various business cases; and examines the available services for wireless customers. Also discussed are the problems
and reliability levels associated with data over spectrum; and detailed pricing and forecasts for wireless services.
'Broadband Wireless Forecast and Business Opportunities 1999-2004 - LMDS, MMDS, and Other Wavelengths' is
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About MRG Multimedia Research Group, Inc.
Founded in 1990, MRG, Inc. has headquarters in Sunnyvale, CA, with research offices in New York and Tokyo. MRG
provides market analyses of new technologies in the communications industries.
SOURCE: MRG Multimedia Research Group, Inc. |
