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Technology Stocks : BLUE WAVE SYSTEMS-BWSI A comer in telecom -- Ignore unavailable to you. Want to Upgrade?

To: John F Beule who wrote (95)	5/26/2000 8:59:00 AM
From: John F Beule	Read Replies (1) \| Respond to of 170

From ecompany.com If only the mobile phone carriers could push more data through the airwaves at faster speeds, maybe this wireless Internet thing could finally take off. But to do that, they will need more radio spectrum. So it's a good thing that two big blocks of spectrum are set to be auctioned off in July and September. But is it good enough? "We are on the verge of a spectrum crisis," warns former FCC chairman Reed Hundt, author of You Say You Want a Revolution and a senior adviser to McKinsey, the white-shoe consulting firm. "When there is both a tremendous demand for spectrum and a tremendous shortfall," he explains, "the price for spectrum goes sky-high and innovation goes down because capitalists devote themselves to acquiring spectrum instead of innovative technology." If last month's spectrum auctions in Britain are any indication-they brought an eye-popping $35 billion into the government's coffers-the upcoming U.S. auctions should be a blowout. Most of the mobile carriers in the United States, especially AT&T Wireless and Nextel, need the extra spectrum to roll out new high-speed wireless Internet services or merely to relieve congestion on their already overburdened voice networks. And new players such as Cisco, Global Crossing, Microsoft, and Qwest might join in the bidding frenzy as well. These companies are keen to offer new services such as fixed wireless broadband Internet access or wireless local area networks. In the wireless world, spectrum is the pipes through which bandwidth flows. And as we know so well from the wired world: No bandwidth, no business. But we now find ourselves in the absurd situation in which companies are willing to spend more on spectrum than they are on the technology and infrastructure needed to take advantage of that new spectrum. That brings us back to Hundt's point: Wouldn't it be better if these companies spent their billions on new-fangled technologies and services to make all of our lives just a little zippier instead of into a sinking cost that is the equivalent of buying really expensive real estate? "Those prices are created by a government monopoly," rails Hundt. "You want the spectrum in use; You want it ample, you want old technologies to be swapped out for new technologies, and you want competition among spectrum users. When somebody pays an arm and a leg for spectrum they then become a special-interest lobby against the auction of any other spectrum. It is just bad policy to have limited spectrum." No argument here, Hundt, but, uh, didn't you help create that policy when you headed the FCC? (Wait, he's got an answer for that: "I was hornswoggled by the other commissioners.") If you need proof that Hundt is right, look no further than the so-called C block of spectrum, set to be auctioned July 26. It's actually going to be reauctioned, as it's a leftover from the PCS auctions back in 1996, when companies such as NextWave bid so much for spectrum that they ended up going bankrupt. It's just now coming back on the block. How's that for sparking innovation? The second block of spectrum, scheduled to be auctioned in September, is in the 700-MHz range, and is currently occupied by broadcasters. The auction was originally scheduled for May, but had to be postponed because somehow Congress agreed to let the current occupants keep the spectrum until 2006 -- while at the same time demanding that the auction be completed by the end of September! Don't worry, they'll work it out. You can bet that little grandfather clause is already being renegotiated. Some experts believe the 700-MHz spectrum is the best that's ever been released for a slew of technical reasons, and it will be the key to next-generation wireless Web services. So how do we ensure that companies will be able to use this precious resource as a foundation for tomorrow's Internet instead of financially crippling themselves trying to get it? Well, as you might have suspected, Hundt has an answer for that too: "All channels from 52 on up should be freed up for wireless data." Make that a revolution to go, please.