Airwaves auction rules favor big carriers

Plugged In

August 02, 2007|By Mike Himowitz | Mike Himowitz,Sun Columnist

Suppose the government held an auction and sold off the right to build all highways. Then suppose all those highways were bought up by big auto companies. And suppose those companies not only charged exorbitant tolls, but forced you to drive cars they sold, to buy gas at their service plazas and to play their stations on your radio.

Sure, you would find a few roads where you could drive any car you want. But you might not get very far. In fact, when you crossed the line from Ohio to Indiana, the engine would start knocking and the radio would stop playing altogether. Unless, of course, you wanted to pay an even higher toll.

Now the best part. In exchange for granting this license to gouge us for the next century, the government gets the vast sum of $15 billion - almost enough to keep our little exercise in Iraq going for two months.

This might sound like the ranting of an old conspiracy theorist, but it's exactly what the Federal Communications Commission plans to do to us in 2009. Only the FCC's highways are the airwaves - in particular, the 700 MHz spectrum that we use for broadcast television.

On Tuesday, the FCC established rules for auctioning these airwaves. In essence, this determines how they will be used once the nation switches to digital broadcasting in February 2009, and millions of our traditional TVs turn into doorstops. This is not something you and I asked for, by the way, but we're stuck with it.

The questions are: Who benefits from the sale? And what do we - the people who actually own these airwaves - get from it? The best I can say about the rules is that they aren't as awful as they might have been.

First, the FCC will toss a few crumbs of the spectrum to police, fire, rescue workers, National Guard units and other "first responders."

For years, first responders have begged for new frequencies so they can talk to one another during hurricanes, floods, earthquakes and other disasters.

This will satisfy the collective conscience of the unholy alliance of lawmakers, TV makers, regulators and broadcasters who hatched the whole complex scheme to switch to digital broadcasting - and used the emergency community as an excuse for it. That switch means huge profits for TV makers, more channels for broadcasters to sell more commercials and freed-up TV spectrum for the wireless carriers to snap up at auction.

Beyond what goes to first responders, the rest of the 700 MHz spectrum is just as ideal for mobile phones and other wireless gadgets. In the world of telecommunications, it's prime right of way to the only undeveloped stretch of beachfront property left in America.

So you can expect the big carriers who have a chokehold on the existing business - Verizon, AT&T, Sprint and T-Mobile - to spend truckloads of money to outbid everyone else. They have really important plans for these frequencies - such as broadcasting Simpsons reruns to your cell phone.

From a consumer's standpoint, the good news is that the FCC will license a chunk of the newly emancipated frequencies by geographical region - and auction them to carriers with the proviso that consumers must be allowed to use any compatible device on them.

This is a semi-big deal - the first chink in the armor of the wireless carriers who now have a chokehold on your cell phones and wireless hand-held computers.

Here's why: On the regular Internet, you can use any computer and any compatible hardware and software. You also can access any online feature or service you like. You can visit Google, Yahoo or Ask.com for Web searching; eBay for auctions; MapQuest or Google Maps for directions; Wikipedia for general knowledge; and so forth.

All your Internet Service Provider sells is access to the metaphorical on-ramp to the highway where these shops are located.

Not so with mobile phones and other wireless gadgets that depend on common carriers. They decide what phones you can buy, the conditions under which you'll use them and which applications will run on them. That means they control Web browsers, GPS mapping and navigation service, e-mail, news, text messaging, games, video and so on. You can't go anywhere you they don't want you to go or use any software they don't provide.

For example, Apple's new iPhone runs only on the Cingular/AT&T wireless network, which means you can't use one if you're a Verizon or Sprint/Nextel customer - unless you want to spend up to $175 to cancel your current contract and switch over to AT&T's much less robust phone and data network.

You'll need a Verizon-authorized phone to get that company's V-Cast capsule news broadcasts or use VZ Navigator to keep you from getting lost. But you can't receive live video from an AT&T customer who uses that carrier's new Video Share service (see accompanying article). And you can't use phones from either of those companies to get the walkie-talkie features that Sprint/Nextel offers. And so on and so on.

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