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Spectrum Auction: It's a Date

The 700 MHz clock began ticking Friday after the Federal Communications Commission (FCC) announced it would officially commence the auction of the spectrum on January 16, 2008.

"Auction 73," as it's dubbed by the FCC, will sell off 1,099 licenses in the 698 to 806 MHz band, which includes spectrum currently used by analog TV. United States broadcasters are scheduled to hand over their analog spectrum and cut everything to digital on Feb. 19, 2009.

In addition to raising billions for the U.S. government, the auction is also expected to usher in a range of new wireless broadband services.

Aside from assigning a start date, the FCC is also seeking comment on auction procedures, minimum opening bids, bid withdrawal rules, and pre-defined bid amounts, as well as the auction's overall design, which includes pre-determined packages of specified licenses. The FCC is also preparing the auction to consist of sequential bidding rounds, but those details will not be released until at least one week before the start of the auction.

Under the proposal (Word document) issued Aug. 17, the FCC will allow for anonymous bidding, to "reduce the potential for anti-competitive bidding behavior, including bidding activity that aims to prevent the entry of new competitors."

That the auction will begin in mid-January comes as little surprise, as the FCC was already on the hook to commence bidding by January 28.

The FCC announced rules for the auction in late July, approving a range of "open access" stipulations -- including those for devices and the applications themselves -- that were sought by agency chairman Kevin Martin. Google (Nasdaq: GOOG) is among the companies that have already pledged to bid on the spectrum, but time will tell whether the Web search giant actually follows through. (See FCC Straddles Open Access Issue and Google Pledges $4.6B for Spectrum.)

Google, however, might still have an opportunity to offer wireless broadband in the 700 MHz band without having to buy spectrum. Google, Microsoft Corp. (Nasdaq: MSFT), and other members of the White Spaces Coalition are developing devices designed to tap vacant broadcast channels (TV white spaces) for broadband services.

The FCC's Office of Engineering and Technology recently dealt that group a setback, reporting that some early prototypes were poor at sensing the presence of a digital signal consistently and tended to cause interference on Digital Cable Ready (DCR) televisions. Microsoft countered in a filing of its own that the FCC tested a defective device and did not run tests on what the company believed to be a working spare. (See 'White Space' Worries and Busted! )

Although no cable operators have discussed any plans publicly, they, too, could factor into the bidding for spectrum in the 700 MHz band. Or, at least, the U.S. cable industry's primary lobbying arm, the National Cable & Telecommunications Association (NCTA) , has pressed the FCC to give cablers a fair shot at bidding for such spectrum, shooting down claims that MSOs might enter the auction just to derail broadband competition and hoard valuable capacity. (See Cable Wants In on TV Spectrum Auction .)

Then again, some MSOs may avoid the bidding altogether -- at least those that are part of SpectrumCo LLC, a joint venture of Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. , Time Warner Cable Inc. (NYSE: TWC), and Advance/Newhouse (Bright House Networks ), which won 137 wireless spectrum licenses last fall for the FCC's auction of advanced wireless services (AWS). Sprint Corp. (NYSE: S), by the way, has announced its intention to exit the joint venture. (See SpectrumCo Gets Licenses and Sprint to Exit SpectrumCo Venture .)

The remaining SpectrumCo members have not signaled how they intend to use those AWS licenses. Those MSOs are "trying to understand the best use for that spectrum," Time Warner Cable CEO Glenn Britt told analysts and reporters earlier this month during that company's second-quarter earnings call.

— Jeff Baumgartner, Site Editor, Cable Digital News

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