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Wireless Carriers looking for Elbow Room
pillageplunder writes "Businessweek is reporting on the upcoming Wireless Spectrum Auctions. Over the next two years (Starting in Jan 2005) the FCC will auction off enough spectrum that will more than double the amount currently available. Estimates range anywhere from 50 to 70 billion dollars will be raised by these auctions. Short term, it should improve the quality of Cell-phone, long term, it should open up opportunities for so-called 3G services to take off."
The gomment should be renting spectrum, not selling it outright. That way we would have an income stream , not just one payment to squander.
The article isn't very well written. It says that more spectrum will help carriers increase coverage. That isn't true. It would allow some carriers to provide native coverage (as well as sell service) in some new markets, but more licenced spectrum won't increase coverage at all. Spectrum increases capacity. That means less system busies and the ability to let customers use more of the system's capacity for things like data.
It also suggests that Verizon and Cingular are in the same spectrum position which isn't accurate. In many markets (including mine) Cingular has nearly twice the spectrum of Verizon. This also leads me to think that Verizon will be a bidder in the auctions. Another thing that they don't mention is that the lesser carriers (T-Mobile and Sprint) often have equal or greater amounts of spectrum to Verizon in most markets.
These auctions allow carriers to increase their capacity in their current markets and to move into markets where they aren't able to offer service because they aren't licenced for it - like how Verizon isn't licenced to operate in Oklahoma City. It won't increase coverage as the article suggests.