As expected, 700 MHz auction results in same faces
It appears everything went as planned for Google. It didn't have to cough up any money in the 700 MHz auction but it ensured the open-access provisions (at least most of them) that it fought for at the FCC. But with the same faces, namely Verizon and AT&T, emerging as winners in the auction, the auction isn't going to change the face of the wireless telecom industry as industry pundits had hoped.
As exciting as it would have been to see a newcomer to the wireless landscape, incumbents such as Verizon have the wherewithal to spend billions on licenses and billions more to build out network infrastructure. That's their core business. And with the 700 MHz band the last of the so-called beach-front property, operators were prepared to drive the price up to a hefty level, especially given the fact that new 4G networks need a nice chunk of extra spectrum, about 20 megahertz, to deliver the broadband data speeds that are advertised.
So the question is, how "out of the box" will Verizon be in the C Block? We're already seeing that Verizon's new open-access policy on its existing network requires a few hoops to jump through, namely third parties must first get their devices certified by the operator. And that process is expected to take four to eight weeks to complete. Likewise, the C-Block rules include a "minimal technical requirements" clause when it comes to any device and application running on the network. Certainly, whether or not these technical specifications are easy for developers to use has bearing on whether or not third parties can create innovative and compelling applications.
Will it become an environment where developers are put in a position where they have to foot the bill to build devices and services and then keep their fingers crossed that Verizon will certify them? How attractive of a proposition will that be?--Lynnette
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Posted by Derek Kerton | March 24, 2008 - 7:46pm
This isn't as bad as it seems. Sure, the VZW process still requires network certification - but we knew that was going to be the case from their original announcement of "openness". Last week's meeting was just the presentation of the more developed plan for how VZW will become "open". They stayed on course, no surprises.
So, regardless of the fact that it isn't totally open, it still is a great deal more open that VZW ever was in the past, and I call that significant progress. Sure, GSM is more open simply by virtue of the fact that the account info is all stored on the SIM, and the SIM can be slipped into any available GSM device you choose.
And VZW's openness, to be sure, is mainly a response to competitive pressure from the other carriers (mainly Sprint) that are proposing that their 4G networks will enable any device with an embedded radio. Sprint already proved their intentions with the wireless service bundled in the Amazon Kindle.
As mobile phone penetration approaches saturation, the way to continue subscription growth is to start selling wireless subscriptions not just to people, but to their cars, vending machines, sensors, laptops, cameras, etc.
And we shouldn't complain too much about the certification hurdle, until the day when it seems Verizon is being deliberately obtrusive. VZW certification or not, it is NEVER trivial to commercialize a new wireless device, whether GSM, CDMA, or whatever. There are also certification standards for GSM devices (see http://kiica-sv.com/printable_view.php?id=72). And the FCC needs to certify and authorize the use of any cellular radio product for the USA, and believe it or not, so does the FDA (see the bottom of this page http://www.fda.gov/cellphones/).
All this backlash against a 4-6 week approval process? Really? Assuming VZW delivers on that promise, it will be a trivial part of the overall challenge of legally commercializing a device with an embedded two-way radio.
Posted by Anonymous | March 24, 2008 - 9:20pm
Derek,
I would appreciate speaking with you. Could you please contact me at john1@zlocus.com. Thank you.
John
