Telco CEO Expects 700 MHz Devices to Crack Cell Networks
SAN JOSE -- Devices such as the iPhone and a Google phone for use in the 700 MHz spectrum eventually will pry open proprietary cellular networks, said a small midwestern telco’s CEO. “It’s real,” said Pat Riordan of Wisconsin’s Northeast Telephone, referring to a rumored Google handset. “I think they're going to make it and I think it’s going to change the nature of the business… This could open the whole thing up.” Riordan spoke late Tuesday on a panel at USTelecom’s Executive Business Forum.
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Executives called wireless broadband key to diversifying away from voice and staying ahead of rivals. But they warned of potential 700 MHz pitfalls. Riordan said experience shows how easy it is for entrants to catch auction fever, bidding successfully but unable to make money on those purchases. President Trent Boaldin of carrier Epic Touch said capacity considerations may make WiMAX in different spectrum more attractive for wireless broadband than the 700 MHz, which he called likely to end up being used largely for voice traffic by providers including AT&T and Verizon, which want to bypass other local wireline incumbents.
Blind bidding means the 700 MHz auction will be “a true mess,” Riordan said. “You could be bidding against AT&T. You could be bidding against your neighbor. You just don’t know.”
Small rural carriers’ best 700 MHz opportunities may come from doing the heavy lifting in partnerships with a spectrum winner like Google, Yahoo or Microsoft, speakers said. “They could buy the spectrum and we could build out a network and operate it,” Boaldin said, adding that the “content providers got what they wanted -- open access,” so that may dampen any interest in bidding on content. Riordan thinks Google will bid for the 22 MHz of spectrum, he said. Frontline probably will grab the 10 MHz for public safety and private use; its business plan calls for working with rural carriers, he said.
The auction’s buildout requirements “are among the most aggressive the FCC has ever adopted” for wireless spectrum, said Bryan Tramont, chief of staff to Michael Powell during Powell’s tenure as FCC chairman. Open-access rules for the C-block are largely “an outgrowth” of lobbying by Google, he said. But the FCC may not have laid out requirements well enough to make open access work, Tramont said.