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The 700-MHz auctions will be the big news in spectrum for 2008, starting before the end of this month. The list of declared bidders did not contain any earth-shaking surprises.

Welcome To 2008!

Wednesday, January 02, 2008

I hope you all had a great New Year’s celebration and, like me, you are ready to put the holidays behind us and settle down for some serious work. It shouldn’t be all serious though, we have to have some fun in our lives, too. But I see 2008 shaping up as an intense year in many different areas.




First, analog cellular systems can be turned off on February 18 of this year. I am sure AT&T and Verizon have already made their plans for what they are going to do with the spectrum and will move quickly to turn off analog and reassign the spectrum to other technologies. And AT&T will be completing its exit from the TDMA world, moving all of its customers over to GSM/UMTS.


However, this does not mean all analog systems in the United States will be turned off on February 18, it means they can be. A number of smaller operators still have a fairly large number of customers using analog in more remote areas and, as far as I know, they will be able to keep these networks in service.


In 2006, a number of companies showed up and bid on AWS spectrum. This year, we should find out what some of those who won the spectrum are planning to do with it. We already know T-Mobile will use it to launch UMTS, AT&T and Verizon will incorporate it into their existing networks and there is no doubt that Leap Wireless and MetroPCS will build out on some of what they bought but will trade or sell some of it as well.


But what about SprintCo LLC (Sprint and cable partners), which bought a total of 137 licenses covering 267,387,437 pops, or about 89% of the U.S. population? Last I heard, the partnership was not doing well and Sprint had decided not to continue to roll out new territories for converged cable and wireless services. So what happens to this spectrum? Is it enough for the cable companies to build out a system to augment their cable offerings? And what about the number of smaller operators and bidders who have not been heard from since the auction closed? I think we should learn more about these winners and their intentions during the upcoming year.


The 700-MHz auctions will be the big news in spectrum for 2008, starting before the end of this month. The list of declared bidders did not contain any earth-shaking surprises. There are the usual suspects, Google and a large number of smaller, regional existing or wannabe networks. The D block (shared public safety) looks like a three-way battle between Frontline, AT&T Wireless and Verizon Wireless with Google perhaps being a sleeper here. It is also possible that AT&T and Verizon will decide not to bid on this spectrum and let Frontline try to come up with a plan to work with the Public Safety Spectrum Trust and its agent, Cyren Call, in the hopes that the deal will fall apart and the FCC will try again, perhaps with a different set of rules.


Will Google bid to win or bid to ensure that the C block remains open access? (If the $4.6 billion reserve price is not met, the FCC can put it back out to auction without the open access requirements.) Will Google go for more than the C block? I think it is a safe bet that Qualcomm will bid for, and win, the E block, which is the 6 MHz of unpaired spectrum next to its existing MediaFLO holdings, and it is just possible that it might go after the shared D block and become a partner with the PSST.


The fun really begins after the auctions as all of the winners jockey for position, perhaps trade or lease spectrum to others and even partner with others. Meanwhile, of course, AT&T Wireless has already bought some 700-MHz spectrum from Aloha Partners and rumors are rampant that it is quietly going around to the owners of the rest of the spectrum and buying as much as it can. So even before the auctions start, it appears AT&T Wireless is ahead of the game.


There is also more “white noise” spectrum for unlicensed usage. White noise spectrum is between TV stations in a given city. One city might have Channels 3, 6, 10, 14 and 18 on the air, so the white noise spectrum is the 6-MHz-wide blocks that are unused in each city. The unlicensed crowd seems to have the ear of the FCC and Congress, but this being an election year, my bet is that not much will happen in this area.


Wireless Technologies


Even though the 700-MHz auctions will be decided this year, the build-outs won’t start until 2009 or 2010, and it appears to me as though the major players will build out 4G technologies, either UMB or LTE, with LTE having the edge at the moment because of the recent Verizon announcement that it will use LTE and not UMB as its 4G technology. Of course, if Frontline wins the D block, it could decide on WiMAX which, in my mind, would be a real mistake since one of the reasons for the public/private partnership is to drive down the cost of the devices the first responder community will use. I don’t believe there will be enough scale from WiMAX on only one segment of this band.


Speaking of WiMAX, perhaps we will learn how the Sprint soft-launch of its system is going. Will Sprint, indeed, start offering commercial service, spin it out or try to find a new joint venture partner? I believe the answer to this hangs on two things: If the new Sprint Nextel CEO really believes in WiMAX at 2.5 GHz or views it as a distraction from the company’s core business, and what Intel will do in the background to “save” the Sprint WiMAX play. Intel cannot afford to lose Sprint as its WiMAX network win in the United States.


Location-Based Services


2008 is a very important year for location-based services and the wireless industry. The Industry will either take over LBS as its own and work in conjunction with the consumer electronics and automotive companies, or it will simply continue to do what it is doing now and not attempt to become the driving force. Wireless is the link that makes LBS truly functional and important, providing traffic information added to turn-by-turn directions, map and point of interest updates, interaction with LBS and Internet browsing and many more areas where wireless makes LBS truly valuable. At the SiRF Location 2.0 Summit last fall, some challenges were laid out to the wireless industry, I believe the CTIA Wireless Internet Caucus has either begun or is about to begin an LBS SIG and the navigation (mapping) companies are being bought by others (TeleAtlas by TomTom, Navteq by Nokia).


The challenge before the wireless industry this year for LBS is to figure out how to step up and take charge of this market that is worth a lot of money to a lot of different people―a market that is greatly enhanced with real-time wireless connections. Let’s see what transpires this year. Either the wireless industry will get it right or we will end up simply providing wireless transport and the real money will be made elsewhere.




Is there any doubt that we will be seeing a 3G-capable iPhone this year? It won’t be the same iPhone with UMTS/HSPA added, but I suspect it will have many other refinements as well. One thing Apple does well is listen to its customers and incorporate new features and functions. For example, I expect to see the ability to update calendars and phonebooks over the air, the ability to have the phone remotely wiped of data if it is lost or stolen and, of course, more applications. I hope Apple decides to let customers set up the phone from the Website. The iPhone site is pretty lame and this would give customers greater access to the phone and the settings.


Meanwhile, there will be more handset action on at least two fronts. The first is that of additional IPKs (iPhone Killers). We have already seen a few from LG on Verizon and some on T-Mobile, but I am sure more are coming. The one thing that will keep me from using one of these devices is that they cannot be operated using one hand. I cannot check email, send a quick message, read SMS or even call voice mail when I only have one hand available, and I have to wonder how someone will use it in states where the law now requires hands-free operation. I know it supports Bluetooth, but it seems as though it is very limited in this area.


The next “big deal” of 2008, maybe, is if Android phones really are released toward the end of the year as promised. I suspect they will be delayed and that on January 2, 2009, I will be writing about them coming to market in early 2009, but I could be wrong. It will be interesting to see if Android truly is a user-friendly operating system for wireless devices, and I also have to wonder if it will include a desktop component, enabling customers to set up the phone from their own desktop and not have to do it directly on the device.


We will also see the first phones with the new Qualcomm SnapDragon processor, a 1-GHz processor that will bring a lot of new power and features to wireless phones. We are approaching the “ultimate” device from two directions: from the computer industry that wants to bring us ultra-mobile devices that will no longer fit in our pockets, and from the wireless industry where size and shape are important and functionality will be as good, if not better, than the computer devices with wireless capabilities added.


We will also see the first notebooks with the Qualcomm Gobi “universal” wireless chipset supporting GSM/UMTS and CDMA/EV-DO, giving notebook vendors the ability to build a single notebook model and ship it worldwide, giving customers the ability to sign up for the network of their choice and then travel almost worldwide, buying data by the day using either technology.


There will be more handset surprises and we will see some combination WiMAX/CDMA devices for the Sprint WiMAX network (at least they will be announced), and I think there are some real surprises out there waiting to be unveiled this year, including ideas that will continue to change how we view and use our wireless devices.




All I wanted for Christmas was two things. The first was an application I could use on my desktop computer to configure my new phone, load the address book the way I want it to be, set my ringtones, load pictures and otherwise be able to set all of the menus on the phone. The second was to see the first set of really smart wireless applications for the Internet, not browser-driven but driven from within the applications. You know, what we have been talking about since 2000 when Barney Dewey, one of our business partners, first wrote about active content in the pages of our Outlook on Mobile Computing.


Santa did not deliver either of these things to me, but perhaps we will see at least the beginnings of one or both this year. A couple of the folks at Google seem to get it. One comment we heard from a Google representative during a recent panel was that he was frustrated that he could not simply select an address in his address book and have Google Earth automatically find it for him. This would, of course, apply to locations and directions as well. But the applications can be even smarter than that―a lot smarter.




I could go on about many other subjects, but I will have plenty of opportunities in the coming year’s commentaries and blog entries. This small glimpse into what I expect in 2008 is indicative of why I believe 2008 will be a pivotal year for wireless! Stay tuned.


Andrew M. Seybold

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