Silicon Valley could benefit from spectrum auction

June 28, 2010 7:51:27 PM PDT
Silicon Valley, once known for its computers and processor chips, has emerged as a leader in mobile technology, and valley tech companies are expected to benefit greatly from a new plan by the President Barack Obama's administration to increase the amount of wireless spectrum that mobile devices require. The president signed an executive order Monday to double the space available on the airwaves for wireless high speed Internet traffic.

Subject to Congressional approval, the government plans to auction off 500 megahertz of spectrum that is currently not used or little used by federal agencies and private companies. The money generated would help underwrite new wireless public safety networks and pay down the federal deficit.

"This is the prime spectrum that everyone wants their hands on, and the question is how do we use this very important spectrum to better our society and to reduce the federal budget?" Marvin Ammori, an expert in media policy and a visiting scholar at Stanford said.

The spectrum is expected to sell for billions of dollars because existing frequencies can't keep pace with the demand for more bandwidth.

For technology companies, the plan could spur job creation, new mobile devices and services and investments. Without the additional spectrum, mobile devices would be hampered as more consumers use them to send and receive video, music and other forms of entertainment, according to Tim Bajarin, president of Creative Strategies in Campbell.

"if we don't get more spectrum, we will all be much more limited in what we can do with our mobile devices," Bajarin said. "We're capping data today even at... I think AT&T and Verizon cap it somewhere between two and three gigs of what used to be an all-you-can-eat data plan."

Ammori expects years of fighting to free up the airwaves. The spectrum is currently used by TV stations and government agencies.

"You'll see a real knock-down, drag 'em out fight to keep hold of the spectrum, which is worth billions of dollars to broadcasters and could be worth billions to AT&T, Verizon, or to Google and others," Ammori said.

New devices, such as the Apple iPad, rely on wireless networks to deliver TV programs, movies and music to users. Google is doing the same with its new Android-based mobile devices.

Opening up more spectrum is expected to stimulate the economy, creating new startups and jobs, as entrepreneurs invent new ways to use the airwaves. Silicon Valley is already a major leader in mobile technology.

"You might want to see some spectrum be unlicensed as was the current plan and then you could see new tech companies using that to create new devices, new applications in ways that we can't even predict in the license model," Ammori said.

The battle over who will give up spectrum could take years. That means new devices operating on the new airwaves may be 10 years off.


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