The F.C.C. is preparing to auction off the use of airwaves within the 700mhz band, currently used for UHF, to hungry telcos and other media operators for the use of next generation digital signals. Google has recommended to the F.C.C. that companies who win a portion of the airwaves be allowed to auction off any unused portions to other providers or users using a real-time auction system similar to Adwords.
Reed E. Hundt, a former F.C.C. commissioner proposes “that one quarter of the capacity of the network that uses this spectrum must be sold not in a long-term service contract but instead in ongoing open auctions to any and all comers.” (source NY Times). Both Google’s and Mr. Hundt’s suggestions would allow independents and other low-capital enterprises a chance to get airtime without the lofty up-front costs of the current leasing process; at the moment winners of an auction have to pay their long-term lease up front which is often out of the reach of most businesses.
So what does Google get out of this? Fortunately it seems Google’s interests happen to mate nicely with those of us who appreciate any initiative providing more competition and lower prices. Now this is not my space of expertise but it seems to me that opening a pay-per-minute (or whatever model is chosen) window in the airwaves will allow others to innovate (more tasty Google acquisitions) and provide Google with a cheaper medium to sell advertising; fewer payments to middlemen (current radio stations, cable providers, and the like) . A paragraph in this article by the New York Times also tweaked my interest because it explained how the proposed bidding system could also increase the range of the Internet and spawn technological innovation in cell phones and computers:
“… in the future such a system might require that advanced computing technology be built into wireless handsets and computers to automate the auction bidding process and permit it to take place without users noticing. The Google proposal states that such a system would reduce retail prices for wireless spectrum and extend Internet access into rural areas not now served by existing providers.”
Go Google go! Opening up the airwaves to a real-time bidding process may give some renewed life to the airwaves and I am all for another thriving promotional medium. Fortunately, or unfortunately, depending on your views, when auctioned airwaves become available Google’s business model will likely thrive because few can compete with their constant innovation and massive cash reserves.
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