Web Giants Team Up for Wireless Spectrum Auctions

Google, Yahoo, and eBay may not see eye to eye with each other, but when it comes to broadband access, they all agree that the future is too much in control of the incumbents who can squeeze them dry.

It is one of the reasons the three heavyweights, plus Intel, have teamed up with satellite carriers EchoStar and DirecTV to lobby the FCC about how the 700 MHz wireless spectrum auction is held, according to a research note published by UBS Research this morning.

The 700 MHz slice of the spectrum is apparently pretty good to offer broadband, since it can penetrate walls and other obstacles. The spectrum is currently in the hands of analog TV operators and US government is looking to get it back. All Analog TV stations have up to February 19, 2009 to go digital or go dark. Multichannel News speculates that this slice of spectrum could bring in about $10 billion but when they are done with the whole 60 MHz slice, the total could tip $30 billion. Of course, the broadcasters are crying foul and saying – what about those analog TV owners … yada yada yada!

“This coalition does not mean these companies will actually bid, but that they want a say on how the auction will run,” says Ben Schachter, Internet analyst with UBS Research. Google, ahead of last year’s AWS auctions was rumored to be bidding for the spectrum but in the end it never did.

These are content companies with no control of the pipe into the consumer homes – scary prospect if the network neutrality concerns do come to pass. Satellite providers desperately need IP pipes if they need to stay competitive with the interactive services such as Video on Demand from cable television and IPTV offerings being planned by the telecom operators.

“’Network-less’ content aggregators (Yahoo, Google) and online transaction companies (EBay) have been concerned about potential last mile toll for the customer to access their services,” writes UBS Global media Strategist Matt Coppet in a note to the UBS clients this morning. “for the coalition providers, the only way to protect their unencumbered access to the consumer could be to build a third data own network.”