FCC’s 700 MHz Plan: less than what meets the eye

[qi:004] Some folks have taken umbrage to my previous post about making 700 MHz spectrum unlicensed, and they are making good arguments. The focus is obviously on the 22 MHz (C-block) of spectrum, which comes with open access requirements. My discontent over the 700 MHz spectrum auctions is because there are so many details missing and that makes me nervous.
The lack of mandated wholesale access on this network makes it a non-starter from competitive perspective. Susan Crawford does a great job of explaining why it is the most important issue pertaining to the this new wireless spectrum.
I wholeheartedly agree with her when she says that if FCC was trying to bring more competition to the high speed internet business, it failed. Even if you totally disagree with me, here are some issues you might want to ponder over.
1. Theoretically, there is a put option on this spectrum. FCC says the bidding is going to be anonymous, and if a bid of $4.6 billion in not reached, then the auction is going to be restarted, and won’t have any open access requirements.
2. Access Not Gadgets. Today, wireless carriers subsidize the devices and use the discounts to control the application access. Theoretically open (unlocked) devices are available today and you can use them on one of the two GSM networks, but the percentage of unlocked devices isn’t that high. Susan is right when she says

This approach to the public interest is that it puts gadgets ahead of access. Nothing wrong with gadgets – they’re very empowering. Gadgets are a means, though, and not an end in themselves.

3. Carriers can layer their locked (or closed) devices with incentives such as more minutes and new handsets every year — and basically render open access pretty useless.
Update: Google is still interested in the spectrum, but is playing its cards close to the chest.

“There will definitely be a new entrant in the auction, I don’t know if they’ll succeed. There’s an opportunity for an incumbent to dominate the bidding and keep out a new entrant,” ( Chris Sacca, who is head of special initiatives) Sacca said.