Google proposes real-time spectrum auction

The FCC last week received a proposal from Google to sell spectrum in the same kind of real-time auction now used to sell advertising. The unique proposal came in the form of public comments to the FCC concerning the rules for the pending sale of spectrum in the 700MHz band. The spectrum is mostly used by UHF television broadcasters.

The FCC is expected to establish rules for the auction later this year. Potential bidders, who are expected to use the spectrum to create advanced new wireless digital networks, include groups of telco, cable and satellite television operators.

Google said it had no plans to bid in the auction, which is set for Feb., 2009, and is part of the transition from analog to digital television broadcasting. However, Google has been an advocate of greater competition in the contest for the spectrum.

“The driving reason we’re doing this is that there are not enough broadband options for consumers,” Adam Kovacevich, a spokesman for Google’s policy office in Washington, told the “New York Times.”

“In general, it’s the belief of a lot of people in the company that spectrum is allocated in an inefficient manner.”

In order to discourage speculators, currently the FCC usually sets a time frame and network build-out requirements that companies must meet before they’re allowed to sell their rights to the spectrum to another company. Google suggests that the large companies that win spectrum rights from the government could allow other companies — large or small — to bid against each other in an auction in order to gain rights to use pieces of the spectrum for niche service delivery.

Third parties could bid for the right to use the spectrum for a year, six months or even two seconds.

Google suggested to the FCC that by permitting companies to resell the airwaves in a real-time auction on an as-needed basis would greatly improve spectrum use and simultaneously create a viable marketplace for innovative new digital services.

The “New York Times” reported that the Google proposal is for the wholesale auction of spectrum. In the future, however, such a system might require advanced computing technology built into wireless handsets and computers to automate the auction bidding process and permit it to take place without users noticing.

A significant remaining issue is whether the FCC will be able to meet a mandate in the digital television law calling for reallocation of the frequencies to public safety organizations while simultaneously making spectrum available for commercial applications.