Apple might enter the competition for the wireless spectrum bid to be held on January 16 next year, according to sources cited by BusinessWeek.
Not a week has passed since Steve Jobs’ jaw-dropping announcement about the new line of iPods and the $200 price cut for the iPhone, that the Cupertino, CA-based giant is ready to surprise us again, with an unexpected entrance in the competition for the so-called “white space”.
The “white space” is comprised of unused frequencies in the radio waves portion of the electromagnetic spectrum. Microsoft, along with industry behemoths like Intel, Google, Samsung, Philips, Earthlink, HP and Dell (grouped in the White Spaces Coalition), has been pushing the FCC to accept “transferring” the vacant analog frequencies to the Internet since late 2006, when the Congress decided to abandon the analog television in the US.
According to the timetable proposed by the Congress, February 2009 should be the month when the last analog TV signals (which operate between the 54MHz and 698MHz television frequencies) will be broadcast. This is supposed to give enough time to the FCC to test emerging technologies and to spectrum bidders to weigh their offers and investments. The stakes are high, considering that a 2005 estimate indicated a value of up to $20 billion for the entire US analog TV spectrum.
Recently, even the Mountain View behemoth has manifested its intention to join the party, although Google tried to impose the FCC to adopt some of its conditions: open applications (no restrictions should be imposed to downloading and using any software applications, content, or services), open devices (consumers should be able to freely switch with their handheld communications device between any wireless network available), open services (third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms) and open networks (third parties (resellers) should be able to acquire wireless services from a 700 MHz licensee on a wholesale basis, based on reasonably nondiscriminatory commercial terms).
According to BusinessWeek, which cites two sources familiar with the deal, Apple plans to enter the competition too. Considering the steaks, it wouldn’t be a surprising move.
The advantages of the analog-Internet are also not to be neglected. First of all, it’s the speed: analog signals used for Internet access could allow for "single-user applications" to reach speeds of 50 to 100 Mbps. Moreover, the use of white space for broadband connectivity could also prove less expensive for consumers and more accessible than current phone and fiber-optic lines- forcing other high-speed Web service providers to lower their prices. Rural and isolated areas could profit from the “relocation” of airwaves, which can easily pass through buildings and work glitch-free, even in lousy weather. FCC’s “white space”, also dubbed "beachfront property", is the last remaining portion of the wireless spectrum available for sale.
According to BusinessWeek, it’s not a problem for Apple to come up with the money for the minimum bid of $4.6 billion, since Apple’s pockets are filled with more than $14 billion in cash. The Cupertino hardware and software behemoth has recently announced that it has sold more than 1 million iPhones, in just 74 days.
However, there are other issues that Apple needs to confront with and Google is one of them. Besides being the company that literally owns almost half of the Internet, Google is also present in Apple’s board of directors, through Eric Schmidt. Entering the competition with a company which not only possesses more money than you but is also an important partner could prove tricky.
Apple could step on a shaky turf if it wins the bid, Peter Burrows from BusinessWeek writes: “the risk for Apple is in entering the generally low-margin, hardscrabble world of running a massive-scale network. Rather than focus all of Apple's entrepreneurial instincts on creating the next innovative gizmo, the company would be on the hook for the massive operational headaches that go with provisioning traffic, activating new subscribers, and fielding their angry calls when service glitches occur.”
