The Forthcoming U.S. Wireless Spectrum Auction and You

by Matt Klassen on October 20, 2014

Wireless spectrum: It is to the wireless industry what oil is to the automotive industry, a finite resource that serves as the lifeblood of the modern conveniences we hold most dear. While I’ll admit that writing about the radio waves designated to transmit data over the air from your smartphone to the Internet isn’t the most engaging topic in the world, as the U.S. government stands poised to hold its first wireless spectrum auction in six years, it’s something you might want to pay attention to.

If you’ve ever followed the ins and outs of the wireless industry over the last decade you’ll no doubt have come across the ongoing discussion regarding spectrum, a resource wireless carriers insatiably crave for the simple fact that employing more bandwidth, that is, controlling more radio frequencies dedicated to data transmission, means better networks, better networks means faster service, and of course, faster service means faster delivery of your latest streaming video binge.

The forthcoming auction, announced for November, is therefore important for several reasons: First, it’s a huge revenue generator for the American government, as billions of dollars will be in play as the country’s wireless carriers bid on the newly available spectrum. Second, the outcome has the potential to shift the balance of power in the wireless market, as lesser lights like T-Mobile and Sprint have the opportunity to make up some ground on their larger rivals Verizon and AT&T. Finally, it matters to you specifically because as I mentioned, more spectrum means better, stronger wireless service resulting in better performance not only for our smartphones and tablets, but for everything in the growing Internet of Things.

The Federal Communications Commission is scheduled to hold the auction on November 13th to sell the licences for spectrum designated as Advanced Wireless Service (AWS-3), high-frequency bandwidth that, despite its difficulty transmitting through walls, is sought after for its ability to transmit large amounts of data.

The desire to acquire this newly available spectrum speaks to the Sisyphean dilemma of today’s wireless carriers, the endless task of acquiring spectrum to meet the insatiable demands of a data consuming public, only to realize that once you’ve employed your newest spectrum consumer demands have yet again increased, meaning you need to do it all over again.

But the benefit of this auction is that it could finally help establish some competitive balance in the market, allowing for smaller companies like T-Mobile to actually acquire some of the “beachfront property,” as it were, of wireless spectrum, thus allowing those smaller players to deliver a network comparable to Verizon and AT&T, choice that will in turn result in better pricing and service as consumers are offered equitable choices.

In the end, while its certainly not the most interesting news the forthcoming spectrum auction is actually far more important than whatever Apple has just released or the latest and greatest device in the growing Internet of Things simply for the fact that spectrum is needed to make all that cool stuff work, and knowing that carriers will finally be acquiring the spectrum needed to handle the ever-increasing data traffic (particularly from streaming video) means we can look forward to better wireless service…for a few years at least.

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Written by: Matt Klassen. Follow by: RSS, Twitter, Facebook, or YouTube.

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