Wed, Sep 12, 2007 - Page 11 News List

FCC wireless spectrum up for grabs, Apple may bite

FRED NETWORK A number of bidders may appear -- BlackBerry, DirecTV or even unknown bidders `named Fred.' However, Apple is the one to watch, analysts say


Apple Inc may bid for the rights to a wireless spectrum auctioned by the Federal Communications Commission (FCC), a risky but intriguing move that would help carry the consumer electronics company into the telecommunications realm.

Citing unnamed sources, a BusinessWeek article on Monday said Apple CEO Steve Jobs has "studied the implications" of bidding on the spectrum, which analog TV broadcasters will return to the government in 2009 as they switch to digital television.

Analysts have speculated wildly on other possible bidders, including Silicon Valley neighbors Google Inc and eBay Inc.

An Apple spokeswoman declined to comment.

The auction -- which the FCC says will take place in January and could raise as much as US$15 billion -- will determine rights to a 700-megahertz wireless network with faster Internet access than cellular or Wi-Fi networks offer.

The FCC's "open access" provision requires the network operators that win the auction to allow customers to use whatever phone and software they want on about one-third of the spectrum.

That makes the spectrum particularly appealing to companies that do not already operate their own networks and therefore would not lose recurring revenue from monthly service agreements with existing customers.

If Apple bid and won, it could offer service on its iPhone, which currently runs exclusively on AT&T's network and requires a two-year contract for US$60 per month. Apple could change the terms or even give free access to a network.

But experts described an Apple bid as unlikely. Apple -- which debuted the iPhone in June to mixed reviews -- would be taking on too much, too soon, they said.

"The wireless carriers today are doing great, but they've been in business 25 years, merged and consolidated, and understand all the complications," telecom industry analyst Jeff Kagan said. "Apple could come out with an announcement that blows me away, but I'd be surprised."

Kevin Burden, a senior manager at telecommunications research firm Telephia Inc, said dozens of companies are eyeing the spectrum. BlackBerry maker Research In Motion Ltd, DirecTV Group Inc and other technology companies may submit the minimum US$4.6 billion bid.

"Some guy named Fred could come along and create Fred's Network for all we know," Burden said. "It's loosening up the stranglehold that the carriers have had on our dollars -- it's fun to watch. But anything could happen."

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