So Maybe Verizon is Bidding Against Itself

After round 40 of the Federal Communications Commission's auction of 700 MHz airwaves, Verizon might be bidding against itself, in a sense. Observers say it is possible for Verizon to bid directly on each of the eight regional allocations that make up the national C block. And if any contestant has the highest bid in a region, it wins the spectrum even if some other entity has the highest overall bid for the entire C block.

In this scenario Verizon would simply have to ensure that its regional bids were high enough to top the amount any other player submitted for the entire national spectrum. Clever.

FCC Auction: Who's Bidding on C Block?

At the end of round 39 of the Federal Communications Commission's auction of the national C block of 700 MHz spectrum, it appears at least two entities continue to bid.

The top bid now is a bit over $4.83 billion, up from the prior high of $4.7 billion at the end of round 38. Some of us think Google has halted its bidding, and most of us think Verizon Communications intends to win the C block. So if all that is true, at least one other company continues to bid against Verizon. Curious.

It's hard to picture at&t bidding for C block spectrum, as observers have predicted it would focus on filling in holes in its 700 MHz spectrum by bidding on local chunks of the B block.

AOL to Cleave Access from Ads

So it looks as though AOL will be split, separating out the Internet access business from the emerging advertising business. The thinking is that it will be easier to do something with each of the assets that isn't so easy right now. Presumably a buyer such as Google might want to pick up AOL's portal for the ad business.

But what can be done with the access assets? Even though AOL lost 3.8 million subscribers in 2007, it still has something on the order of 9.3 million U.S. subscribers.

EarthLink has something of a similar problem. It has a declining customer base but still has 4.2 million access customers.

The issue is what sort of buyer might exist for the Internet access customers AOL and EarthLink now are serving. Most of them are dial-up customers and are likely prospects for broadband upgrades. But the customer base is scattered all over the U.S. market.

So any potential acquirer would want a ubiquitous broadband access footprint (cable modem, wireless or Digital Subscriber Line). Only the leading wireless providers have any real shot at national coverage. Verizon, at&t or Comcast would have immediate coverage issues. Smaller ISPs might want to buy, but can't raise the money.

Does anybody have a rational business plan for rolling up the EarthLink and AOL access bases? Not one we've heard so far, even assuming all the other assets are cleanly separated.

at&t to Add 80 Cities to 3G Network

at&t Wireless will extend its third-generation (3G) wireless broadband network to more than 80 additional cities in the United States this year. About 270 communities already have 3G service available.

Most major metro areas already are covered, but you'd be surprised at the number of suburban communities even around the major markets that only have the slower EDGE data network. That's one reason, aside from battery life, that the Apple iPhone initially was available only in an EDGE network version.

By the end of the year, nearly 350 leading U.S. markets will be served by the 3G network, including all of the top 100 U.S. cities. The 3G initiative requires the building of more than 1,500 additional cell sites.

The at&t 3G network now delivers typical downlink speeds ranging between 600 and 1,400 kilobits per second, as well as uplink speeds ranging from 500 and 800 kilobits per second, though the network is not yet completely equipped for the higher upstream capacity at all sites.

People often underestimate how long it takes for a national network to be created, even if it is a wireless network. Back in the regulated days of telecom, for example, a sizable telecom company would expect to upgrade or replace only about 10 percent of total plant in any single year.

So access plant changed slowest, though switch replacements could occur more quickly. And it isn't just "physical" networks that have to be built. A large carrier might operate 50 to 100 "logical" networks, as each separate service often required its own hardware, software, provisioning and billing systems.

Likewise, consider that Verizon Wireless has invested $300 million in 2007 to enhance its networks in Maryland, Washington, D.C., and Virginia alone, largely related to broadband upgrades, spending $6.5 billion investment nationwide.

"Reliable wireless networks are not built overnight," says Tami Erwin, Verizon Wireless regional president.

From an at&t Wireless perspective, it will take a year to light 80 communities, using 1,500 towers, to create a 3G network in those areas. And there will be more work next year.

Verizon, at&t Take Different Approaches to Bandwidth Caps

For an industry that in decades past has tended to move in lockstep, it is refreshing to see an ever-increasing divergence in strategies and marketing positions. Consider the matter of bandwidth caps and content filtering.

at&t has decided to filter non-authorized content on its broadband access networks. The move is an attempt to reduce the peer-to-peer bandwidth load on its networks.

Verizon, on the other hand, doesn't want to do so and says it will not. Many policy advocates will cheer that stance.

One might credit Verizon's decision to move to a fiber-to-home network for that laudable move. Simply, Verizon has a lot more headroom than at&t will to support today's heavy users, and ultimately, heavier use by nearly all users as more video moves to Internet delivery.

Beyond the policy stance differences, and the customer goodwill Verizon will garner, the notable difference stems from fundamental decisions each carrier has made. Verizon made a risky bet in the face of nearly-universal investor opposition. at&t took a less-risky path that was rewarded by investors.

But each of those decisions now has repercussions in other areas where technology now conditions the marketing decisions each company can make. I've said it before and will say it again: Verizon did the right thing sticking to its FiOS program, in the face of intense financial community pressure.

In the years to come, that technology and financial decision is going to give Verizon many options other contestants may not have.

AMPS Network Shutdown May Affect Security Systems

On Feb. 18 at&t and Verizon will be shutting down their analog AMPS mobile networks. Not many mobile voice users still are on any of those networks, but some home security systems could be. By some estimates, as many as one million homes use wireless AMPS networks as the communication link.

LaserShield Systems says its LaserShield Instant Security System will solve the problem, using either the GSM network, a high-speed Internet access connection or a standard analog phone line if that is available.

A cellular adapter plugs into the rear of the master LaserShield Unit if a GSM network is the communications link, while a separate adapter is plugged into a broadband router if that is the communications link.

The LaserShield $199.95 security system includes a master alarm unit, a wireless motion detector and two keychain remotes. The wireless adapter costs $229.99. The broadband adapter costs $129.99.

The monitoring service costs $19.95 a month for dial-up and $29.95 a month for cellphone or digital phone service with no long-term contracts.

One wonders how many home security providers would not already have notified their customers of the impending change, though, giving customers time to make other arrangements that preserve the business relationship.

Japanese Study: Mobile Phones Don't Cause Cancer

Using a mobile phone does not increase your risk of brain cancer, according to a new Japanese study that is the first to consider the effects of radiation on different parts of the brain, Reuters news service reports.

That is good news for many of us who rely on them quite a lot.

Scientists at Tokyo Women's Medical University compared phone use in 322 brain cancer patients with 683 healthy people and found that regularly using a mobile did not significantly affect the likelihood of getting brain cancer.

"We found no association between mobile phone use and cancer, providing more evidence to suggest they don't cause brain cancer," says Naohito Yamaguchi, research team leader. The findings are published in the British Journal of Cancer.