Pundits are excited about the opportunity for players other than the Verizon's and AT&T's to change the landscape of the mobile industry. But will the 700 MHz band really produce a new out-of-the box wireless broadband provider?
Google, which is going it alone in the auction and probably has the deepest pockets out of any potential non-traditional bidder, doesn't appear to be any too gung-ho on the prospect of outbidding telecom incumbents. Back in October, Google co-founder Larry Page said: "I think we have many, many different options available to us as a company, in terms of spectrum and connectivity for people in wireless and so forth, so I don't think we feel like there's any desperate need for us to have to bid to win or anything like that. And again, the money is not burning a hole in our pockets."
That doesn't sound like an aggressive bidding strategy to me. Simply put, incumbents such as Verizon have the wherewithal to spend billions on licenses and billions more to build out network infrastructure. That's their core business. And with the 700 MHz band the last of the so-called beach-front property, operators are prepared to drive the price up to a hefty level, especially given the fact that new 4G networks need a nice chunk of extra spectrum, about 20 megahertz, to deliver the broadband data speeds that are advertised.
While a host of alternative operators is a nice dream for the 700 MHz band, we are ultimately going to see the same faces walk away with some mighty expensive licenses.