Here comes China to the rescue in the midst of a global financial crisis. Last week Li Yizhong, minister for industry and information technology, finally announced after a six-year delay that the government would finally award 3G licenses in the beginning of 2009. The move is expected to generate $29 billion in investments from China's operators. Yizhong said the licensing decision was a "very significant" response to the global financial crisis.
The move couldn't come at a better time. Nortel is contemplating bankruptcy and Lucent, which has recorded seven straight quarters of losses, is laying off workers and re-aligning its businesses and investments. In general, all vendors are suffering from a slow-down in network spending as technology upgrade contracts have been hard to come by. 3G is beginning to mature in many markets. What has been missing is a massive buildout of new technology.
Of course, the big question is: Will the Chinese government make good on its announcement? We've heard similar things before. Vendors certainly have to be crossing their fingers.
While things are looking up for the world's infrastructure players, M2Z--the company that has been pushing the FCC for about two years to grant nationwide spectrum for a free wireless broadband service--was disappointed to learn that the commission canceled its Dec. 18 vote on pursuing the AWS-3 auction as it faced pressure from lawmakers and the Bush administration. Sen. Jay Rockefeller, D-West Va., and Rep. Henry Waxman, D.-Calif., who will chair the committees overseeing the FCC in the next Congress, sent a letter asking FCC Chairman Kevin Martin to hold off on the vote. The two asked Martin and the FCC to instead focus more on the complex issues associated with the digital TV transition that will take place Feb. 19. M2Z is crying foul, claiming the move violates the Communications Act.
It looks like M2Z may have to start all over courting the new commission that will come in under President-elect Barack Obama. M2Z certainly had a strong ally in Martin, who was keen on bridging the digital divide with the plan. Despite the fact that Obama has made a point of saying that broadband for everyone will be priority during his administration, it's still not clear that his administration or the new FCC will believe that a wireless broadband network required to offer free service is the way to do it.--Lynnette