For sale: 700 Megahertz Expressway
Wireless service providers gear up for bandwidth formally reserved for broadcasters

by Lorie Long
for Virginia Business
November 2006

Location, location, location. It's critical for real estate, and it's critical for wireless telecommunications. And now there's a hot new neighborhood coming on the market for wireless service providers. The address? It's the highly desirable 700 Megahertz Expressway.

Federal lawmakers are opening this prime real estate by freeing up a portion of bandwidth currently occupied by broadcast television. The Federal Communications Commission (FCC) is reselling broadcast licenses in that bandwidth to broadband wireless service providers, and the result could be significant cost savings for wireless and mobile telecommunications services.

In December 2005, Congress approved a plan that evicts broadcast television networks from the 700 megahertz (MHz) electro-magnetic spectrum in which they currently broadcast. By mid-2009, they shift to a different bandwidth, and to digital signaling. The FCC will auction licenses for the newly vacated 700 MHz portion of the spectrum to wireless telecommunications companies.

Some existing wireless service providers are forming partnerships to raise money to participate in the auctions. Providence, R.I.-based Aloha Partners, a venture company, has purchased the largest 700 MHz spectrum footprint in the country to date, which covers 60 percent of the United States, including a portion of the Richmond market.

Meanwhile, consumers tuned to over-the-airwaves broadcasts will have to exchange their rabbit-ear TV antennas for a digital converter box, at a cost of about $50 each. The trade-off: access to new, low cost, wireless telecommunications technologies. Industry analysts refer to this transition as the "700 Project."

The 700 MHz portion of the spectrum represents prime property for wireless communications service providers, because of the same characteristics that drew TV broadcasters in the first place. Namely, the bandwidth offers the ability to penetrate buildings and remain undisrupted by natural obstacles such as trees and hills. Indeed, the spectrum is so robust, it requires far less equipment such as towers, amplification hardware and internal building wiring to support transmission, says Jeff Reed, associate director of Virginia Tech's Mobile and Portable Radio Research Group.

In fact, in the 700 MHz range, emerging and existing wireless service providers can cut their costs by up to 90 percent, says Reed, by providing a vast array of telecommunications services, such as cellular telephone, wireless Internet access and wireless video teleconferencing. Customers can expect to enjoy faster deployment of new technologies at reduced rates, especially in currently underserved locations.