Going once, going twice, sold to the company with the highest bid. On January 16, 2008, the Federal Communications Commission (FCC) will sell the rights to the spectrum that American analog T.V. broadcasters have used for years. This lucrative spectrum will revert back to the government in 2009. Minimum bids start at $4.6 billion. According to Business Week, Apple may jump into the wireless provider pool.
The FCC considers the analog T.V. spectrum to be beachfront property in the airways over American heads. These signals, broadcast at the 700 MHz spectrum, can provide faster Internet access than today’s cellular or Wi-Fi networks. 700 MHz signals can easily pass through buildings and bad weather providing better connectivity.
Apple will be up against bidders such as Google, DirecTV and eBay. A portion of the spectrum needed to create a national network is estimated to sell for around $9 billion. Apple has nearly $14 billion in cash reserves, so money to win a bid isn’t a problem. But Apple has to decide if it wants to put up the capital needed to create a national network, with all the problems that could cause. Traditionally, Apple is a company that focuses on creating innovative computing devices. Running a mobile network would be a major turn in corporate strategy.
If Apple does buy its own spectrum, it could provide all the services for the iPhone and its other wireless devices. One drawback to the iPhone is the two year contract a subscriber has to make with AT&T. If Apple built its own network, these subscription prices could be lowered. Apple could get a slice of money from all the applications that future mobile phones are expected to generate in the near future.
Apple hasn’t announced it is going to join the auction. It has only studied the issue. It is easy to see how creating a network would be a good fit for Apple. The company has been good in the past at creating innovative computing, so an innovative network is a tempting dream. But many stockholders may not agree and want some of that $14 billion in cash paid out as dividends.