Yale SOM - Spectrum Auction - 07-043

 

Definitions and Quick Facts


1G, 2G, 3G 

1G      First Generation cellular phone systems: analog cell phones.

2G    Second Generation cellular - digital cellular including TDMA, CDMA, and GSM systems. Most 2G digital phones are voice only phones, but some offer limited data capability. More on  pros and cons of various systems.

3G     Third Generation Wireless technology, supporting very high-speed data transmission rates. making possible applications like real-time multimedia. An FCC web page has more detail.

ARPU 

Average Revenue per User, a calculation used particularly in mobile telephone service to encompass all revenues billed to the customer each month, including subscription charges and fees and revenues generated from other service

Auctions and Beauty Contests

>National regulators have adopted a variety of mechanisms to allocate the electromagnetic spectrum. In some cases, segments of the spectrum are made available to the highest bidder under defined constraints, using various auction mechanisms.

In other cases regulators allocate spectrum use based on adopted policy guidelines or other criteria. With the rise in auction allocation, policy allocations are often described as "beauty contests."  

The Electromagnetic Spectrum  

The range of electromagnetic radio frequencies used in the transmission of sound, data and television.   

 700 MHz spectrum

The 700 MHz spectrum from the FCC's July 31, 2007 Ruling establishing the rules for the 700 MHz spectrum auction scheduled for January, 2008. (Note the spectrum at issue actually runs from 698 to 806 MHz (megahertz)). This section of the electromagnetic spectrum is currently used by analog TV, which will cease broadcasting when the switch to digital TV occurs February 17, 2009. Bands shaded in yellow have been distributed in prior FCC auctions. 

A simplified graphic representing uses of the complete electromagnetic spectrum. 

The Department of Commerce graphic of the complete allocation of the radio spectrum--too detailed to print.

Locking and Blocking

In summary, a wireless provider not allowing open access would lock the device and block the content.  

A wireless provider software lock prevents consumers from using a handset not authorized by the service provider. The device is locked, preventing a consumer from using a handset acquired for one network provider with a different provider, even if the networks are technically compatible. So, for example, the i-Phone can only be used on AT&T's network. By contrast, in Europe all providers use the same technology, and handsets can be moved to a new network by exchanging a removable chip.

A wireless provider can block a program, preventing consumers from using a feature or handset that is not authorized by the service provider.  

Open Access Rules

Requirements set by the FCC for owners of radio spectrum defining the extent to which the new owners must allow others to use the system, e.g., not allowing restrictions on devices, or requiring owners to provide access to sections of the spectrum not in use, in effect offering a wholesale service. 

Open Standards versus Proprietary Standards

Open standards are specifications, usually for software, developed by a group and available to all who wish to join, in contrast to "proprietary standards," which are owned by an individual or company and protected by copyright or patent. For example, in cellphone internet software, i-mode is a proprietary standard owned by Japan's NTT DoCoMo. WAP is an open standard coordinated by the WAP Forum. Cellular systems operating under WAP, an open standard have a choice of vendors, while under i-mode NTT DoCoMo or its licensee controls the entire value chain.

Spectrum Cap

A regulatory restriction limiting the maximum share of the electromagnetic spectrum that any one firm could purchase. The goal was to create a competitive market that would benefit consumers. Early FCC auctions of wireless spectrum contained spectrum caps designed to favor a market with five to seven competitors. Since 2002, the FCC has not set caps on bidders for wireless spectrum in its auctions. 

WAP and i-mode

WAP and i-mode are mobile data services that give wireless devices access to internet content. They simplify web content so that it can be quickly downloaded to a cellphone. WAP and i-mode sites are either written in software that is simplified or dynamically converted to meet the restrictions of a wireless phone and then accessed by a WAP or i-mode browser.

The Wireless Application Protocol (WAP) is an open, global specification.  Launched in December 1999, it is the de-facto world standard for wireless information and telephony services on digital mobile phones and other wireless terminals. Different vendors provide different implementations of the specification, creating a fragmented value chain. WAP specifications and updates are coordinated by the WAP Forum, recently consolidated as a working group within the OMA (Open Mobile Alliance). For more about the OMA click here. For technical information about the various OMA working groups, For an overview of the OMA working groups click here. The group focused on standards for moving web applications to mobile is here.

i-mode is a proprietary service developed initially in 1999 by Japan's NTT DoCoMo. DoCoMo has licensed it in other countries as an alternative to WAP, with varying levels of success. i-mode cannot be made readily compatible with other service carriers' networks. It runs on a "packet switched network," which allows a user to always be connected. i-mode allows other data to flow when the user is not sending or receiving data, a much more efficient use of the spectrum than WAP. NTT DoCoMo or its licensee controls the entire value chain, from handset specifications and interface through branding, content and network. For more information on i-mode, click here.

 

Additional Resources

A glossary of technical terms from Mobiledia.

FCC Glossary of Telecommunications Terms: basic terms in telecom 

Quick facts and glossary from CTIA, "The Wireless Association."