[opendtv] News: Silicon Valley Moneymen Make a Play for Airwaves
- From: Craig Birkmaier <craig@xxxxxxxxx>
- To: OpenDTV Mail List <opendtv@xxxxxxxxxxxxx>
- Date: Mon, 9 Apr 2007 11:18:42 -0400
http://www.nytimes.com/2007/04/09/technology/09spectrum.html?_r=1&th&emc=th&oref=slogin
Silicon Valley Moneymen Make a Play for Airwaves
By JOHN MARKOFF
Published: April 9, 2007
SAN FRANCISCO, April 8 - Some of Silicon Valley's most powerful
venture capitalists and technology investors have joined an
investment group that is preparing to challenge cellphone carriers,
cable and satellite companies for valuable radio spectrum that will
be freed when television broadcasters convert to digital signals.
The government mandated the transition to digital, to be completed by
Feb. 19, 2009, so it could reclaim a broad swath of radio spectrum
and reallocate the frequencies to public safety organizations and
commercial broadband networks.
The venture capitalists L. John Doerr and James L. Barksdale have
joined an investment group that is promoting a plan that would open a
portion of the radio spectrum for both uses, through technologies
flexible enough to support both next-generation wireless Internet
devices and public safety emergency communications.
The plan is being put forth by Frontline Wireless, formed earlier
this year by Reed E. Hundt, the former Federal Communications
Commission chairman. Frontline Wireless is one of several potential
bidders for spectrum in the 700 MHz band, used until now by UHF
television, that is being opened up by the move to digital.
Mr. Hundt said that Frontline had begun building an investor group,
which would ultimately include large banking partners, to participate
in the auction. Significantly, the company's first public investor
was K. Ram Shriram, an early Google investor and board member and
managing partner of Sherpalo Ventures.
Cellular carriers and their rivals covet the spectrum because it has
significant capacity and greater range and can easily penetrate
buildings and other structures.
But Frontline's backers argue that their plan is unique because it
would be more accessible than today's commercial wireless networks,
which are tightly controlled by their licensed operators. The
auction, which will be governed by rules that the F.C.C. is expected
to issue this month, could generate up to $30 billion in revenue for
the federal government, by some estimates.
The F.C.C. has a range of options to consider, including breaking the
spectrum up for regional purchases or creating a single nationwide
license.
The rule-making process is being watched closely by all sides because
those regulations will determine whether several ideas for exploiting
the spectrum with advanced technologies will be accepted.
The Frontline proposal, for example, calls for flexible access by
public safety agencies to a wide section of spectrum in the event of
emergencies. That makes it significant that Vanu Bose, an
entrepreneur and technologist, is investing in the consortium along
with Mr. Barksdale and Mr. Doerr, who were both involved in the
creation of Netscape Communications, the pioneering Web browser
company.
Mr. Bose, son of the audio designer Amar G. Bose, is pursuing an
advanced radio technology known as software-defined radio, which
controls frequencies through software rather than hardware.
In principle, this would permit much more efficient use of radio
spectrum, allowing the sharing of frequencies through a variety of
techniques .
Frontline proposes to create a large spectrum block that could be
sold wholesale to companies that are building services for new
portable Internet devices for receiving and transmitting voice, video
and data. In the event of public safety emergencies, however, the
spectrum could be reclaimed for use by the police, firefighters or
medical emergency workers.
Mr. Doerr, who is a partner at Kleiner Perkins Caufield & Byers, a
leading Silicon Valley venture capital firm, has previously invested
in M2Z Networks, another technology-based proposal to build a
wireless broadband network that is being promoted by Milo Medin, a
well-known Silicon Valley computer network designer, a potential
competitor to Frontline with a different business strategy.
Along with Mr. Barksdale, the two men were partners in @Home, the
early and ultimately financially unsuccessful effort to build a
nationwide Internet-based network in alliance with cable companies.
"I think we're starved for spectrum for digital applications in this
country," said Mr. Doerr. "The idea that we can have one or more
great new digital networks is very exciting."
He noted that the United States was ranked 12th in the world last
year in broadband penetration by the Organization for Economic
Cooperation and Development.
Mr. Hundt said that Mr. Barksdale was an important addition for the
Frontline group because he had been working on public safety issues
and his background was in the cellular telephone industry. After
Hurricane Katrina, he was appointed by Gov. Haley Barbour of
Mississippi to lead the governor's commission on the recovery,
rebuilding and renewal of the state.
Having Mr. Doerr and Mr. Barksdale as a part of his investment group
is a bit like "a reunion of Shaq and Kobe," said Mr. Hundt, referring
to the basketball stars Shaquille O'Neal and Kobe Bryant, who once
played together for the Los Angeles Lakers.
Last week, several trade publications reported that Kevin J. Martin,
the F.C.C. chairman, was preparing to include the Frontline proposal,
or something similar, in setting the guidelines for the auction. If
that framework is announced this month, the auction could take place
as early as this fall.
In anticipation of the F.C.C. ruling, a number of companies and
industry associations have filed comments with the agency. Last week,
Steve Largent, president of CTIA, a trade group for the wireless
industry, questioned the legality of the Frontline proposal in a
letter to Mr. Martin, while Google filed a letter supporting the
Frontline proposal and urging the F.C.C. to avoid further delays in
the auction process.
This year the F.C.C. rejected a competing plan put forward by Morgan
O'Brien, founder of Nextel Communications. Called Cyren Call, it
would have set a portion of the spectrum aside for a nonprofit
organization, with priority for public service organizations in
emergencies.
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