Apple may bid in airwaves auction
EmptySAN FRANCISCO -- Apple Inc. may bid for the rights to a wireless spectrum auctioned by the FCC, a risky but intriguing move that would help carry the consumer electronics company into the telecommunications realm.
Citing unnamed sources, a BusinessWeek article on Monday said Apple CEO Steve Jobs has "studied the implications" of bidding on the spectrum, which analog TV broadcasters will return to the government in 2009 as they switch to digital television. Analysts have speculated wildly on other possible bidders, including Silicon Valley neighbors Google Inc. and eBay Inc.
An Apple spokeswoman declined to comment.
The auction -- which the FCC says will take place in January and could raise as much as $15 billion -- will determine rights to a 700-megahertz wireless network with faster Internet access than cellular or Wi-Fi networks offer.
The FCC's "open access" provision requires the network operators that win the auction to allow customers to use whatever phone and software they want on about one-third of the spectrum.
That makes the spectrum particularly appealing to companies that don't already operate their own networks and therefore wouldn't lose recurring revenue from monthly service agreements with existing customers.
If Apple bid and won, it could offer service on its iPhone, which currently runs exclusively on AT&T's network and requires a two-year contract for $60 per month. Apple could change the terms or even give free access to a network.
But experts described an Apple bid as unlikely. Apple -- which debuted the iPhone in June -- would be taking on too much, too soon, they said.
"The wireless carriers today are doing great -- but they've been in business 25 years, merged and consolidated, and understand all the complications," telecom industry analyst Jeff Kagan told The Associated Press. "Apple could come out with an announcement that blows me away -- but I'd be surprised."
Kevin Burden, a senior manager at telecommunications research firm Telephia Inc., said dozens of companies are eyeing the spectrum. BlackBerry maker Research In Motion Ltd., DirecTV Group Inc. and other technology companies may submit the minimum $4.6 billion bid.
"Some guy named Fred could come along and create Fred's Network for all we know," Burden said. "It's loosening up the stranglehold that the carriers have had on our dollars -- it's fun to watch. But anything could happen."