The 700-MHz Auction: What the Heck Does it Mean to YOU?

Verizon Wireless has taken the largest chunk of the 700-MHz spectrum. Others have claimed shares too. But what does it mean to you—the average cell phone user? Will your service miraculously be improved? No more dropped calls? Will you get amazing new cell phones that can illuminate the Eastern Seaboard? The answers: No, no, and maybe.

We asked John Jackson, a wireless analyst at the Yankee Group, how it would shake out for the people.

What does the claiming of the 700-MHz spectrum do for the cell phone users of America?
It’s perfectly unclear actually, and the short answer is really nothing. We have been having discussions about it internally and trying to figure out that answer. It’s kind of the same thing, but just more of it.

How does it affect Verizon customers, if at all?
I think for Verizon the big news will be in the open-access provision. Verizon had a conference earlier this week about the open access of its network. If you think about the manifestation that people can now build a device that will hang on Verizon’s network, the impact is significant. Let’s say you want to build a smart phone and have lots of cool applications running on it, or even if you want to put that G or Z phone on it you now can. You can see a time where whiz-bang or clever phones that have all kinds of cool applications on them cost $500. So I guess for Verizon consumers you are going to see innovation, but the open question is if you will choose to afford it.

What about change in the network quality, in calls, and in data quality?
Yes, they will see improvement, but not soon. There is a good bet that Verizon will deploy its 4G network, its LTE, in this spectrum. It will take a few years and a billion bucks to build it out. So people can expect to wait to see the good news of the 700-MHz auction. In the meantime, the effect is to catalyze innovation on existing networks. Short answer: the world in two years will look the same; there will be more cool stuff but probably only in the province of the technofile.
Either way, it seems Verizon is already helping the average man. See what they did for Charles Whiting.