Charlie Townsend On 700 MHz

Telecom Policy Report, July 18, 2005

To say that Charlie Townsend, president & CEO of Rhode Island-based Aloha Partners LP, is bullish on the digital future of 700 MHz technology is more than just an understatement. His company plans to be on the forefront of the digital revolution, and here's a bit of what believes:

On Broadband Competition: "Broadband has the potential to be one of this country's key economic engines for the next 10 years. Unfortunately, the United States is falling behind countries like China, Japan, Korea and even Iceland, with respect to broadband. This is due in considerable part to two factors: the lack of availability of broadband in rural regions of the U.S. and the lack of broadband competition in urban markets. 700 MHz frequencies have the potential to solve both of these problems because 700 MHz is the most cost-effective frequency available to provide wireless broadband. 700MHz can provide broadband services in rural areas at one-fourth to one-sixth the cost of the 2,400 MHz Wi- Fi and MMDS frequencies used by unlicensed owners and by companies like Sprint and Nextel. 700 MHz has the advantage of traveling further and being able to penetrate walls, dense foliage and other obstructions without the deterioration of signal experienced with either 1,900 MHz or 2,400 MHz wireless transmissions. Not only can 700 MHz be used to provide high-speed Internet access, but it can also offer low-cost voice over Internet Protocol (VoIP) service for voice customers.

On Auction Players: "Potential bidders probably will fall into two groups: companies planning to use 700 MHz for WiMAX broadband technology and companies planning to use 700 MHz for mobile TV. Aloha believes companies that may participate in the 700 MHz auction include major cablecos like Comcast, Cox and Time/Warner. These companies recognize that they need a wireless product to bundle with their telephone and video offerings. Major ISPs like AOL, AT&T and Covad recognize that they can no longer rely on the [ILECs] to deliver their broadband product, and that they will need 700MHz spectrum to bridge the last mile. Large satellite companies like EchoStar and DirecTV, and wireless operators like T-Mobile, Alltel and Clearwire also will be interested in using 700 MHz WiMAX to compete in both the data and VOIP markets.

Aloha believes that the second group of bidders is interested in offering mobile TV and mobile music. Qualcomm already owns some 700 MHz spectrum and has announced an $800 million commitment to roll out mobile TV and music services nationwide. Crown Castle also owns spectrum and plans to roll out mobile TV and music services in major markets next year. Major entertainment companies are likely to recognize that mobile TV and music services will be the next major growth opportunity in the media entertainment business. As a result, potential bidders may include companies like Sony, Disney and Time Warner that will want to control the technology and method of distribution for this new market."

[Copyright 2005 Access Intelligence, LLC. All rights reserved.]