There was a lot of talk and high expectations coming into the FCC’s Advanced Wireless Spectrum (AWS) auctions this summer. The cable companies, and satellite companies all made grand claims that they were going to buy spectrum rights, and offer alternative wireless services to compete with the cellular phone incumbents. Even web companies like Google were rumored to be sniffing out the auctions for some licenses. However, as predicted by the analysts at Techdirt where I write, it was much bluster followed by little bidding.

Although the cable companies are interested in buying spectrum to get into wireless, they are more “bargain hunting” than doing essential purchasing. But, how can you expect to grab a bargain when the other bidders are out of your league? Consider the auction-aggressive T-Mobile, which is lagging against its cellular competitors, and is hampered in offering modern, 3G services by spectrum constraints. T-Mobile is the most driven in this auction, and will certainly bid more than the MSOs (an industry term for cable companies), and likely more than the other telcos. It’s about survival for them. Other incumbent telcos can also be expected to bid high, both to get the bandwidth to offer additional services, and to block the entry of new competitors…and even just to aggravate existing competitors.

Cingular bought spectrum from Nextwave in 2004, then AT&T Wireless, thus already has considerable spectrum in many markets, but they have cash so should be expected to bid for strategic licenses. Verizon is cash-rich, and has designs to expand services, so they will bid high, perhaps just more than Cingular. Sprint has plenty of existing spectrum all over the chart, so they can be expected to sit in the rear, and simply cherry pick, looking for bargains and to fill in regional weaknesses. In the end, of course the mobile telcos (including regional carriers Alltel and US Cellular) are likely to bid higher than the newer entrants. So why is that?

In general, the mobile telcos are investing in property rights which have proven to be of value to them, and in which they have proven their ability to exploit. They have the expertise to utilize the spectrum, and to extract more value from it than MSOs or new entrants. This is not solely because of expertise, but also because of pre-existing investment in technology, staff, tower real estate, nationwide retail facilities, switching equipment, service layers, roaming relationships, vendor relationships, volume purchasing scale, and other advantages that new entrants in wireless do not share. Take, for example, the rough start the MVNOs such as Amp’d, ESPN, and Disney are having in the USA – it’s not easy, cheap, or risk-free to become a wireless carrier, even just a virtual one. Spectrum auctions also require a fair amount of cash or access to capital. Any smaller players are thus, disadvantaged.

The next thing limiting the MSOs bidding enthusiasm is that they have formed a consortium with Sprint. This is a true complementary relationship, where the MSOs have high-capacity fixed Broadband plant that covers the last mile, and Sprint has nationwide wireless but no DSL. As partners, Sprint and Cable can effectively compete against Verizon or AT&T, which have both mobile and fixed services. Sprint has a large swath of 2.5GHz spectrum in which it plans to offer WiMAX mobile broadband service nationwide (covering 85% of the population), and perhaps the MSOs see this as an unbeatable advantage, in which it’s better to “join ‘em” than try to “beat ‘em”. Thus, the Sprint partnership definitely serves to lower the MSOs demand for the AWS spectrum.

Ultimately, despite all the early talk from DBS/Cable/new entrants, they would face a massive bill for infrastructure deployment if they were to go wireless. That necessitates access to cheap spectrum, or else the business model will fail. That’s why we never expected much from the DBS crowd in this auction. They’re as outgunned as Johnny Lunchbox at a Sotheby’s art auction.

As for the rumors that web companies like Google would be active in this auction: forget about it. Google is learning through their simple, one-city-at-a-time Wi-Fi networks that the wireless infrastructure business is very complex, and hardly offers the same share-price multiple of earnings as their current lines of business. Why would a company with a stock valuation such as theirs want to get into telecom, where the multiples are substantially less?

For better or for worse, the spectrum auction is just another situation where the incumbents and the big dogs dominate. There has been ample arguments that this lowers the net benefit to society, and thus the FCC has historically taken measures “give a leg up” to smaller participants. Smaller bidders have been offered 25% discounts and preferential financing terms that were not accessible to the big dogs. But the outcome of these measures was just systematic abuse; wherein the big players were fronted by smaller bidders. Effectively, the same big companies won the auctions, while also accessing the discounts that were intended to put them at a disadvantage. The FCC has worked to avoid letting the incumbents access the discounts this time, but has offered little to actually put small or new bidders on equal footing – but really, how could they? The advantages of the incumbents run deep; expect them to dominate.

The ultimate mobile phone accessory? This is how mobile phone enthusiasts are referring to Nokia’s greatest comeback, the N810 WiMax internet tablet. This device is schedule to hit the American market around summer time and is expected to reach great sales due to the many features it sports, for instance it has a gorgeous 4.13 inch WVGA touch screen which is capable of displaying over 65 thousand colors and has a resolution of 800X400 (wide screen). Beyond the beautiful display, this device is capable to using mobile phone data networks if the mobile phone being used is Bluetooth compatible, the connection can be easily established between the two through a link cable or if the user is near a hot spot this device can use detect that WiFi connection and use it to access the web.

Before going any further we need to mention the GPS capabilities of this device. Users can take advantage of this integrated GPS for easy navigation or can access Google maps through a web connection, either way this tablet provides enough features to help users get around town.

The tablet looks much like the Creative Zen W media player which is also wide, however this Nokia’s tablet main purpose is to provide easy access to the web instead of multimedia playback which is what the Zen W was made for; don’t misinterpret this las statement though, the N810 WiMax is capable of media (audio/video) playback and has a 2GB of internal memory which makes it quite flexible, however some users will agree that 2GB is not enough, which is why Nokia included an expansion slot compatible with microSD cards which can go as high as 8GB.

The built in slide-out QWERTY keyboard is nicely done and makes it easy for users to type web addresses and send emails and by the way if you have a Gmail account you will see that the built in browser’s capabilities are amazing since it shows web pages exactly the way they are, in other words users have access to the real web through its high speed compatible ports. The browser it uses is powered by Mozilla, the same guys who provide the famous Firefox. The operation system it uses is the open source Linux-based OS2008 so you know that as far as security you are covered.

The are so many features found in this device such as easy access to RSS feeds through its reader, built-in multimedia player, and such, that is hard to cover them all in one article. If you are a mobile phone and web enthusiast then you will love the features found in Nokia’s internet tablet.