AT&T may bid in 700MHz FCC auction

AT&T is strongly considering an investment in the soon to be opened 700MHz frequency band when it becomes available through an FCC auction in January, company chief Randall Stephenson has admitted at the Web 2.0 Summit in San Francisco. While the company has opposed the rules of the auction, which demand that any winning bidder allow any supporting device and program to run on a future network, Stephenson noted that the extremely long range of the 700MHz band could outweigh any perceived challenges to its existing business model, which relies on locking customers into specific devices and restricting third-party software that sometimes competes with AT&T's paid services.

"It's a huge opportunity," he said. "It's beachfront property. When it comes to buying spectrum, it's the best you're going to find for a long time."

The carrier already took a preventative step in agreeing to buy a different part of the 700MHz band from Aloha Partners in a $2.5 billion deal that would potentially supply access to 196 million people, or roughly two thirds of the American population.

Such moves may affect future versions of the iPhone and other phones focused on cellular Internet access by providing an avenue for a faster and more pervasive connection than HSDPA or the recently launched HSUPA on AT&T's network. Both standards are a significant improvement in performance over EDGE but operate in the same 850MHz band, which prevents AT&T from easily covering a wider area. A 700MHz replacement technology will require a winning bid in the late January auction as well as the development of a suitable connection standard.

Stephenson also commented on his company's relationship with Apple and claimed that AT&T's network was an ideal candidate for Apple chief Steve Jobs when developing the iPhone, as the "ubiquitous" nature of EDGE meant users could reliably go online in more areas than the EVDO offered by Sprint or Verizon. 3G access will occupy a similar role once more areas gain access, the AT&T executive said. The sacrifices made to obtain the iPhone as an exclusive, which included the removal of AT&T branding and ceding control over software to Apple, were described as worthwhile.

"I'm not sure I could have asked for much more out of it than what we got," Stephenson noted.