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TechnologyDaily Mobile
Italy's Wireless Auction Expects Success
Following the heels of a White House directive that federal agencies collaborate with the Federal Communications Commission to delegate its share of wireless spectrum to speed up the rollout of third-generation wireless services, another major airwaves auction begins this week in Italy.
The auction, which is slated to begin Oct. 19, is expected to rival the record-breaking auctions hosted by Germany and Great Britain. Competitors such as Hong Kong-based Hutchinson Whampoa and Italy's Telecom Italia are expected to pony up for the $22 billion for five universal mobile telecommunications licenses (UMTS) slated for third generation services such as wireless Internet access.
Italy is the latest of many European countries that have joined ranks with the United States to dole out the spectrum auction style, a method that largely has been lauded as the most economically efficient means of distribution.
Belgium has plans in November to auction its own UMTS spectrum. Sweden has similar plans. New Zealand recently closed its auction earning nearly $32 billion. Australia is earmarking more than $2.5 billion that it expects to reap from the auction while the Czech telecom ministry announced Monday it hopes to raise nearly $500 million in an auction for four licenses.
"Certainly, the auctions in Europe have taken everyone by surprise by the very astronomical prices these licenses have commanded in the [United Kingdom] and Germany," explained Michael Bartholomew, director of the European Public Telecommunications Network Operators Association, a telecommunications trade association based in Brussels. "We believe high prices [paid for spectrum] represent an indirect tax on consumers. These costs will eventually need to be passed on somehow."
The high revenues raised in spectrum auctions are enabling countries to address long term financial demands, such as paying off national debts. Bartholomew asserts that they should reinvest funds into the maintenance and future of the industry.
With the prospect of high returns on the auctions, countries are reevaluating the processes and adopting the U.S. auction model. But Simon Towler, first secretary for trade policy at the British Embassy, maintains that such "revenue raising consideration are not part of the equation." He argues that auction models proved to be the most fair and efficient means of providing spectrum allotments.
Some of the larger wireless providers that have purchased spectrum blocks outside of their home base, are raising concerns among observers over the impact on regional competition.
Nevertheless, the European Commission Competition Commissioner Mario Monti has ordered an investigation into the pricing of the spectrum auctions and potential fallout in the European market.
Consolidation of various providers and collaborative teams can be a potential threat to competition, according to former head of the International Bureau at the Federal Communications Commission Scott Harris, but the impact is all in how the auctions are designed. "If you are giving out three license and two companies get together and decided to buy all three licenses, yes that's a problem."
But in spite of the inconsistencies and troubles, the process likely will grow, especially as developing markets discover they possess a resource highly valuable to foreign investors.
Japan Getting Closer to IT Legal Framework
At the fourth meeting of an advisory group charged with recommending an IT strategy for Japan, participants on Monday discussed the legal system necessary to support e-commerce, including security and privacy protection. Chief Cabinet Secretary Hidenao Nakagawa told the 20-member panel that the government recognized the need for an IT framework of laws and regulations, according to The Japan Times. Prime Minister Yoshiro Mori said he would make an effort to pass IT-related bills in the Diet, including the IT basic law and protection of privacy. Already, the government is expected to introduce electronic means of procurement by end of fiscal year 2003, two years ahead of schedule.
Plans for a one-stop-shop e-government portal are also in the works. Participants on the IT panel stressed concerns over cyber security, advocating punitive measures against those who commit cyber crimes, such as hacking. The group is scheduled to meet again in November and after concluding several rounds of discussion will present recommendation to the government.
China To Review Net Security Policy
China's national legislature will open a nine-day session next Monday to review 12 draft laws among which are changes regarding Internet security and information security and three amendments to laws concerning Chinese-foreign joint ventures, Chinese-foreign cooperative ventures and solely foreign-funded ventures in China.
Despite the potential market of more than a billion people, Internet growth may be slow for the Chinese. China Market and Media Research found that while more than 12 percent of urban dwellers were using the Internet, up five percentage points from 1999, more than half of Chinese urbanites still read newspapers and watch television, reports Xinhua News Agency. Nearly 30.5 percent of Internet users access the Internet at work, 34.2 percent at home and 8.3 percent go online at a friend's place. Another 17.7 percent rent computer time at Internet cafes and the rest, 8.6 percent, access the Internet at schools, according to the survey.
New Global Internet Provider On the Horizon
Rivaling the dominance of American telecommunications companies, Hong Kong based-Pacific Century CyberWorks (PCCW), an Internet and telecommunications company, will join forces with Telstra, Australia's dominant telecom provider, to establish a $4 billion global broadband cable network. The Financial Times reports that the network would span Asia, North America and Europe but eventually would be extended to encircle the globe. The plan follows the completion last Friday of the terms for a broad partnership between PCCW and Telstra, which includes the IP backbone company, a regional mobile joint venture and an Internet data center company.
- by Maureen Sirhal
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