MED move speeds auction's end

By the time you read this it could be all over for the spectrum auction. The Ministry of Economic Development has announced it will double the number of rounds held each day and increase the minimum bids for some lots.

By the time you read this it could be all over for the spectrum auction. The Ministry of Economic Development (MED) has announced it will double the number of rounds held each day and increase the minimum bids for some lots.

This should see the whole drawn-out process telescope in on itself and come to a halt some time soon - either that or it will drive up the price for the spectrum as companies find they have to bid more to both stay in the race and keep the race going.

Of course, the 3G spectrum lots are now as static as they have been for weeks. The three main bidders, Vodafone, Telstra Saturn and Telecom, have each picked one of the three slots available and bid around $5.35 million each. And there they've sat, unmolested, for almost the entire length of the auction. Nobody has bid against them, and no company looks likely to, either, for the simple reason that we still have the fourth slot to be sorted out after the auction. This is the band of spectrum that the Maori Council will own, and will be sold off at 95% of the average of the other three slots - a bargain, really.

The council will develop the spectrum in conjunction with a corporate body (presumably one of the registered bidders that wants 3G spectrum but hasn't bid yet) as part of the government's "Closing the Gaps" policy.

Sadly, this means nobody is interested in upsetting the apple cart by bidding against one of the three incumbents, as it will only push their own price up. While that's unfortunate for the government coffers in the short term, it's quite good for the rest of us in the long term because it means we will see more development of 3G services at a quicker rate and more cheaply than in other countries where the cost of buying 3G spectrum has been astronomical.

Meanwhile, over in the 2G slots, a flurry of exchanges has seen the price climb quite quickly in recent weeks. Walker Wireless, Vodafone and publisher INL seem to have the upper hand, but that's bound to change with the next round.

Personally, I'd knock the 3G end of the auction on its head, declare it over and done with and let them get started with the development. But it seems the auction manager has left the whole auction to run while one slot is being fought over.

The auction will be declared finished when two consecutive rounds go by with no bids being entered. That's fine. I don't expect we'll see 3G services being offered any time soon. I'm still hanging out for the so-called 2.5G stuff - GPRS and the like - which should see a rapid increase in data speeds. However, last week I spoke with Gary Newman from Motorola and he had some depressing things to say about trials of GPRS. In Australia they're only offering speeds similar to the 9600bit/s we get at the moment.

I hope that's just a short-term problem because quite frankly you won't get me upgrading my cellphone unless there's some gain. At the moment I get data in the form of SMS from Vodafone - but the news "snippets" I get are often late, few and far between and are nice but not essential.

Once the speed issues are sorted out, applications will be the next barrier to conquer and I know there are New Zealand companies ready to hit the ground running. That's a great sign, and I can only encourage more companies to start thinking about faster data connections to their field staff - it'll be here before you can say number portability.

Speaking of which - if I may don my angry eyes for a moment - what the hell are you all up to? First we have the ludicrous prospect of not being able to transfer our existing phone numbers over to a new carrier when we switch. Now we have nine telcos pushing for one particular agreement, Vodafone abstaining and Telecom saying "no way, Jose". It's taken 18 months to get to a point where a new study will be commissioned into cost benefits and that will take around six months to complete. Unbelievable. Roll on the commissioner, I say.

Paul Brislen is a Computerworld journalist. He can be contacted at paul-brislen@idg.co.nz. Letters for publication should be sent to cw-letters@idg.co.nz.

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