I have received several mails from listers this week asking how much
license spectrum might cost to lease. While I am not an expert on the
matter (I can recommend a variety of good legal counsel though), I did
come across a 2005 presentation available online. With a caveat that I
do not know this source and that costs have likely been driven up in the
past two years, this can provide some guideline. The most salient points
are the author's estimate that BRS/EBS spectrum (2.5 GHz) might run .015
to .1 cents per pop/per MHz.

http://www.biacompanies.com/PDF/Valuing_EBS-BRS_Spectrum_2005.pdf

Let's use the Rexburg, ID example from the youtube news bit I posted
yesterday. If the above numbers are close, then two 6 MHz channels worth
of a license that covered a population the size of Rexburg (about 17.2k
people) would cost between about $3,100 to $20,600. In actuality, these
cover multiple towns so let's just pretend a license covers a 100k
population. In such a case that 12 MHz worth of a license in 2005 values
would be between $18,000 to $120,000.

While the above is little more than a WAG, it might provide some frame
of reference. 

I should also make a related note about an announcement Intel made this
week at its Intel Developers Forum (IDF). Intel said it will ship its
Echo Peak chip set that supports both Wi-Fi and WiMAX beginning in 2008.
So far, the laptop makers Acer, Asus, Lenovo, Panasonic and Toshiba have
announced they will use the Echo Peak chipset in notebooks shipping in
mid-2008.

This is significant because this begins the "zero cost CPE" stage of the
WiMAX market whereby the user provides his or her own means of
connecting to WiMAX base stations. In other words, you are only building
the infrastructure, which is obviously quite different than having to
provide and install clients as is necessary in a fixed wireless
environment. Of course, base station density gets driven up, but even
that is a new world with the advent of femto cells, which would also be
self-procured (by the user). 

A femto cell is essentially an in-home or in-business mini cell that
connects to your broadband router. We are all familiar with these in
Wi-Fi, but what is new is that these are soon to be produced using
license bands and cellular or WiMAX technology. It is very interesting
stuff since it reduces the operator need to spend some measure of
additional CAPEX to increase coverage, while also moving the traffic
from a femto into the broadband connection which could also mean freeing
up capacity on the external cells. An interesting side note on femtos
that has so far not made it into the debate is that this throws the Net
Nuetrality debate on its head because it would mean the guys right now
screaming the most against Net Neutrality will actually have their
cellular traffic funneling into another carriers' broadband network in
many case (e.g., a T-Mobile cellular customer that has a T-Mobile femto
cell that the user connects to his Time Warner cable modem). Fun stuff!

Patrick Leary
AVP, Market Development
Alvarion, Inc.
o: 650.314.2628
c: 760.580.0080
[EMAIL PROTECTED]

Visit Alvarion at WiMAX World
Chicago, September 25-27
Booth #409




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