FCC auction key to Google and Yahoo! broadband

Business Week in the latest issue has outlined some key points in an upcoming Federal Communications Commission auction later this year for wireless spectrum.

Interestingly enough, the article is saying some view this as the last and best chance to create a broadband competitor to phone and cable companies. Interestingly, this is coming from Google (NASDAQ: GOOG), Yahoo! (NASDAQ: YHOO), and Intel (NASDAQ: INTC).

The upcoming auction is for the UHF wireless spectrum that television channels are vacating when broadcasting goes digital in 2009. The attraction is the range and strength of the spectrum as it can penetrate buildings easily and even go underground. The spectrum also has a much farther range than any sort of of current WiFi and WiMAX networks. The government may pocket as much as $20 billion for this spectrum.

The bidding auction process will be determined by July. It will be of no real surprise if Verizon (NYSE: VZ) and others, like AT&T (NYSE: T), will try to keep the auction process the same as it has been. If no rules change for larger package deals to be auctioned, then the large technology companies will have to pass. If the process changes and the government opens this up, you could actually have technology and internet operators participating in building the actual infrastructure for lightning fast 3G as well.

You can always bet, however, on money and personal interests to get in the way of progress.

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.