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The U.S. government recently auctioned off a large, important band of radio spectrum called AWS. There's a lot of confusion about the new AWS band these days, so we've created this handy guide to explain all the nitty-gritty details.

Although this article focuses primarily on AWS, it's hard to explain AWS without touching on some general radio spectrum topics and the other major cell-phone bands, so we'll cover some of that, too.

The AWS auction was conducted by the FCC (Federal Communications Commission,) the arm of the government responsible for (among other things) regulating radio spectrum and the industries that use it. The auction took place August 9 - September 19, 2006.

AWS stands for Advanced Wireless Services, although that's really not important. The FCC gives each band a name mostly just to make them easier to refer to. AWS, PCS, BRS, WCS... are all just arbitrary names for bands.

Each band is designed with certain types of services in mind, and therefore has some rules associated with how it can be used. AWS was designed with "3G" mobile phone service in mind, so it does come with rules that would make it unsuitable for wildly different uses like satellite communications or TV broadcast, for example,

However, in keeping with our government's free-market policies, the FCC does not usually mandate that specific technologies be used in specific bands. Therefore, companies that are proud new owners of AWS spectrum are free to use it for just about any 2G, 3G, 4G, or future mobile phone (or similar) technology, as they see fit. This is in contrast to Europe and some other parts of the world, which do mandate that specific technologies (like GSM or WCDMA) be used in each band.

One critical thing to understand about radio spectrum is that it's all allocated for something. Spectrum is a limited and extremely valuable resource. There is very little "empty" spectrum that isn't used for anything. In fact, this is what the US radio spectrum allocation chart looks like:

Each little section of that chart has a different use. Some is used by the military, police and firefighters. Other parts are allocated to boats and planes, and satellites take a fair chunk as well. RADAR uses radio waves, so there are bands for that, too.

The huge blue sections you see are for analog TV and FM/AM radio broadcasts. Obviously they take a huge chunk of spectrum, which is why the move to digital TV is so important; it's much more efficient and will free spectrum for other uses. Some UHF analog TV channels have already been freed up and sold to companies that will use them for live digital TV broadcasts to cell phones.

So if the spectrum is so crowded and all in use, where did the AWS band come from? Some of it was actually very rare unallocated spectrum, but much of it was used by the government, including the Department of Defense. Therefore, in December 2004, congress ordered the DoD to vacate that spectrum, and established a Spectrum Relocation Fund to pay for replacing all radio equipment using that spectrum with new equipment that will use different spectrum.

That kind of relocation is very difficult and expensive, which is why it doesn't happen often. It's also why the FCC has very limited options when trying to carve out "new" spectrum to auction off.

All cell phone service requires radio spectrum bands to operate in. Companies offering cell phone service need licenses from the FCC in order to use those bands.

Such licenses are usually sold at auction, but those auctions are rare, and once the licenses are sold, the winning bidders then have a lock on that spectrum. New companies entering the market can't just buy new licenses; they generally have to find some way to deal with the companies that hold the existing licenses.

The same is true for existing companies that find they need more spectrum. Each call and each data connection takes up a bit of spectrum, so as the population grows and more people use cell phones, networks require more spectrum to handle the additional calls and data usage.

Upgrading to new "3G" technologies also requires additional spectrum. Newer technologies are more efficient, but companies usually need to keep the old networks running for many years while they roll out the new technology and transition to it, so customers with old phones aren't left behind. Often the new and old technology each need to run in their own separate chunk of spectrum, (as is the case with EVDO and WCDMA,) so a surplus of spectrum is required to make such upgrades.

But companies can't just knock on the FCC's door and say "more spectrum please." That's part of what motivated Cingular to buy AT&T Wireless, and Sprint to buy Nextel. Spectrum is valuable enough to drive large mergers and acquisitions just to obtain more of it.

Large spectrum auctions by the FCC have historically happened about once a decade, but technology seems to be moving faster and requiring more spectrum these days, and no one knows for sure when the FCC will be able to auction off more spectrum after AWS.

All of this is why spectrum is the strategic asset for any wireless company.

Lack of spectrum is why T-Mobile hasn't been able to launch 3G before now. Lack of spectrum also hindered Verizon's EVDO rollout in some areas, until they found a company willing to sell them existing licenses in those areas.

Conversely, a surplus of spectrum is what has enabled Sprint to rent out its network to a large number of new MVNOs, without worrying about running out of spectrum for its own customers.

That's why AWS spectrum is so valuable, and why most of the large industry players plunked down megabucks to buy some of it, even if they don't yet know what they're going to do with it. No wireless company wants to end up needing more spectrum five years from now, and not able to get any.

Editor in Chief Rich became fascinated with cell phones in 1999, creating mobile web sites for phones with tiny black-and-white displays and obsessing over new phone models. Realizing a need for better info about phones, he started Phone Scoop in 2001, and has been helming the site ever since. Rich has spent two decades researching and covering every detail of the phone industry, traveling the world to tour factories, interview CEOs, and get every last spec and photo Phone Scoop readers have come to expect. As an industry veteran, Rich is a respected voice on phone technology of the past, present, and future.

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