The U.S. government announced last month it was vacating a swath of spectrum, which it would put it on the auction block, perhaps this coming June.

The government estimates auctioning the spectrum will more than recoup the $936 million it will cost to relocate the wireless services of more 2200 systems spread across 12 federal agencies. While the U.S. Commerce Department won’t speculate how much the auction will generate, the last major spectrum auction raised more than $2 billion.

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But is the 1710-1755 MHz portion of spectrum that the government will make available, which it described as "beach-front" property, really that desirable for cellular operators? And what will all this mean for cellular users in terms of wireless services and prices?

Are Cellcos Motivated?

In real estate parlance, the government might be a motivated seller. Like a home owner who buys a new house before selling his or her current homestead, the U.S. government needs cellular companies to purchase the spectrum in order to pay to relocate federal agencies now inhabiting the radio waves. But if the government holds an auction, will bidders show up? The experts agree: maybe yes, maybe no.

One problem is the 1710-1755 MHz spectrum itself. While additional spectrum is always welcome, that swath of bandwidth lies outside the 1900 MHz cellular carriers typically use, according to Derek Kerton, principal of the Kerton Group.

Carriers have their eyes instead on the “Everyone Loves Raymond” spectrum -- the sub 700MHz frequencies long used by analog television broadcasters. Sub-700 MHz frequencies can travel three times the distance of traditional cellular signals and can more easily penetrate walls, perfect characteristics for delivering wireless broadband services to urban, rural and mobile customers, according to Kerton.

If the carriers do bid on the spectrum, what services might we expect to see them offer? The U.S. government is hoping the newly-opened radio waves will foster 3G.

Cingular and others are already offering 3G cellular data service and they are hoping that their mobile media services such as Verizon's V CAST service, will catch on. To offer video, music and data, more spectrum will be welcome, according to Kerton.

Other services likely to use the spectrum fall under the heading of "emerging technologies." Carriers could use the spectrum for data-rich synchronization among PC, phone and instant messaging. Current location services could be enhanced with mapping permitting, for instance, foremen to pinpoint crewmembers. In the enterprise, VoIP phones will be upgraded with video and linked to mainframe computers allowing for a mix of voice, video and data. Another potential application: real-time inventory assessment. Web browsing, search engines and photo recognition will be linked enabling a photo of London’s Big Ben to trigger a travelogue for Piccadilly Circus.

In addition, future use of the spectrum could literally remain up in the air. Carriers could use the new spectrum for air-to-ground communications when in-flight use of cell phones is approved, foresees In-Stat analyst Allan Nogee.