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Will Verizon become the only wireless company in the country?

T-Mobile fears for the future if Verizon spectrum purchase goes through. The competition is all about spectrum.

The Obama administration has announced a new Privacy Bill of Rights along with a Do Not Track option for web users. Google, Microsoft, and Yahoo are among companies signing on the agreement. It would put a Do Not Track button on your browser by later this year. That would turn off customized ads based on what you do online. The data could still be used for market research, new product development, or by law enforcement.

We're covering the issue of spectrum today. If you own a phone, a television, a radio or a tablet computer, you really need to understand spectrum. In fact, if you’re a citizen of the world today and wondering what the future of communications might look like, it’s a good idea to wrap your brain around that term.

All those signals that beam through the air travel on frequencies of the broadcast spectrum. And the assigning of those frequencies is a really big deal, especially for wireless companies serving the rapidly growing demands of smartphone owners and tablet owners. Companies like AT&T, T-Mobile, Sprint and Verizon want to get access to as much of the spectrum as they possibly can in order to build networks, get customers, and make money. You’ve seen all those ads for 4G networks lately, right? That’s all about spectrum.

That effort to acquire spectrum was at the heart of the failed acquisition of T-Mobile by AT&T. And it’s at the heart of a proposed deal between Verizon and a consortium of cable companies. Verizon wants to buy a large portion of spectrum from Comcast, Cox Communications and Time Warner Cable. T-Mobile has filed a complaint with the FCC seeking to stop the deal, saying it would leave T-Mobile unable to compete.

“What they're saying is the benefits of this transaction are way outweighed by harms to the public that would be caused,” says Susan Crawford, visiting professor at Harvard’s Kennedy School of Government and Harvard Law School. “Because from their perspective, what Verizon's trying to do with this spectrum deal is just foreclose competition, make it impossible for any maverick new entrant to show up. Verizon said as recently as a month ago it's got plenty of spectrum; in fact, it's sitting on spectrum it's not using and T-Mobile is saying don't let this go through."

Crawford says T-Mobile’s goals in this protest and the AT&T deal are the same: “T-Mobile felt forced to do a deal with AT&T last year because it wasn't getting access to enough spectrum. Now T-Mobile is saying we're not getting access to enough spectrum. Basically a lot of spectrum has been taken off the table in the last couple of years, spectrum that T-Mobile feels it needed in order to compete effectively. This is its last ditch battle to make sure that there's something left for it to buy."

Verizon and the cable companies seem to be marking out territory here by agreeing to market each other’s services and stay off each other’s turf. “Implicitly they're saying, ‘Comcast you cover wired connections, and Verizon, you cover wireless,’” says Crawford.

Thing is, demand for spectrum will keep going up as people get more smartphones and tablets and go online. And you can't make more spectrum. That’s impossible due to the realities of physics.

Christian Sandvig of the University of Illinois says we already have a spectrum shortage today but, he adds,”it's also important to note we've had a shortage of spectrum continuously since we've been thinking about it.”

So what do we do to meet our needs? “Our use of the spectrum continues to increase, says Sandvig. “At the same time, we keep thinking of ingenious new ways to allocate more spectrum and to use the spectrum we know about more efficiently. It's a little bit like we’re shoveling more coal on the fire and at the same time the fire is getting hotter and consuming more coal.”

The FCC is asking for public comment on this spectrum issue

Also in this program, IKEA is releasing a series of web videos to show you how much better your life will be if you would only buy more stuff from IKEA. At least one of the videos so far shows how easy it is to put an IKEA bed together. We sing along to that video with lyrics that reflect IKEA reality.

You can do it too! Just start singing after the first two piano chords, right?

Putting this together will be hard

We give you an Allen wrench

You'll wish you had some power tools

It will take four and a half hours

And it'll still look kind of weird

You'll want to curse in Swedish

We're really really sorry

About the author

John Moe is the host of Marketplace Tech Report, where he provides an insightful overview of the latest tech news.

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