The auction goes on and on, but the potential winners are already weighing the spectrum's benefits -- as well as its limitations

What exactly are the winners of the 700 MHz auction getting themselves into? The 700 MHz frequencies have been billed as “beachfront” spectrum. The band can go farther than any of its cellular and PCS counterparts, and many of the licenses come in broad chunks, making 700 MHz optimal for deploying the latest broadband wireless technology. But even the fabled 700 MHz has its limitations — and possibly even some disadvantages.

“The good news about 700 MHz is it penetrates second and third walls,” said Jeff Thompson, CEO of Towerstream. “The bad news about 700 MHz is it penetrates second and third walls.”

The low-frequency spectrum's propagation qualities will let Towerstream, a metro fixed wireless provider, punch its signal right through walls, allowing it to put customer premises equipment right into a user's office rather than on a building's rooftop, Thompson said. But those very same range benefits can work against the service provider when it comes to network planning in a large urban area, he said, because Towerstream may have to deal with the unique problem of in-building interference.

AT&T and Verizon Wireless have talked about the benefits of 700 MHz for their future long-term evolution networks, and many smaller providers are investigating the band for WiMAX deployments. But all 4G technologies benefit from a key enhancement that may create problems at 700 MHz: multiple input/multiple output (MIMO) smart antenna technology.

The spacing between MIMO antennas is determined by the wavelength of the spectrum transmitted — the lower the frequency, the longer the wavelength. MIMO antennas at 700?MHz will have to be positioned much farther apart at the cell tower and on the device than they would on PCS or Sprint Nextel's 2.5 GHz bands.

While that antenna spacing may not be too much of an issue at the cell site, it may present enormous problems with wireless device design. In fact, 4G networks at 700 MHz — or even new UMTS upgrades using MIMO techniques — may really only be useful in hotspot footprints. Cramming multiple 700 MHz antennas into a single handheld device could very well prove impossible.

“Only large devices have that kind of real estate, making MIMO optimal for laptops,” said Arun Bhikshesvaran, Ericsson's vice president of strategy and chief technology officer for North America.