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August 9, 2006
By Tara Seals
The FCC began a much-anticipated wireless spectrum auction on Wednesday, covering 1,122 licenses and 90Mhz of airwaves at 1710MHz to 1755MHz and 2110MHz to 2155 MHz, the largest chunk ever to be auctioned off in the United States. Auction 66, which has been delayed several times, could take weeks to complete, concluding only when all 168 participants stop bidding.
The Advanced Wireless Spectrum (AWS) is being reapportioned away from military and law enforcement and earmarked for broadband communications services. The auction should raise about $15 billion for the U.S. government.
The AWS bidders include big names like Cingular Wireless, T-Mobile USA, and Verizon Wireless, along with Sprint Nextel Corp.’s joint venture with cablecos Comcast Communications, Time Warner Cable, Cox Communications and Bright House Networks, operating the name SpectrumCo. Further, satellite TV companies EchoStar and DIRECTV have teamed under the “DBS LLC” moniker to bid. A handful of regional wireless and small rural communications companies round out the participants. Also, it is rumored that BWA ISP Clearwire Corp., which recently raised $900 million in funding from Intel Corp. and Motorola Inc. when it announced its plans to convert to the WiMAX standard, also is interested in AWS.
The government has collected $4.3 billion in upfront payments. So far, the top three bids are DBS LLC, which paid $972.5 million; SpectrumCo, which paid $637.7 million; and T-Mobile, which paid $583.5 million.
The spectrum is seen as a potential ace in the quad-play hole for those companies without nationwide broadband facilities, who are feeling the crunch of competition from broadband network owners like the RBOCs. This description fits all bidders except Cingular (owned by AT&T Inc. and BellSouth Corp.) and Verizon, both of whom already have plenty of spectrum and are directly affiliated with their ILEC owners. Their AWS intentions are thus far unclear.
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