And the airwaves go to
WASHINGTON (AP) - March 21, 2008 AT&T Inc. and Verizon Wireless combined to account for $16
billion of the $19.6 billion bid in the auction, an Associated
Press analysis of Federal Communications Commission data shows.
Verizon Wireless bid $9.4 billion and AT&T $6.6 billion.
The results raised concern that the auction failed to attract
any significant new competitors to the cellular telephone market to
challenge the dominant companies. For example, Google Inc. was not
among the winners, meaning the search engine giant will not be
entering the wireless business.
One new entrant, Frontier Wireless LLC, owned by direct
broadcast satellite television company EchoStar Corp., won nearly
enough licenses to create a nationwide footprint. Frontier bid $712
million, according to FCC data.
The spectrum was made available thanks to the nationwide
transition to digital broadcasting. The hope is that consumers will
benefit from more advanced wireless services such as high-speed
Internet access. The money raised will be used to help public
safety programs and offset the federal budget deficit.
Despite the dominance in the auction by the major cell
providers, the FCC chairman was upbeat about the auction results.
"A bidder other than a nationwide incumbent won a license in
every market," Kevin Martin said. As a result, there is the
potential for a "wireless third-pipe" competitor to emerge in
every market across the nation.
Broadband access is dominated by the major telecommunications
and cable companies. Martin wants wireless to emerge as a third
platform, creating competition.
But Ben Scott, policy director of Free Press, an advocacy group
that supports greater access to communications services, said the
auction failed in that regard because Verizon Communications Inc.
already is a dominant provider of Internet access.
"The prospect of a genuine third pipe competitor in the
wireless world is now slim to none," he said.
Until Thursday, the names of the bidders were kept anonymous in
an effort to discourage collusion during the auction.
Verizon Wireless, a joint venture between Verizon Communications
Inc. and British telecom giant Vodafone Group PLC, won nearly every
license in the consumer-friendly "C block."
The frequencies, which encompass about one-third of the spectrum
at auction, are subject to "open access" provisions pushed by
Martin. That means people on the network that is built can use
whatever phones or software they wish.
Google posted a bid for the C block licenses early in the
auction, assuring that the open-access provision would be put in
place, but the offer was not enough.
Verizon Wireless won enough of the C-block licenses to cover
every state but Alaska. The company said it was very pleased with
the results, which will allow it to "continue to grow our business
and data revenues."
AT&T said it will have "quality spectrum available for new
services covering 95 percent of the U.S. population," according to
Ralph de la Vega, president and chief executive of the company's
wireless unit.
The third leading bidder was Qualcomm Inc., which pledged $1.03
billion. Included in that total is $472 million the company pledged
toward the block designated for the creation of an emergency
communications network. The bid was well under the FCC-required
minimum of $1.3 billion, so Qualcomm's winning total comes to $558
million.
The agency agreed to separate this D block from the rest of the
auction so the winners could be announced. Not including that
block, winning bids totaled $19.1 billion.
Also Thursday, Martin said he had ordered an investigation by
the FCC internal watchdog into the circumstances surrounding the
failure of the block to attract a winning bid.
Public interest groups asked the agency on Wednesday to
investigate allegations about a meeting between Frontline Wireless
LLC and its financial backers and a company called Cyren Call,
created by Nextel Corp. co-founder Morgan O'Brien.
Frontline was widely expected to bid on the public safety
spectrum block. But the company dropped out before the auction
began after failing to meet a minimum required payment.
Cyren Call was acting as the agent for a nonprofit public safety
trust that would share the network with the winning bidder.
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On the Net:
Federal Communications Commission: http://www.fcc.gov/
