[governance] Airwaves - 700 MHz Auction Winners Named

[yehudakatz at mailinator.com]

Airwaves Auction Winners Named
By JOHN DUNBAR – AP

Ref.:
http://ap.google.com/article/ALeqM5jo4wgpBEmdBAEBBUfbGycMzWGw-AD8VHH2AG0 

WASHINGTON (AP) — The two largest cell phone companies dominated bidding in a
record-setting government airwaves auction, according to results released
Thursday.

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.


On the Net: DOCs & PDFs
Federal Communications Commission: http://www.fcc.gov/

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