US raises record 19 bln dlrs in wireless broadband auction
The US government has announced it had raised a record 19.6 billion dollars in an auction as bidders sought a prime segment of the US wireless spectrum.
Federal Communications Commission (FCC) chairman Kevin Martin said in a statement late on Tuesday that the 700 MHz auction that began on January 24 had closed Tuesday after 261 rounds of bidding.
Martin did not identify the companies that had bid for the licenses for the 1,099 frequencies in the 700 MHz spectrum being abandoned as television broadcasters complete a federally mandated switchover from analog to digital by early next year.
These high-speed, broadband frequencies, capable of rapidly delivering massive amounts of data easily through walls, are ideal for mobile Internet applications.
More than 200 companies were in the bidding, including telecommunications operators and industrial companies.
Martin said that the 19.6 billion dollars raised was nearly double congressional estimates of 10.2 billion and that all other 68 FCC auctions in the past 15 years combined had generated only 19.1 billion dollars.
The proceeds will be used to support public safety and digital television transition initiatives, he said. All US television broadcasting will be digital after February 17, 2009.
"This auction provided an opportunity to have a significant effect on the next phase of wireless broadband innovation. With the open platform requirements on one-third of the spectrum, consumers will be able to use the wireless device of their choice on those networks and download whatever software or applications they want on it," Martin said.
Nearly all the bids were made during the first week of the auction, particularly for the sought-after C-block, the only chunk of frequencies that covers the entire US territory, and by far the most expensive.
One bidder offered 4.71 billion dollars for the C-block, where only three major players have shown interest, according to analysts: telecom giants Verizon and AT&T, and Internet giant Google.
The other blocks on the auction block cover zones ranging from major portions of territory to small rural areas.
"Wireless broadband will be able to reach unserved areas of the country, and it will bring increased competition to the broadband sector that is currently dominated by DSL and cable providers," Martin said.
Acquisition of the C-block will allow a newcomer to telecommunications, like Google, to launch a new nationwide telecom network or provide an existing operator to strengthen its coverage.
Google last July said it would bid the government's minimum bid of 4.6 billion dollars for the C-block if the FCC ensured the winners would allow all companies access.
Google and public interest groups successfully lobbied the FCC to change the rules of the auction to ensure that the winners must allow their customers to download any software application they want on their mobile device, and to use any mobile devices they want on that wireless network.
That will mean a revolution for American consumers, who generally have been forced to use the handsets and the applications offered by wireless operators, which "block" their cellphones from use on others' networks.
After the auction, any cellphone maker, such as Apple and its iPhone, or any wireless software manucturer, like Google, can team up with other manufacturers that would automatically have access to the network.
Despite the overall success of the auction, the D-block, dedicated to create a nationwide public-safety network, failed to receive a bid that met the 1.3-billion-dollar reserve price, the FCC said.
"The FCC is now evaluating its options for this spectrum," Martin said, adding that the FCC remained committed to trying to solve "public safety's interoperability challenges."
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