Feb 01 2008
700 MHz Airwave Auction Exceeds $4.6 Billion, a Win for Consumers
WASHINGTON — Feb 01, `08 — Although a major auction of prime public airwaves, the 700 MHz, is far from finished, there already appears to be a big winner: the US consumer.
A bid on the largest portion of public wireless airwaves, now being auctioned by the US government, reached $4.7 billion Thursday, surpassing a threshold price that would trigger so-called open-access rules that would allow any legal mobile device or software program to use those airwaves.
While bidding was anonymous, analysts speculated that Google and Verizon Wireless, a joint venture between Verizon Communications and Vodafone Group, were the likely bidders on that swath, or about one-third of the total spectrum being auctioned.
Winners, however, will not be known until the entire auction by the U.S. Federal Communications Commission ends, a process that could take several more weeks. The auction began Jan. 24.
To retain the open-access conditions on that spectrum, a minimum $4.6 billion bid was required. The commission is selling a spectrum that is being freed as part of the switch to digital television in February 2009. The airwaves are considered especially valuable because the frequencies travel long distances and can easily pass through walls.
The rules, advocated by Google and a coalition of consumer and public interest groups, will help pry open traditionally closed wireless networks that prevent people from taking their phones with them when switching providers.
Google, AT&T and Verizon Communications are among 214 qualified bidders for nearly 1,100 licenses to pieces of the spectrum that vary from a nationwide swath to regional slivers.
Because of strict rules to prevent collusion, bidders won’t be identified until the auction ends, and companies are forbidden from commenting on their activity. Based on the limited bidding information available, Verizon is probably the high bidder on the open-access chunk, but Google is also a possibility, said Blair Levin, an analyst at brokerage Stifel, Nicolaus & Co.
“The amount of activity that we’ve already seen occurring demonstrates just how significant the interest is in this piece of spectrum,” FCC Chairman Kevin J. Martin said.
“The openness requirement is important both in terms of the innovation it will lead to on the edges of the network and the ability of consumers to take advantage of that innovation,” Martin further added during a briefing with reporters yesterday.
