Incumbent Wireless Carriers Poised to Crush Competition at FCC Auction

7:05 am on August 29, 2006 | Category: Business, Regulation, Telecom Services, Wireless

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A few weeks ago, it seemed that one of the largest wireless spectrum auctions in U.S. history would open up the cell phone market to new competitors.

A number of new wireless startups, along with several of the country’s biggest cable and satellite television providers had all registered to bid, and were hoping to dethrone wireless incumbents like Cingular and Verizon Wireless.

As the auction has progressed, however, most of the new entrants have had their hopes dashed. The satellite television alliance of DirecTV and EchoStar Communications ended up dropping out of the auction early, while a consortium of cable providers has met with only limited success, and probably won’t have enough spectrum to launch a competitive cell phone service of their own.

Ultimately, Verizon, Cingular, and T-Mobile USA, seem poised to secure the majority of the 1,122 wireless licenses up for auction, maintaining their dominance of this fast-growing and highly competitive industry.

“The kings of the hill defended the hill,” said Ovum wireless analyst, Roger Entner. “The dream of another wave of new entrants has died.”

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    Edited by Jeremy Maddock