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Verizon Wireless, AT&T Dominate FCC Airwaves Auction

6:55 am on March 22, 2008 | Category: Business, Cellular, Regulation, Telecom Services, Wireless

Verizon Wireless emerged as the biggest winner in a recent auction for U.S. wireless data airwaves, bidding more than $9 billion, but it and other big carriers will have to give greater flexibility to consumers seeking to access alternative services on the mobile web.

The new guidelines promoting open networks could promote more innovation, such as better wireless multimedia services, according to analysts. America’s two leading carriers, AT&T and Verizon, still won about 80% of the airwaves auctioned however, spending $16 billion of the $19.6 billion raised by the U.S. federal government.

Google, an internet search company which doesn’t operate a cellular network but has been trying to make inroads into the wireless business, didn’t win any of the 1,090 spectrum licenses sold, but met the minimum reserve bid of $4.6 billion required to trigger open access to wireless data networks. Many analysts believe that Google has made significant progress without actually spending any money, as open wireless networks will let mobile phone users access Google services in more places.

“This could be very positive in bringing new kinds of devices and a lot more mobile computing, and we’re already seeing the industry move more in this direction because of the auction,” commented Harold Feld, senior vice president of Media Access Project, a public interest group.

Consumer organizations, however, are concerned about the auction’s failure to produce any additional nationwide competitors in the wireless market.

“This is the best spectrum that will probably become available in our lifetime, and who gets it? The same companies that are charging too much for text messaging, too much for ringtones and too much for service in general,” commented Chris Murray, senior counsel for the Consumers Union.

FCC Chairman, Kevin Martin, defended the auction, noting that many small carriers won many regional licenses, balancing the major wins of nationwide carriers.

“The auction was a significant success not only in terms of the money raised,” Martin explained on Thursday. “A bidder other than a national incumbent won a license in every market.”

The only spectrum not sold was the D-block of airwaves, dedicated to public safety purposes. San Diego-based chipmaker, Qualcomm, did place a bid on this spectrum, but fell short of the FCC’s minimum reserve price.

The FCC hopes to re-auction the public safety spectrum, possibly in the fourth quarter of this year, Martin revealed.

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