Billion-Dollar Bidding Begins in Wireless Auction
The New Reality for Customer Engagement
Bidders for pieces of wireless spectrum kept secret until auction ends.
Top bidders put up a total of more than $2.4 billion on Thursday in the opening round of the Federal Communications Commission's auction of coveted U.S. government-owned airwaves.
The figure represents the highest bids received for five separate blocks of spectrum at the beginning of the auction, which is eventually expected to net the federal government at least $10 billion.
Companies qualified to bid include major carriers AT&T and Verizon Wireless, as well as possible new competitors like Google, EchoStar and Cablevision.
Identities of bidders will be kept secret until the entire auction ends under FCC rules.
Analysts say the major carriers could use the new spectrum to offer consumers more advanced services such as broadband access via mobile phones and wireless broadband to laptop computers.
Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group.
The $2.4 billion worth of opening high bids included a $472 million offer for a closely watched block of spectrum, known as the "D" block, which will have to be shared with public safety agencies under FCC rules.
It also included an opening high bid of $1.04 billion for the sought-after "C" block, which carries another condition requiring that it be open to all devices and software applications.
The FCC issued results of the first round of bidding for the government-owned spectrum shortly after the round ended at noon.
The FCC has set minimum prices of $1.3 billion and $4.7 billion for the D and C blocks respectively. These blocks could be used to create a national network.
Other spectrum includes local chunks set aside in blocks designated "A" and "B". The final, "E" block, is considered less useful because it is limited to one-way data transmission.
The 700-megahertz signals are valuable because they can go long distances and penetrate thick walls. The airwaves are being returned by television broadcasters as they move to digital from analog signals in early 2009.
The electronic auction is expected to continue for weeks or even months and will end when no more bids are submitted. The FCC plans to hold multiple rounds of back-and-forth bidding each day on each of five blocks of spectrum available for sale.
A second round on Thursday is scheduled to go from 2:30 p.m. to 4:30 p.m..
Results from each round are made publicly available on the FCC's Web site about 10 minutes afterward.
Starting on Friday, the FCC is scheduled to hold three rounds of bidding each day until further notice. Bidding typically accelerates as the auction progresses.
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