U.S. Closes Lucrative Airwaves Auction
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Bids totaled nearly $13.9 billion in the latest and most lucrative auction of the public airwaves.
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One day and two rounds into the long-awaited spectrum auction by the Federal Communications Commission, the highest bids total $2.78 billion, according to news reports. The auctioned frequencies could result in a new era for broadband wireless, unlocked handsets, and nationwide emergency communications.
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The head of the Federal  Communications Commission wants to require the winning bidder  in an upcoming auction of valuable wireless airwaves to make  them accessible to consumers using any device or software  application, an FCC source said on Tuesday.
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The upcoming 700MHz spectrum auctions by the U.S. Federal Communications Commission (FCC)&#160;have drawn bid applications from giant companies including Google and AT&amp;T. But a number of small companies and individuals have submitted bid applications as well.Late Tuesday, the FCC announced that it had accepted bids from 96 applicants and has another 170 applications that are incomplete for the auction of highly coveted spectrum that can be used for voice or wireless broadband service.Some of those applicants may not complete their applications. In the FCC&#39;s advanced wireless services auction in 2006, 252 organizations submitted applications, and there were 168 qualified bidders.It&#39;s typical that several initial applicants will bow out before they have to submit deposit payments, said analyst Jack Gold of J. Gold Associates. &quot;When it comes to putting down earnest money, many [applicants] back away or can&#39;t get the money,&quot; he said.Applicants have until Jan. 4 to pay their deposits or resubmit their applications for the auction, which begins Jan. 24.The FCC designed the auction in an effort to attract small bidders. Up for sale is 62MHz of spectrum in the 700MHz band, now occupied by U.S. television stations. In late 2005, Congress passed legislation requiring U.S. TV stations to move to all-digital broadcasts and abandon analog spectrum between channels 52 and 69. The deadline for TV stations to end broadcasts in the 700MHz band is February 2009.The spectrum is broken up into five blocks, with three of the five blocks divided into small geographic areas. A 12MHz block of spectrum called the A block is divided up into 176 small geographic areas, called economic areas, as is the 6MHz E block. The 12MHz B block is broken up into 734 local areas called cellular market areas. Bidders can win multiple regional or local licenses.But the chances of small companies winning significant amounts of spectrum is &quot;pretty slim,&quot; Gold said. &quot;Any areas with significant population densities will bring in the big boys, who seek revenues from a mass market,&quot; he said. &quot;I suppose some smallish rural areas may be of less interest to AT&amp;T [or] Verizon, but these guys want true countrywide networks, so they will likely bid there anyway.&quot;Several unfamiliar names are among the prospective bidders who submitted incomplete applications:-- Office of Spectral Ecology, listed as an unincorporated association, with one board member, based in Montreal.-- Dragon Arch, listed as a corporation based in New York City.-- FaithFone Wireless, a Phoenix wireless carrier launched in September 2006. FaithFone is a self-described &quot;purpose-driven Christian mobile phone company, offering a cell phone service combining faith and family content.&quot; FaithFone&#39;s wireless service offers daily devotionals, Bible passages and a prayer of the day through text messaging.-- The Navajo Department of Information Technology.-- Part-15.org, a nonprofit organization for users of unlicensed wireless spectrum.Smaller companies with annual revenue of less than $15 million that have submitted complete applications include:-- Grain Spectrum, based in Sarasota, Florida, a minority-owned company focused on building wireless networks for government users.-- GreenFly, a mobile services provider founded in 2006 and based in Scottsbluff, Nebraska.-- Xpressweb Internet Services, an Internet service provider based in Kanab, Utah.The auction, expected to raise more than $10 billion, is likely to last several weeks. Many spectrum experts call the 700MHz band &quot;beachfront&quot; property because it can carry wireless broadband signals three to four times farther than some other spectrum bands.Since early December, applicants have been in an FCC-mandated quiet period. The FCC spectrum auction rules prohibit collusion on bidding plans.
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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.
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The high bids totaled $3.2 billion in the U.S. Federal Communications Commission's auction of wireless spectrum licenses in the 700MHz band.
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Frontline Wireless, a startup that had planned to bid in the U.S. Federal Communications Commission&#39;s upcoming&#160;700MHz spectrum auction, has &quot;closed for business,&quot; a spokeswoman said Wednesday.Frontline, backed by veterans of the wireless industry and U.S. government, was one of the major advocates of a plan for the FCC to pair about 10MHz of spectrum set aside for emergency response agency communications to another 10MHz to be sold in the auction starting Jan. 24. The auction winner would then be required to build a wireless network that emergency responders such as police and fire departments could share with commercial interests.Frontline had also pushed the FCC to adopt so-called&#160;open-access rules&#160;on part of the 62MHz of spectrum to be auctioned.The FCC in July largely adopted the emergency communications auction plan advocated by Frontline and other groups, and it approved an amended open-access plan on 22MHz of the spectrum. The FCC required that the winner of the 22MHz allow any wireless devices to connect to the network, meaning wireless telephone customers could bring their handset devices from other carriers. The FCC also prohibited the winning bidder on the 22MHz block of spectrum from blocking or slowing wireless and Web content from competitors.Frontline spokeswoman Mary Greczyn said Wednesday the company would have no further comment beyond saying Frontline is &quot;closed for business at this time.&quot;Up-front payments for bidding in the 700MHz auction were due Jan. 4. The up-front payment for the D block, the spectrum for emergency communications, was $128.2 million, and the payment for the 22MHz C block was $282.1 million.Frontline, based in Greensboro, North Carolina, first made a splash in early 2007, when it&#160;proposed an open-access network&#160;that emergency responders would share with commercial providers. Frontline said then it planned to offer wholesale access to the network to other wireless providers.Frontline was backed by several heavy hitters in the wireless and tech industries, as well as former senior U.S. government officials. Haynes Griffin, founding CEO and president of Vanguard Cellular Systems, served as Frontline&#39;s CEO, and Janice Obuchowski, former head of the U.S. National Telecommunications and Information Administration, served as the company&#39;s chairwoman. Reed Hundt, a former chairman of the FCC, served as Frontline&#39;s vice chairman.James Barksdale, former CEO at Netscape, and John Doerr, a partner in the Kleiner Perkins Caulfield &amp; Byers venture capital firm, were among the company&#39;s backers.
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A handful of people who bid in the disastrous C-Block PCS auction in 1996 plan to participate in the upcoming 700MHz contest despite warning signs indicating the potential for similar troubles.Like the earlier auction, the 700MHz auction is set to occur in a faltering economy, presenting challenges to license hopefuls needing cash. Yet, just like that ill-fated auction more than 10 years ago, an oddball collection of participants plan to bid, this time including the Missouri Farmers&#39; Union, the Roman Catholic Diocese of Brooklyn, and Disney.The C-Block PCS auction was infamous because it was designed not just for companies with access to billions of dollars but for entrepreneurs interested in getting into the wireless industry. Postal carriers, lawyers, and doctors quit their day jobs and invested their savings, confident that U.S. Federal Communications Commission (FCC) incentives would help them make it big.But the auction turned into a debacle. Of the original 255 bidders, 89 emerged with licenses, and only a handful of them actually started businesses. The rest went bankrupt, sold their licenses for pennies on the dollar, or returned them to the FCC in an amnesty program.Take Vince McBride, an approved bidder for the upcoming 700MHz auction who lives in San Diego and has won and lost in several auctions. &quot;There are ups and downs, but I keep trying,&quot; he said.McBride was a postal carrier who sunk his life savings into the PCS auction in 1996. A series of lawsuits delayed the auction and then the award of licenses. During that time, Wall Street soured on the wireless market and license winners, who bid prices sky high based on attractive payment terms set by the FCC, struggled to finance their wins. McBride got lucky and returned his licenses to the FCC for little loss.Then the FCC reauctioned licenses and McBride won a new one, which he managed to sell for a nice profit. But in a subsequent reauction, he won another license that was later repossessed by the FCC, which was forced to give it back to the original winner after a series of lawsuits.McBride&#39;s sometime partner Scott Reiter, an emergency room physician who splits his time between Santa Monica and the Philippines, has had a similar series of wins and losses in FCC auctions. He too plans to bid in the upcoming auction. Reiter won a few licenses back in 1996 and shortly after got a few good offers from operators interested in buying them.&quot;I got greedy, basically,&quot; he said. He held out for better offers, which didn&#39;t come, and eventually had to sell his licenses at a loss.Reiter was undeterred, though. He entered the 2002 auctions for 700MHz licenses --&#160;back before there was a solid deadline for when TV broadcasters had to vacate the spectrum. He bought licenses in three markets, later selling the spectrum for a nice profit to AT&amp;T.&quot;When I bought that spectrum, it went up in value like crazy,&quot; Reiter said. McBride also won 700MHz licenses then, later selling them to AT&amp;T. They both agreed with AT&amp;T not to disclose the purchase price.Bidders are currently in a quiet period during which the FCC forbids them to discuss their plans for the upcoming auction. But some of them say that because this time around there is a fixed date for when the spectrum will be available to buyers -- 2009, after the TV broadcasters must vacate it -- the value is easier to gauge than in the previous 700MHz auction. However, it may be difficult for some bidders to get credit these days, which could help keep prices down, they say.While many of the individual bidders insist they intend to build networks if they win the spectrum, many likely have other plans. &quot;I think many of them want to buy and resell it,&quot; said Nadine Manjaro, a senior analyst with ABI Research. A look at the result of the earlier 700MHz auctions, which distributed what&#39;s thought to be less valuable portions of the band, could be spurring big dreams for bidders.Aloha Partners, one of the biggest winners in those auctions, sold its licenses to AT&amp;T for $2.5 billion late last year. Aloha spent over $40 million at the auctions but also later bought licenses from other companies for undisclosed amounts. It is thought to have made a handsome profit.While much attention has been focused on the billions that big companies like Google had to put up to enter the 700MHz auction, some of the licenses could go for quite cheap, which could be attracting some of the individuals hoping to turn around and sell the licenses for a profit. Some licenses in small markets require as little as $10,000 in an up-front payment, Manjaro said.Still, for bidders with bigger aspirations, the sinking economy will likely harm their efforts, unless they already have secured funding.&#160;The recent collapse of Frontline Wireless, a company created by luminaries in the wireless industry to win 700MHz licenses, has raised concern among other bidders. &quot;They had a really strong team of players, and for them to not be able to secure the money shows the impact of the economy,&quot; Manjaro said.One difference in the rules for this 700MHz auction compared to previous contests that could affect individuals who participate is that bidders will be anonymous. That could cut back on potential collusion, a problem that many have said plagued previous auctions.Another auction change, however, likely works against the smaller players. This time, license winners have just four years to build out a portion of their networks. That&#39;s a relatively short amount of time for smaller winners to raise money and build a network.A number of other license winners from the C-Block PCS auction are also approved to bid in the upcoming auction. Bill McKell, CEO for Horizon Chillicothe Telecom, an Ohio telecommunications provider, is on the list. His company was one of the first winners from the C-Block PCS auction to launch a network, but it later&#160;returned the licenses to the FCC.These previous bidders seem prepared to go ahead with this auction despite warning signs that the market might not work in their favor, just like in the PCS auction from 1996. FCC Chairman Kevin Martin recently acknowledged that poor economic conditions could impact the auction because bidders might struggle to raise capital.But these smaller bidders must be gamblers. &quot;Sometimes you get lucky,&quot; McBride said.
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Verizon Wireless and T-Mobile are  expected to be the most aggressive bidders for U.S. wireless  airwaves in a January auction that analysts say could give them  added resources to expand and improve service.
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A wireless startup company that planned to build a national public safety communications system has apparently bailed out of the upcoming airwaves auction, a move that creates doubt about the future prospects for the network.
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The auction for rights to a highly valuable swath of the nationâs airwaves will begin Thursday and is expected to include multibillion-dollar bids from the nationâs two biggest wireless phone companies.
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A new company that was expected to play a major role in the upcoming FCC spectrum auction says it is closed for business even before the auction begins.
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(InfoWorld) - T-Mobile USA Inc. came out the biggest spender in the U.S. Federal Communications Commission's Advanced Wireless Services spectrum auction, which ended Monday. Participants bid a total of nearly US$13.9 billion on 1,087 licenses to offer 3G (third-generation) mobile services in areas across the U.S. The auction began Aug. 9 and went on for 161 rounds. The radio frequencies could be used for services including data, voice and video on mobile devices. The auction is the first of two that should roughly double the amount of radio spectrum available in the U.S. for mobile services. The FCC is also preparing to auction frequencies around 700 MHz that have been used for TV broadcasts. Moving those to mobile use could take years. T-Mobile is playing catch-up against bigger carriers in introducing 3G services. Its bidding company, T-Mobile License LLC, had the winning bids on 120 licenses and will pay almost $4.2 billion for its spectrum. All told, the licenses it won could reach almost 475 million people, a number greater than the U.S. population. There was a wide variety of licenses up for auction, ranging from local to regional coverage. The five biggest bidders, led by T-Mobile, represented the country's biggest cellular companies. Cellco Partnership, representing Verizon Wireless Inc., came in second place with $2.8 billion in bids for 13 licenses. SpectrumCo LLC, representing Sprint Nextel Corp. and cable partners, bid almost $2.4 billion for 137 licenses and Metro PCS AWS LLC bid almost $1.4 billion for eight licenses. Cingular Wireless LLC, represented by Cingular AWS LLC, came in fifth with bids of more than $1.3 billion for 48 licenses. Overall, more than half of the 104 winning bidders that participated were certified as small businesses, according to the FCC. The agency put 1,122 licenses up for auction. The unsold licenses will be made available again in a future auction. The winners need to make down payments within ten days after the FCC puts out a public notice on the close of the auction. In the same time period, they have to submit long-form applications for the licenses.
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Google Inc. said on Wednesday that the  auction has closed for its initial public offering.
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Bidding stalled at $4.71 billion on  Thursday for a key piece of wireless airwaves being auctioned  by the U.S. government.
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TechWeb - The FCC's Advanced Wireless Services spectrum auction has concluded with 1,087 licenses auctioned off for nearly $14 billion.
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Bids on the opening day of a much-anticipated auction of public airwaves totaled $2.8 billion Thursday, according to the Federal Communications Commission.