FCC: Spectrum Auction Expanded Wireless Competition

Cites New Entrants in Detailing Winning Bids

By Glen Dickson -- Broadcasting & Cable, 3/20/2008 6:09:00 PM

The Federal Communications Commission’s recent auction of 700-megahertz spectrum, which is being reclaimed from broadcasters as part of the digital-TV transition, was successful in not only raising a record $19.592 billion in revenues, but also in expanding wireless competition, the FCC declared late Thursday.

While large telcos AT&T and Verizon Communications scooped up prime chunks of real estate in the auction’s B and C blocks, some new players emerged as winners, too.

A complete list of winners is available online.

In releasing additional information about the winning bidders, the FCC highlighted the fact that a bidder “other than a nationwide incumbent” -- not Verizon or AT&T -- won a license in every market, and 99 such bidders won 754 licenses representing 69% of the 1,090 licenses sold.

The commission suggested that the presence of new entrants in the 700-MHz space could potentially create a wireless “third pipe,” besides cable or telco lines, in every market across the nation.

It also cited EchoStar Communications-backed Frontier Wireless, which won 168 licenses in the E-block for a near-nationwide footprint, as being “widely viewed as a new entrant.”

And the agency noted that smaller companies showed a particular interest in rural areas, where it has been trying to encourage more broadband access. A total of 75 new entrants won licenses to serve 305 rural areas out of 428 rural-service-area licenses.

For its part, AT&T said it was very happy with the auction’s outcome. It noted that the 700-MHz spectrum it picked up in the B block, combined with 700-MHz spectrum it already acquired from Aloha Partners last fall, will give it 100% coverage of the top 200 markets.

"AT&T's strong spectrum holdings position the company to further enhance the quality and reliability of existing wireless-broadband and voice services and to set the foundation for new-generation wireless-broadband technologies and services," said Ralph de la Vega, president and CEO of AT&T's wireless unit, in a statement.

The one unsuccessful part of the 700-MHz auction was the D-block -- a portion of the spectrum that was intended to be used primarily for public-safety applications and shared by private companies and public-safety organizations.

While several players including Frontline Wireless, a concern headed by former FCC chairman Reed Hundt, expressed initial interest in bidding on the D-block, no company stepped up to meet the minimum reserve price of $1.3 billion for the spectrum.

The commission announced Thursday an order in which it is officially “delinking” the D-block from the rest of the 700-MHz spectrum blocks, which will allow it to move forward in creating new rules to license the spectrum.