$4.7B Bid In FCC's Wireless Auction

A bid on the largest portion of public wireless airwaves, now being auctioned by the federal government, reached $4.7 billion on Thursday, triggering a provision to allow any device or software to work on that spectrum.

While bidding is anonymous, analysts speculate that Google Inc. and Verizon Wireless, a joint venture between Verizon Communications Inc. and Vodafone Group PLC., are the likely bidders on that swath, which is about one-third of the total spectrum currently being auctioned.

However, winners will not be known until the entire Federal Communications Commission auction ends, a process that could take several more weeks. The auction began Jan. 24.

To retain the open-access conditions on that spectrum, a minimum $4.6 billion (euro3.09 billion) bid was required.

The FCC is selling off the spectrum that is being freed as part of the switch to digital television in February 2009. The airwaves are considered especially valuable because the frequencies travel long distances and can easily pass through walls.

More than 214 bidders had qualified for the auction, although only a handful was expected to bid on that section with the open access provision.

Google had lobbied hard to make open-access conditions part of the spectrum, which the major telecom companies have fought.

FCC Chairman Kevin Martin said at a press conference Thursday that the open access rule will help foster innovation in handsets and applications. The spectrum, he added, could make high-speed wireless Internet service "more ubiquitous" and more competitive with cable and DSL.

Google and Verizon Wireless are the likeliest bidders on this swath, Stifel Nicolaus analyst Rebecca Arbogast said Thursday, but there's an outside chance that AT&T Inc. and EchoStar Corp. also submitted bids.

If Google does not come up the victor, it could still get some of the spoils. Open-access provisions do just that: open up access for devices and applications. And that, Argobast said, could mean easier and more widespread use of Google's search engine and other products.

"They definitely moved the ball," she said.

The auction could raise as much as $15 billion for the U.S. Treasury. So far, the auction, through 18 rounds, has raised nearly $13.7 billion.

Martin said he anticipates this auction will probably exceed the $13.8 billion record set in a previous auction.
By Dibya Sarkar