Verizon, AT&T Big Winners In 700 MHz Auction

The two telecom companies bid more than $16 billion, constituting the vast majority of the $19.6 billion bid in the FCC spectrum auction.

W. David Gardner, Contributor

March 20, 2008

2 Min Read

Verizon Wireless and AT&T, as expected, won most of the spectrum in the FCC's 700 MHz auction, according to FCC Chairman Kevin Martin.

Verizon Wireless bid $9.6 billion to grab a large block of valuable spectrum, bolstering its nationwide network and positioning it to roll out next-generation, high-speed wireless infrastructure known as LTE. AT&T bid $6.6 billion to grab spectrum that will supplement the 700-MHz spectrum it purchased before the auction from Aloha Partners for $2.5 billion.

According to an analysis by The Associated Press, the two telecom companies bid more than $16 billion, constituting the vast majority of the overall $19.6 billion that was bid in the FCC auction. With Verizon Wireless and AT&T dominating the auction so completely, hopes that the auction would allow for the creation of a new nationwide wireless service provider were dashed. However, Martin said a large enough percentage of the new licenses went to other companies that competition in the wireless market would increase.

Verizon Wireless, a joint venture between Verizon and Vodafone Group, won the highly sought-after nationwide "C" block of licenses. AT&T won 227 licenses from among the B block of regional licenses. Frontier Wireless gained airwaves in the E block of the auction, covering almost all of the United States.

Google, which had pushed for opening up at least some of the spectrum over the initial resistance of Verizon and AT&T, did not garner any licenses in the auction.

A section of the C block will be set aside for devices and services that can be interchangeable by consumers among different vendors. The Verizon unit revealed earlier this week that it expects to certify devices from outside vendors for use on its network by the end of the year.

AT&T has noted that its GSM-based infrastructure already leads to easy swapping of devices and services with other GSM suppliers. Retailers have recently been selling new "unlocked" cell phones that can be used on both AT&T and T-Mobile networks in the United States.

The two other major mobile phone services providers -- Sprint Nextel and T-Mobile -- didn't bid in the auction. Sprint has been occupied with management upheaval and deciding whether to concentrate on 3G or WiMax technology, while T-Mobile is preparing to make use of spectrum it won with a $4 billion bid in an FCC spectrum auction in 2006.

The public-safety D block didn't get enough bids to reach the reserve set by the FCC. Consumer groups have asked the commission to investigate whether public-safety groups discouraged wireless companies from bidding on the block of spectrum. The commission and Congress have said they will study what to do next with those frequencies.

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