U.S. Nets $1B in Airwave Auction

date: 19th December 2000, source: Wireless.NewsFactor.com

Bids on wireless licenses across the United States approached the US$1 billion mark after the third day of the U.S. Federal Communications Commission (FCC) airwave auction, as demand remains strong for wireless spectrum in major markets from coast to coast. A total of 87 companies are vying for 422 FCC licenses that will enable them to launch 3G wireless technology, expand their coverage and improve services.

At the close of bidding on Tuesday, the auction's first two rounds had produced $501 million for the U.S. Treasury. The rush subsided somewhat on the second day, with bids totaling $166 million, and the grand total was expected to reach just over $1 billion on Thursday.

Big Apple Lure

Because many licenses are set aside for small bidders that serve rural markets, telecommunications giants are joining forces with entrepreneurs in an effort to acquire more spectrum while complying with FCC limitations.

Theta Communications led all parties after five rounds, with bids totaling $165 million. A joint venture of New York regional phone systems and investors, Theta offered the auction's three highest bids -- $70 million, $49.5 million and $49.5 million each -- for New York City licenses.

Major Markets Follow

New York City-based Verizon Wireless, operating through Cellco, was second in bidding at $158.8 million, spending $44 million and $30.6 million on licenses in Los Angeles, California and Chicago, Illinois respectively, the second and third largest U.S. cities.

Bellvue, Washington-based VoiceStream Wireless came in third with $107 million in bids, offering $44 million for a Los Angeles license and $19.3 million for a Dallas, Texas license. Coloma Spectrum bid $20 million on a license in San Francisco, its regional home. Salmon PCS, a Cingular company, bid for a total of 60 licenses, the most by any company.

The auction is expected to raise some $20 billion for the U.S. Treasury, industry analysts say. Bidding is expected to continue into the new year, or until all 422 licenses are taken.

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