FCC auction breaks record with US$9.3b in bids

date: 21st December 2000

The Federal Communications Commission ongoing auction of valuable airwaves broke a record on Wednesday, pulling in US$9.34 billion in bids. This total will likely keep rising as telecoms companies seek to expand and improve service.

The auction, which could last until mid-January and analysts expect to draw in US$11 billion to US$20 billion, topped the agency's 1996 auction of PCS licences that netted US$9.2 billion.

Nextel Communications which had said it had enough spectrum to grow its existing customer base by four or five times, dropped out after 19 rounds of bidding.

Attempts to contact Nextel for comment were not immediately successful.

Verizon Wireless, the joint venture between Verizon Communications and Vodafone Group, was way out in front of the auction after the 19th round, offering US$3.47 billion, including US$790.2 million for one licence covering New York City.

The company also bid US$494 million for a licence covering the Chicago area and US$424.6 million for one covering Los Angeles, according to data released by the FCC.

Salmon PCS, representing SBC Communications and BellSouth's joint venture Cingular Wireless, was in second, offering US$1.36 billion for licences including US$628.3 million for a second licence in New York City.

Alaska Native Wireless, which has ties to AT&T Wireless Group, was running a close third, offering just a few tens of millions of US dollars less than Salmon and bidding $581.1 million for the third licence available covering New York City.

Licences in big markets like Los Angeles, New York, Washington, DC, and Boston have drawn the highest bids where consumer demand is the highest for wireless services and companies are trying to improve service by reducing the number of dropped calls and fill holes in coverage.

After bidding on Thursday afternoon wraps up, the auction will be suspended until Jan. 5 for the US holiday season.

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