The partnership entity Wireless DBS LLC, which includes EchoStar Communications Inc and DirecTV Group, was the top bidder for the auction’s second day, offering a combined $353m for 12 licenses in the spectrum, after two rounds of bidding.
In total, 1,122 licenses are up for grabs in the so-called advanced wireless spectrum, which the FCC expects would lead to new wireless broadband applications for Americans. The new spectrum would also enable the quadruple-play package of wireless voice, data, Internet and TV.
Wireless carriers, satellite companies and cable operators are expected to bid between $6bn and $20bn combined for their own piece of the airwaves, according to the federal treasury.
By the end of round five, bids totaled $1.47bn for 522 licenses.
If successful, bidders will be relatively unencumbered to use their piece of the 90MHz of spectrum how they choose.
The rules for the licenses are flexible and are not bound to a particular service or a particular technology, said an FCC spokesperson.
Exactly how the various companies bidding for the airwaves will use the spectrum real estate if they win has not yet been publicly disclosed. But satellite operators likely will use the spectrum to add wireless Internet access to their offerings, while cable companies may use it for VoIP, say some industry observers.
By bolstering their current service packages with wireless, the cable and satellite operators hope to be able to better compete against the country’s expanding phone companies: AT&T and Verizon Communications.
Wireless DBS’ latest bid bumped T-Mobile USA’s to second place. The carrier, the fourth largest in the country, is among the most aggressive bidders in the auction as it tries to boost its US market share. T-Mobile, which is owned by Deutsche Telekom AG of Germany, bid $212m for 27 licenses that would reach 2.85bn users, at the close of round five.
Coming in third was SpectrumCo LLC, a joint venture between Sprint Nextel Corp and four cable companies, which bid $212m for 4 licenses that would reach more than 1.5 billion people.
From there, the bidding dropped precipitously to $123m from Cingular Wireless LLC for 4 licenses that would cover a population of 70 million users.
But Cingular, as well as Verizon Wireless, already own broad swaths of wireless spectrum.
The auction will last until there are no new bids, which punters expect would take several weeks.
The licensees can mix and match various broadband services, but must comply with certain technical parameters so as not to cause interference. And if they buy a license and don’t use the spectrum, they will be unable to renew their license after 15 years, said the spokesperson.
The spectrum has been divided up into three separate 20-MHz blocks and three 10-MHz blocks. Various licenses cover various regional areas. So far, one the largest that has received a bid includes covers several northern states, including Chicago, Minneapolis and Cleveland.
