Wireless Spectrum Bids Trigger Open Access

A bidder on Thursday offered $4.71 billion for a key slice of wireless airwaves being sold by the government, triggering a condition that the spectrum be accessible to any device or software application.

After 17 auction rounds, the bidding for the C block of 700-megahertz spectrum surpassed a $4.64 billion minimum set by the Federal Communications Commission (FCC).

As a result, the winner of the airwaves will have to abide by the open-access conditions, which had been sought by Internet search leader Google and adopted by the FCC before the auction.

No further bids on the C-block airwaves occurred in the subsequent round of the auction, a development that could mean the bidding on the C-block airwaves is over.

At the start of the auction, bidders were given a handful of waivers that allow them to sit out a round and still remain eligible to rejoin the bidding later.

But Stifel Nicolaus analyst Rebecca Arbogast said all the bidders’ waivers have probably been used.

The bidders’ identities are being kept secret, under FCC rules, until the entire auction ends. Analysts, however, have said the most likely bidders for the C-block airwaves are Verizon Wireless or Google.

Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group.

The C block is one of five pieces of 700MHz spectrum being offered in auction. The 700MHz signals are valuable because they can go long distances and penetrate thick walls. The airwaves are being returned by television broadcasters as they move to digital from analog signals in early 2009.

Companies qualified to bid also include major wireless carriers such as AT&T as well as possible new competitors like Google, satellite TV provider EchoStar and Cablevision Systems.

The open-access requirement on the C block is aimed at spurring more competition in the wireless business.

Currently, U.S. wireless carriers restrict the models of mobile phones used on their networks. They also limit the software that can be downloaded onto them, such as ringtones, music or Web browsers software.

AT&T and Verizon have been moving away from that restrictive stance in recent months.

The auction is due to continue until there are no more bids. The top bids on Thursday morning totaled $13.69 billion for all five spectrum blocks.