SAN FRANCISCO (AFP) — US telecom giants Verizon Wireless and AT&T on Thursday took home the big prizes in a record-setting US wireless spectrum auction while Google got the open access it eagerly craves.
The 700 MHz band currently carries standard television broadcasts, and will be freed up when stations switch to all-digital broadcasting after February 17, 2009.
The spectrum is poised to become a conduit for high-speed telecommunications and Internet services delivered to mobile devices across the United States.
Carriers like the spectrum because signals travel long distances and penetrate buildings better than parts of the radio frequency spectrum they are now allowed to use.
Verizon bid 9.4 billion dollars for most of the licenses in the prime 700 MHz radio spectrum. AT&T won most of the regional licenses with bids totaling 6.6 billion dollars.
Meanwhile, Google's top bid barely surpassed the 4.6-billion-dollar minimum requirement but the online search king won what it really wanted by making certain that spectrum owners can't block out Internet or telecom rivals.
"Although Google didn't pick up any spectrum licenses, the auction produced a major victory for American consumers," Google lawyers Richard Whitt and Joseph Faber said in a written response to an AFP inquiry.
"We congratulate the winners and look forward to a more open wireless world."
Google insisted the FCC make open-access a condition of sale in the coveted "C-block" of the spectrum before it signed on as a bidder.
By barely bidding more than the minimum, Google managed to pay nothing while ensuring that companies whose life blood is the Internet will be able to offer high-speed services to mobile devices on the spectrum.
"We don't necessarily have to have our own spectrum," Google co-founder Serge Brin said in an interview prior to the auction.
Google's aim was to make certain people can freely connect with the entire range of mobile telephone and Internet service providers via the spectrum, executives said.
"All they were after was open access," said analyst Rob Enderle of Enderle Group in Silicon Valley.
"Google didn't really want to buy spectrum. They got what they wanted and they got it on the cheap. It was a nice strategy well executed."
Before the auction, Google chief executive Eric Schmidt assured reporters the California firm had no intentions to buy the spectrum, "build a network and put all these mobile devices out there."
"Wouldn't it be better if all these other companies do that and we just sit back and reap a benefit?" Schmidt said. "The auction is a tactic to an outcome and the outcome is end-user choice."
Verizon bought all the licenses in the C-block, except for Puerto Rico, for 4.7 billion dollars.
"We were successful in achieving the spectrum depth we need to continue to grow our business and data revenues ... and to continue to lead in data services and help us satisfy the next wave of services and consumer electronics devices," Verizon Wireless, which is owned by Verizon Communications and Vodafone Group, said in a statement.
The new rules mark a revolution in the US cellphone industry, where customers have largely been tied exclusively to their operators' handsets and applications.
"The locked nature of mobile phones really slows down innovation in the US market with respect to mobile" Brin said in the interview.
"In comparison, Europe is really quite ahead and typically doesn't have the phone locked to the network. We want to do as much as possible to make that happen."
The FCC raised a record 19.6 billion dollars in 261 rounds of bidding. There were 101 winners among 214 bidders.
"As a result of the auction, consumers whose devices use the C-block of spectrum soon will be able to use any wireless device they wish, and download to their devices any applications and content they wish," Whitt and Faber said.
"Consumers soon should begin enjoying new, Internet-like freedom to get the most out of their mobile phones and other wireless devices."
AT&T, the nation's largest telecom, won the bulk of the B-block licenses.
The D-block, which requires the buyer to work with authorities and set aside airwaves for public-safety and emergency uses, went unsold.
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