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EVOLOVING WIRELESS WORLD : Bids Exceed All Expectations at Airwave Auction : Communications: Six firms offer a total of $145 million for licenses to provide new wireless services.

July 26, 1994|JUBE SHIVER Jr. | TIMES STAFF WRITER

WASHINGTON — The federal government's first-ever auction of the airwaves drew bids far in excess of expectations Monday, with six companies offering more than $145 million for licenses to provide a new generation of wireless communications services.

Armed with cellular phone links to their advisers, representatives of 29 bidding companies anxiously paced the floor of the Omni Shorham Hotel and competed aggressively for the 10 nationwide licenses available for a wireless technology called narrow-band personal communications service.

The auction, held by the Federal Communications Commission, is the first in a series of controversial sales involving more than 4,000 wireless communications licenses over the next five years. Experts had predicted the sales would ultimately raise $7 billion to $10 billion for the federal government, but the aggressive bidding Monday suggests the ultimate return could be much higher.

Although Monday's auction is not expected to end until midweek, jubilant government officials were already declaring it a huge success.

"This far exceeds any expectation that any auction theorist had projected," said U.S. Rep. Edward Markey (D-Mass.), who chairs the powerful House Telecommunications and Finance subcommittee. No one, he added, had "contemplated anything of this magnitude."

By the third round late Monday, bids for each of the 10 licenses exceeded $6.5 million, with one company offering $50 million for a pair of nationwide licenses. Contestants, who bid anonymously on computer terminals, hope to use the radio frequencies to offer a variety of services, including two-way paging, wireless voice messaging and data transmission using portable devices no larger than a cigarette pack.

The FCC, which historically has awarded communications licenses by lottery or administrative hearings that chose applicants on the basis of their ability to serve the public interest, said it would identify victors later this week.

In addition to narrow-band PCS, the FCC this week will also auction about 600 licenses for interactive video and data services, a wireless service that will provide an electronic return path that viewers can use to respond to what they watch on television. The IVDS auction, to be conducted in traditional oral outcry fashion, will begin Thursday.

This week's auctions are forerunners of the sale next year of licenses for even more advanced wireless services: so-called broad-band PCS, an alternative to cellular telephones, and multi-point distribution service, a wireless video service that can provide interactive TV, data transmission and telephone service.

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