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Wireless License Auction Delayed

Telecom: Amid urging by mobile phone firms and Congress, FCC postpones bidding by six months.

August 01, 2000|From Bloomberg News and Associated Press

WASHINGTON — Verizon Communications and eight other mobile phone companies on Monday won a six-month delay of a U.S. auction of wireless licenses, as regulators conceded too many uncertainties exist to proceed with a sale in September.

The companies had raised concerns that television broadcasters that occupy the airwaves could deny access to the valuable segment, complicating their business plans. Members of Congress also had urged the commission to postpone the planned Sept. 6 sale, saying they were disheartened at estimates the auction will produce $2.5 billion while a similar sale in Europe yielded nearly $30 billion.

The Federal Communications Commission agreed that the auction presented unique circumstances, and a delay was warranted to give companies a chance to develop their business strategies. The agency set a new auction for March 6, 2001.

More than 90 television stations on channels 60-69 have rights to the frequencies that are being sold until at least 2006, as they switch to higher quality digital TV and move their signals to new airwaves. The switch could take years longer and lack of a plan to move the stations more quickly has raised bidder fears, the companies said.

Twelve wireless licenses covering six large geographic regions are being sold. Companies will likely use the licenses to offer high-speed data and Internet services along with other mobile services.

Meanwhile in Europe, seven major mobile telephone companies bid for rights to launch the next generation of mobile phone technology in Germany, Europe's biggest telephone market.

Some four to six licenses for the high-speed Universal Mobile Telecommunications System will be auctioned, and analysts expect them to fetch anywhere between $1.8 billion to $4.6 billion each.

The bidders include four companies that already operate mobile phones under the current GSM standard: Deutsche Telekom's mobile subsidiary T-Mobile, Vodafone AirTouch's unit Mannesmann, the British Telecommunications-backed Viag Interkom, and E-Plus, which is backed by a consortium of Japan's NTT DoCoMo Inc., the Netherlands' KPN Mobile and Hong Kong's Hutchison Whampoa Ltd.

The newcomer bidders are Debitel of Germany, France Telecom-backed MobilCom and another consortium called 3G, which represents Telefonica and Sonera Corp.

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