WASHINGTON — Wrapping up the most lucrative government auction in history, regulators said Friday that they have $16.9 billion by selling slices of the nation's airwaves to giant wireless telephone companies eager to own new pieces of the dwindling spectrum.
The auction, begun by the Federal Communications Commission in December, drew more than 100 rounds of bidding from scores of wireless and cellular telephone carriers fighting over 422 licenses in 195 markets nationwide.
Three Los Angeles licenses fetched $1.4 billion, or about $450 million each, second only to New York, where some licenses sold for more than $2 billion.
"The spectrum is like real estate, and this is prime, beachfront real estate," said Ira Brodsky, president of Datacomm Research Co., a Chesterfield, Mo.-based wireless consultant.
Though analysts questioned some of the eye-popping prices, wireless companies said they need the added spectrum to enhance their existing cellular phone networks, particularly in heavily populated markets. The spectrum should allow carriers to improve the quality of their service and reduce the number of dropped calls.
Carriers also are stockpiling spectrum in anticipation of the next generation of wireless products and services, including music beamed to car radios and cell phones that can display video.
"This is going to enable us to offer state-of-the-art services," said George Crowley, chief executive of Maryland-based Salmon PSC, which teamed with Cingular Wireless to win one of the sought-after Los Angeles licenses.
The top bidder in Los Angeles was Verizon Wireless, the nation's largest wireless carrier. AT&T Wireless, with a smaller partner, Alaska Native Wireless, picked up the third Los Angeles license.
Nationwide, Verizon paid $8.8 billion for 113 licenses in Los Angeles, New York, Chicago, Boston, Washington, San Francisco and other cities. Verizon officials declined to comment Friday, saying auction rules prohibited them from communicating with other bidders for two more weeks.
Cingular, a joint venture of BellSouth and SBC Communications, paid $2.3 billion for 79 licenses nationwide. AT&T and its partner scooped up 44 licenses for a total of about $2.9 billion.
But it may be a while before consumers notice any improvements in their cell phone service, analysts warned, because of a variety of legal challenges.
