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Firm might not bid on airwaves

Frontline Wireless, which had plans to build a U.S. public-safety network, closes just as the sale is about to start.

January 09, 2008|From Bloomberg News

Frontline Wireless, the company that sought to build a nationwide public-safety network, closed down, raising the likelihood that it won't bid in a U.S. government sale of airwaves set to start this month.

"Frontline is closed for business at this time," spokeswoman Mary Greczyn said Tuesday. "We have no further comment."

Greczyn declined to say whether the shutdown was permanent or whether the closely held company had abandoned its plans to bid in the Federal Communications Commission's spectrum auction.

Frontline, a Silicon Valley-backed company whose founders include former FCC Chairman Reed Hundt, wanted to build a public-safety network that would reach 99% of the U.S. population in 10 years. The company would have then leased the airwaves at wholesale rates to commercial carriers when emergency responders weren't using them.

The company, based in Greensboro, N.C., probably wasn't able to make a required down payment for the auction and won't bid, said Stifel Nicolaus & Co. analyst Blair Levin.

The decision is good news for AT&T Inc. and Verizon Wireless, the two biggest U.S. wireless carriers, Levin said.

Frontline would have had to win a nationwide stretch of airwaves at the auction in order to build the network. The company's investors included venture capitalists John Doerr and Ram Shriram, both board members of Google Inc.

The airwaves are part of a larger spectrum block that could raise as much as $15 billion for the government. Phone carriers plan to use the airwaves to offer more high-speed content, such as Internet video, on mobile devices.

The airwaves will be freed when television broadcasters convert to digital signals in February 2009.

"Frontline's departure raises the question of whether another new entrant is likely to succeed in accomplishing the goal of building out a new national wireless network," Levin said in the note. "We think the answer is probably no."

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