Bidders Officially Set for 700MHz Spectrum Auction

Traditional telecommunications powerhouses AT&T and Verizon will face an unusual lineup of challengers Jan. 24 when the Federal Communications Commission begins its auction of the spectrum being vacated by television broadcasters as part of the digital transition.

As the nation's two largest telecom carriers, AT&T and Verizon have planned all along to bid for the spectrum to expand their voice and broadband offerings. But, a year ago, no one would have expected search giant Google, chip maker Qualcomm, satellite television provider EchoStar or Microsoft co-founder Paul Allen to also be in the race for the spectrum.

Those challengers are among the 214 bidders officially approved by the FCC Jan. 14 to participate in the auction. The airwaves are considered particularly well suited for broadband since the signal properties can travel great distances and penetrate mountains, buildings and walls.

The spectrum for sale is divided into five sections, with the C block being considered the prime slice of the airwaves capable of supporting a national network. Bidding for this "beach front" spectrum begins at $4.6 billion. The other four blocks are dedicated to a national public/private safety network and smaller portions for regional and local wireless carriers.

Cumulatively, the entire spectrum for sale is expected to fetch as much as $15 billion. Once bidding begins in the Jan. 24 auction, the FCC will not release any information until all bidding is final, which means it could be late February or early March before the winners are known.

Whoever wins the C block will be obligated under FCC rules to make it an open network to which users can connect any legal device and run the software of their choice. If either AT&T or Verizon wins the C block, it will mark a significant change in direction for the wireless carriers.

Although both have made statements in recent months that they plan to open their current networks, AT&T and Verizon have traditionally dictated to consumers what devices can be used on those networks. When the open network strings were attached to the C block, Verizon went so far as to file a lawsuit to block the rules, but the carrier eventually withdrew the litigation.

The FCC rules came about largely because of heavy lobbying by Google to convince the FCC to mandate open networks in the auction.