AT&T, Verizon Wireless dominate in record airwaves auction

WASHINGTON -- The two largest cell phone companies dominated bidding in a record-setting government airwaves auction, according to results released Thursday.

AT&T Inc. and Verizon Wireless combined to account for $16 billion of the $19.6 billion bid in the auction, an Associated Press analysis of Federal Communications Commission data shows. Verizon Wireless bid $9.4 billion and AT&T $6.6 billion.

The results raised concern the auction failed to attract any significant new competitors to the cellular telephone market to challenge the dominant companies. For example, Google Inc. was not among the winners, meaning the search engine giant will not be entering the wireless business.

One new entrant, Frontier Wireless LLC, owned by direct broadcast satellite television company EchoStar Corp., won nearly enough licenses to create a nationwide footprint. Frontier bid $712 million, according to FCC data.

The spectrum was made available thanks to the nationwide transition to digital broadcasting. The hope is consumers will benefit from more advanced wireless services such as high-speed Internet access. The money raised will be used to help public safety programs and offset the federal budget deficit.

Despite the dominance in the auction by the major cell providers, the FCC chairman was upbeat.

"A bidder other than a nationwide incumbent won a license in every market," Kevin Martin said. As a result, there is the potential for a "wireless third-pipe" competitor to emerge in every market across the nation.

Broadband access is dominated by the major telecommunications and cable companies. Martin wants wireless to emerge as a third platform, creating competition.

But Ben Scott, policy director of Free Press, an advocacy group that supports greater access to communications services, said the auction failed in that regard because Verizon already is a dominant provider of Internet access.

"The prospect of a genuine third pipe competitor in the wireless world is now slim to none," he said.

Until Thursday, the names of the bidders were kept anonymous in an effort to discourage collusion during the auction.