AT&T  and Verizon Wireless will be using their new spectrum licenses to move into next-generation wireless technology, according to recent announcements by both companies. AT&T and Verizon bid about $16 billion for the new licenses in a recent auction by the Federal Communications Commission that many observers described as a "once-in-a-lifetime" opportunity.
4G Services
AT&T said Thursday that its successful bids for the B block will give it the capacity "to meet customer needs as the company moves to higher-speed" fourth generation, or 4G, services.
It added that the new 700-MHz spectrum from the auction, along with other licenses it recently acquired, will cover 100 percent of the top 200 markets in the U.S. and 87 percent of the entire U.S. population. The new licenses, the company said, will allow customers to do more with their wireless devices and will lead to wireless connectivity being embedded in more devices.
The newer technologies will include LTE, or Long Term Evolution, and HSPA+, providing peak speeds of 100 Mbps or more. By the end of this year, AT&T said, it is planning on delivering 3G to about 350 leading U.S. markets.
Verizon Wireless said Friday that its new spectrum licenses will also allow it to roll out a new generation of wireless services. According to news reports, the company said its next-generation network will launch as early as 2010, also using LTE. Chairman and CEO Ivan Seidenberg reportedly described the spectrum acquisition as "nothing short of a transformative experience" for the company.
Verizon said its objectives in the auction had included filling in gaps in its current wireless coverage, such as in Los Angeles and Atlanta. Its newly acquired C-block spectrum has open-access conditions, imposed by the FCC after a lobbying effort by an alliance led by Google. These conditions mean that third-party devices and software will be able to work on those frequencies.
Seidenberg told news media Friday that the conditions are fine, since the company's thinking about open architecture "goes much beyond anything" the FCC might have in mind.
Bidding Against Themselves
Bill Ho, an analyst with industry research firm Current Analysis, said Verizon's and AT&T's plans for their new licenses were "not a surprise," He added that LTE can offer "tremendous" range and speed.
As for Google, it is now confirming that its goals included triggering the open-access provisions for the C block. On its Public Policy Blog, Google counsels Richard Whitt and Joseph Faber wrote Thursday that the company had been prepared to pay a price "somewhat higher than the reserve price" of $4.6 billion, which had to be reached in order to trigger the open-access conditions.
"But it was clear," they wrote, "that Verizon Wireless ultimately was motivated to bid higher." All bids were anonymous during the auction and made by phone and the Internet.
In fact, the Google lawyers revealed, "in 10 of the bidding rounds we actually raised our own bid -- even though no one was bidding against us -- to ensure aggressive bidding on the C block."
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