Auction bid triggers airwaves open access

By Peter Kaplan

WASHINGTON (Reuters) - A bidder on Thursday offered $4.71 billion for a key slice of wireless airwaves being sold by the government, triggering a condition that the spectrum be accessible to any device or software application.

After 17 auction rounds, the bidding for the "C" block of 700 megahertz spectrum surpassed a $4.64 billion minimum set by the Federal Communications Commission.

As a result, the winner of the airwaves will have to abide by the open-access conditions, which had been sought by Internet search leader Google Inc (GOOG.O) and adopted by the FCC before the auction.

There were no further bids on the C-block airwaves in the subsequent round of the auction, a development that could mean the bidding on the C-block airwaves is over.

Bidders were given a handful of waivers at the start of the auction that allow them to sit out a round and still remain eligible to rejoin the bidding later. But Stifel Nicolaus analyst Rebecca Arbogast said all the bidders' waivers have probably been used.

The bidders' identities are being kept secret, under FCC rules, until the entire auction ends. However, analysts have said the most likely bidders for the C block airwaves are either Verizon Wireless or Google.

Verizon Wireless is a joint venture of Verizon Communications Inc (VZ.N) and Vodafone Group Plc (VOD.L).

The C block is one of five pieces of 700-megahertz spectrum being offered in auction. The 700-megahertz signals are valuable because they can go long distances and penetrate thick walls. The airwaves are being returned by television broadcasters as they move to digital from analog signals in early 2009.

Companies qualified to bid also include major wireless carriers like AT&T Inc (T.N), as well as possible new competitors like Google, satellite TV provider EchoStar Communications Corp (DISH.O) and Cablevision Systems Corp (CVC.N).

The open-access requirement on the C block is aimed at spurring more competition in the wireless business.

Currently, U.S. wireless carriers restrict the models of cell phones that can be used on their networks. They also limit the software that can be downloaded onto them, such as ring tones, music or Web browser software.

AT&T and Verizon have been moving away from that restrictive stance in recent months.

The auction is due to continue until there are no more bids. The top bids on Thursday morning totaled $13.69 billion for all five spectrum blocks.

(Reporting by Peter Kaplan; Editing by Gerald E. McCormick and Tim Dobbyn)