Auction of wireless airwaves seen nearing end

By Peter Kaplan

WASHINGTON (Reuters) - Bidding is expected to draw to a close soon in the closely watched auction of wireless airwaves that the U.S. government is selling.

After more than a month of bidding that has raised a record $19.59 billion, analysts said the auction of 700 meghertz airwaves is likely to end within a matter of days.

"I think it's going to be over next week," said Stifel Nicolaus analyst Rebecca Arbogast.

Both the FCC and the bidders have declined to comment on the specifics of the auction while it is ongoing.

Under rules set by the Federal Communications Commission, the auction must continue until bidding has stopped on all five blocks of spectrum offered for sale. Bidders' identities remain secret until the entire auction ends.

Earlier this week, the FCC accelerated the 700 megahertz bidding to 10 rounds per day, signaling that the agency is moving to wind up the auction, Arbogast said.

The FCC is expected to announce the winning bidders within several days after the bidding ends.

The agency also faces a decision on what to do with the one block of spectrum that did not meet its minimum bid price, the "D" block of spectrum. Under FCC rules, the winner of that piece of spectrum would have to give police, firefighters and other public safety groups priority use during an emergency.

The FCC could decide to re-auction the D-block airwaves and possibly modify the rules and the minimum price to make it more attractive to potential bidders. FCC officials have declined to comment specifically on what they will do.

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.

Potential bidders in the auction that began January 24 range from entrenched carriers AT&T Inc and Verizon Wireless, to possible new competitors like Google Inc, EchoStar Communications Corp and Cablevision Systems Corp.

Verizon Wireless is a joint venture of Verizon Communications Inc and Vodafone Group Plc.

Bids have surpassed the minimum levels for four of the five blocks in the 700 megahertz auction, including a closely watched, nationwide piece called the "C" block.

Under rules sought by Google Inc and adopted by the FCC, whatever company wins the C block airwaves will have to make the spectrum accessible to any device or software application.

(Reporting by Peter Kaplan; Editing by Carol Bishopric)