Wireless auction concerns rise as some airwaves languish

By Peter Kaplan

WASHINGTON (Reuters) - Bidding remained stalled Tuesday on a key piece of spectrum in the government's wireless airwaves auction, prompting concern regulators will have to modify rules requiring some of it be shared with public safety agencies.

After 12 rounds of bidding over four days, the Federal Communications Commission still has received only one bid for a portion of the 700-megahertz airwaves known as the "D" block, that could also be used by police, firefighters and other public safety officials.

Top bids for all five spectrum blocks on offer reached nearly $8.66 billion on Tuesday. The auction is widely expected to net the federal government at least $10 billion.

The lone $472 million bid for the D block spectrum, which came in the first round of the auction last Thursday, is far below the $1.3 billion minimum price set by the FCC.

Rep. Edward Markey, chairman of the House Subcommittee on the Internet and Telecommunications, told a hearing on Tuesday that the lagging interest in the D block was "discouraging."

A lack of bidders for the D block could be a reflection of the credit crunch that has hurt the ability of companies to raise capital, according to industry analysts.

Under rules adopted by the FCC, the winner of the D block airwaves will be required to negotiate an agreement with public safety agencies, build out a nationwide network and then give those agencies priority use during emergencies.

If no bidder meets the minimum price for the D block, the FCC can re-auction that piece of the spectrum and possibly modify the requirements.