Telcos Ante $250M for 'Last Mile' Bidding Rights

FRAMINGHAM (04/10/2000) - Thirty-five companies have anted-up a total of $250 million for the right to bid on spectrum that's well-suited for 'last mile' connections between a long-distance carrier and a business customer in an auction the U.S. Federal Communications Commission will kick off this Wednesday. Final bids for 14 licenses in each of 175 economic areas around the country in the FCC's 39-GHz band auction could reach the $1 billion mark, according to industry analysts.

Winstar Communications Inc. in New York - which bills itself as one of the largest holders of spectrum designed to provide 'last mile' service that uses the airwaves to provide local loops for voice, video and data to bypass entrenched local telephone companies - made the largest up-front payment to the FCC for spectrum in the 39-GHz band auction, at $85 million.

Advanced Radio Telecom Corp., a wireless broadband wholesaler in Bellevue, Wash., made the second-largest up-front payment at $31.5 million, while the AT&T Wireless in nearby Redmond, Wash., plunked down $20 million.

David Hawley, a fixed wireless analyst at The Yankee Group in Boston, called the 39-GHz spectrum a "sweet spot" of the frequency spectrum that would serve well to "provide last mile broadband access" for users looking for alternatives to local telephone companies. Fixed wireless customer get their "last mile" connections through the installation of small rooftop antennas that hook them into a long-distance carrier or an Internet service provider - a process that Hawley said makes for a speedier hookup than waiting for the local phone company to install a wired high-speed line.

"These companies are looking to provide T-1 (1.54M bit/sec.) service and up,'' over the new frequency spectrum, Hawley said. The winning bidders, Hawley added, could then provide "last mile" service to corporate customers at a lower rate than charged by the local phone carriers.

But even though fixed wireless service may be the paramount business plan of many of the bidders, the FCC has put few restrictions on the use of the 39-GHz band. In a lengthy opinion and rule-making decision it reached earlier this year, the FCC decided to impose few restrictions on the use of the new spectrum.

Though Winstar's primary business is built around fixed wireless service, it argued strongly for inclusion of mobile communications - possibly making 39-GHz spectrum a cellular-type service band - as one of the uses for the frequency band, according to the FCC opinion. A Winstar spokesman said the company declined to disclose its intent for the 39-GHz spectrum.

A spokesman for AT&T Wireless said any of the spectrum it may win would be used for its 'Project Angel' service that's intended to use wireless connections to hook up residential subscribers to the long-distance networks operated by parent AT&T.

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