Carriers Bid $1bn for Wireless Spectrum

$974 million in bids had already been placed Wednesday in the first day of bidding for 242 wireless licenses, with the heaviest bidding for licenses in the Los Angeles area. Four bidders dropped out of the process, however 31 still remain in the auction that will last until there are no more bids for any of the licenses.

The auction comes as part of the now bankrupt NextWave Telecom's settlement with the government over debt for airwaves. Originally, Verizon Wireless and T-Mobile had settled with NextWave to buy its entire remaining spectrum, however the government stepped in to annull the deal, and brought the licenses to auction.

Several companies are expected to be heavy bidders in the process, including Deustche Telekom owned T-Mobile, Cingular and Verizon Wireless.

Since the FCC had mandated that bids were limited to small entrepreneurs, larger carriers had to form partnerships or other arrangements to gain access to those airwaves.

The top bidder was Royal Street Communications LLC, which has ties to privately owned MetroPCS Communications Inc. It had bid close to $208 million for seven licenses through the first day, with much of it ($180 million) going towards licenses for the Los Angeles area.

T-Mobile, who partnered with Cook Inlet, does not have as much spectrum in key markets as other national carriers. It was leading in the bidding for 28 licenses totaling $180.3 million.

Market leading Cingular Wireless, through Edge Mobile LLC, was the top bidder for 20 licenses bidding almost $120 million. Verizon Wireless, a joint venture of Verizon Communications and Vodafone Group Plc, was the top bidder for 15 licenses after four rounds, offering $35.2 million.