U.S. Gov't Prepares for Wireless Auction

It will cost the U.S. Government $936 million to move the wireless communications of twelve government agencies to other frequencies in order to allow the FCC to auction them off to companies. The auctions are expected to take place as early as June of next year.

Revenue from the spectrum could bring in twice the moving costs, Reuters reported. In February, an auction of wireless spectrum raised nearly $2.3 billion.

The frequencies reside in the 1710-1755 Megahertz and 2110-2155 Mhz bands, the same that are required for third-generation wireless technologies such as UMTS. Several companies, most notably T-Mobile USA, are looking at the auction to help launch their high-speed data services.

"We are very hopeful that by the end of 2006, and definitely in 2007, we'd be able to bring 3G services to the market. Some of this is auction dependent," T-Mobile USA senior vice president of Engineering Operations Neville Ray told BetaNews in an interview earlier this month.

The $936 million estimate is lot lower than what the industry had valued the transition at -- some several billion dollars -- and could indicate that U.S. wireless providers may be able to obtain spectrum for 3G at a much lower cost than their European counterparts.

A law signed last year marked the funds raised from the auction to cover the cost of the move, as long as it raises at least ten percent more than the $936 million estimate, or approximately $1.03 billion.

It could take up to four years to move the agencies to new frequencies, which cover the Defense and Justice Departments, FAA, NASA, and the Energy Department, among others.