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FCC auctions $319 million in mobile licenses

Mobile providers buy $319 million in licenses from the Federal Communications Commission, although this latest round is expected to pale in comparison to upcoming auctions.

The Federal Communications Commission has auctioned off $319 million in airspace to wireless service providers, although this latest round is expected to pale in comparison to upcoming auctions that could fetch the U.S. treasury billions of dollars.

More than 1,000 wireless communications licenses were sold in a two-week auction that concluded Friday and involved airspace, or "spectrum," in 172 communities across the United States. The 14 companies with winning bids, mostly small businesses, will be able to use that spectrum for a variety of services, including mobile phone and data services, two-way paging, and voice mail and fax services.

Since the passage of the Telecommunications Act of 1996, the FCC has been auctioning off blocks of spectrum for a multitude of uses. Some of these auctions have seen billions of dollars flow to the federal government from communications companies because of the strong demand for this limited resource.

This auction was relatively modest by past standards, but much attention is focused on two upcoming auctions that should involve most of the major wireless phone providers, including Nextel Communications, SBC Communications, Verizon Communications, Sprint PCS and Deutsche Telekom-backed VoiceStream Communications.

The FCC just opened a major wireless auction to large bidders such as Nextel by removing a requirement that the bidder be a small company for some licenses, and by breaking the licenses into smaller pieces so companies could buy several licenses in different locations and still fit under the national spectrum cap the FCC has in place to ensure multiple wireless competitors. see related story: Congressmen press for 3G wireless

That auction, expected to be held in November, is largely a re-auction of spectrum that fell into default by previous auction winners such as NextWave Telecom.