Strike Up The Broadband

The FCC is auctioning off `the Louisiana Territory'

The Federal Communications Commission is unlocking what could be the final frontier in America. But will the pioneers come?

On Feb. 18, the agency begins auctions for the biggest expanse of airwaves ever. This 1,300-megahertz chunk, envisioned for high-speed broadband communications, exceeds the capacity used by all existing wireless services combined--including TV, radio, and cellular phones. "This is the equivalent of opening the Louisiana Territory," says FCC Chairman William E. Kennard. Strategis Group Inc., a consultancy, says the auction could raise up to $4 billion.

HEAVY HITTERS. It's a realm so vast, in fact, that the companies operating there could compete in everything from local calling to two-way data and video. "If you want broad-based competition, this is the way to jump-start it," says Jack Reagan, a Legg Mason Wood Walker Inc. analyst.

Heavy hitters have lined up to bid, including wireless mogul Craig O. McCaw, Baby Bells US West and SBC Communications, cable-TV giant Comcast, and direct-satellite broadcaster Echostar Communications--all of whom are hush-hush about their plans.

So will this be the next telecom Gold Rush? Not immediately. Noticeably absent from the bidding are long-distance giants that could use the spectrum to compete in local service. Analysts figure those companies may be preoccupied with their existing wireless ventures. For now, the only bidders talking big about their plans for the new frontier are small wireless startups. Oh, pioneers?

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