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Google's wireless plans are stymied

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Associated Press / March 21, 2008

WASHINGTON - The two largest cellphone companies dominated bidding in a record-setting government airways auction, according to results released yesterday.

Google Inc. was not among the winners, meaning the search engine giant will not enter the wireless business.

AT&T Inc. and Verizon Wireless combined to account for $16 billion of the $19.6 billion bid in the auction, an Associated Press analysis of the Federal Communications Commission data shows. Verizon Wireless bid $9.4 billion and AT&T $6.6 billion.

The results raised concern that the auction failed to attract new competitors to the cellular telephone market to challenge the dominant companies.

One new entrant, Frontier Wireless LLC, owned by leading satellite television company EchoStar Corp., won nearly enough licenses to create a nationwide footprint. Frontier bid $712 million, according to FCC data.

Until yesterday, the names of bidders were kept anonymous in an effort to discourage collusion during the auction. The bidders have 10 days to make down payments.

Verizon Wireless, a joint venture between Verizon Communications Inc. and British telecom giant Vodaphone Group PLC, won nearly every license in the consumer-friendly "C block."

The frequencies, which encompass about one-third of the spectrum at auction, is subject to "open access" provisions pushed by the FCC chairman, Kevin Martin. That means people on the network can use whatever phones or software they wish.

Verizon won enough licenses to cover every state but Alaska and said it was very pleased with the results.

Google posted a bid for the C block licenses early, assuring that the open-access provision would be put in place, but the offer was not enough.

The third leading bidder was Qualcomm Inc., which pledged $1 billion.

A section of airwaves dedicated for a nationwide emergency communications network failed to attract a winning bidder. Martin said yesterday he had ordered an investigation into the circumstances surrounding the matter.

Public interest groups asked the agency to investigate allegations about a meeting between Frontline Wireless and its financial backers and a company called Cyren Call, created by Nextel Corp. cofounder Morgan O'Brien.

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