February 6, 2006

Bush Administration Sees $25 bln in Wireless Sales

By Jeremy Pelofsky

WASHINGTON -- The sale of U.S. wireless communications licenses are projected to raise about $25 billion between 2007 and 2009, $7.8 billion higher than last year's estimate, according President George W. Bush's 2007 budget released on Monday.

The Federal Communications Commission is slated to start selling 90 megahertz of wireless airwaves on June 29, an auction that Wall Street analysts have said could raise as much as $15 billion.

Those airwaves are expected to be used for advanced mobile communications like high-speed Internet and video services. Major U.S. wireless carriers like T-Mobile and Verizon Wireless are expected to bid in the sale.

The Bush budget estimated that $9.95 billion from wireless auctions would be received in the 2007 fiscal year, which starts October 1, 2006. It also expects almost $12.24 billion in the 2008 fiscal year that starts October 1, 2007.

Additionally the budget projects $2.87 billion being received in the 2009 fiscal year. Bush's budget last year had estimated wireless auctions would bring in $17.2 billion between fiscal years 2007 and 2009.

Auctions can last weeks depending on the bidding strategies of wireless carriers, which often bid to acquire airwaves so they can expand and improve services.

The FCC is also expected to start selling by early 2008 wireless airwaves that television broadcasters are giving up as they move to other frequencies for their higher-quality digital broadcasts. That move is slated to be done by February 17, 2009.

Congress last year ordered the FCC to start that sale by January 28, 2008. Additionally, the law designated almost $7.4 billion in proceeds from that sale to be used to help reduce the federal deficit.

Another $1.5 billion is set aside to help consumers buy converter boxes so their existing analog television sets do not go dark.

Another $1 billion from the proceeds was allocated to a grant program that would help public safety agencies acquire new interoperable communications equipment so they can better coordinate rescue and emergency responses.

T-Mobile is owned by Germany's Deutsche Telekom AG and Verizon Wireless is a joint venture of Verizon Communications and Vodafone Group.