THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, March 14, 1995 TAG: 9503140276
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
DATELINE: WASHINGTON LENGTH: Short : 49 lines
A three-month contest over the rights to provide the next generation of mobile phone service ended Monday, with a total of $7.03 billion - or $98 for every household in America - being pledged by 19 companies.
The companies bought 10-year licenses to provide a new phone service that promises to be more flexible and less costly than existing cellular.
A consortium of Sprint and three big cable companies - Tele-Communications Inc., Comcast Corp. and Cox Cable Communications - emerged as the auction's biggest spender.
They pledged $2.1 billion for 29 of the 99 licenses sold by the Federal Communications Commission, snagging the nation's most populated market - New York - as well as licenses in San Francisco and Dallas.
AT&T was the second most aggressive bidder, plunking down $1.7 billion for 21 licenses.
And, a consortium of the cellular companies of Nynex, Bell Atlantic, US West and AirTouch put up $1.1 billion for 11 licenses.
The winning bidder for the two licenses in the Richmond-Norfolk territory were AT&T, which bid $33.7 million, and Bell Atlantic and its partners, which together bid $33 million.
``The winners bought an opportunity to be telephone companies of the 21st century,'' FCC Chairman Reed Hundt said. ``You're going to see these companies fight tooth and nail and prices go way, way down.''
So low, said Hundt, that the new mobile phone providers will eventually be able to provide local calls at the same rate or lower than local telephone companies.
About 20 million people now use cellular phones and their bills average $58.65 a month, according to the Cellular Telecommunications Industry Association.
The new mobile phone service is expected to fuel cellular growth to 100 million people within 10 years. Many existing cellular companies are improving service to prepare for the onslaught of new mobile phone providers.
Through their license acquisitions, the Sprint alliance will have a potential customer base in the new business of 145 million people; AT&T, 107 million, and the Nynex cellular consortium, 57 million, Hundt said.
The licenses permit companies to serve specific geographic areas and operate on specific slices of the public's airwaves.
The auction began Dec. 5 with 30 companies competing for the licenses. by CNB