updated 11:05 am EDT, Fri March 21, 2008
ATT 700MHz Costs
AT&T's gains for wireless space in the FCC 700MHz auction will cost it enough to require a major downpayment, according to a filing by the cellular carrier. The company explains that its new space will demand a $1.3 billion down payment within the next ten days and that it will need to take on a debt load of $5.3 billion to pay for the remaining amount. The figures make up a significant portion of the overall auction, which resulted in a reportedly record-setting $18.9 billion in net bids spread across a mix of large telecoms companies as well as regional businesses.
Most of AT&T's successful bids were in the "B" block of the 700MHz spectrum and covered regional licenses rather than the national license obtained by Verizon for the competitive "C" block. AT&T has responded to its results by declaring itself pleased with the auction, which still gives it 95 percent coverage of the US population.
Both AT&T and Verizon are believed to be obtaining the rights to use the frequency spectrum for the sake of future 4G Internet networks, which would use the relatively low frequency to offer faster speeds at longer ranges and with better signal quality indoors. Unlike Verizon, AT&T is not subject to the open access conditions for the "C" block and can optionally lock out competing devices or software on a future service.
AT&T has typically sold devices locked to its network and restricted software, but also allows unlocked GSM devices to run on its network and is believed to have relinquished most control over what users can install to the iPhone.