FCC: Economy Could Dampen Wireless Sale

In credit crunch, smaller bidders face capital shortage
By Jane Yager,  Newser Staff
Posted Jan 18, 2008 10:24 AM CST
Federal Communications Commission (FCC) Chairman Kevin Martin, left, accompanied by commissioner Michael J. Copps, testifies on Capitol Hill in Washington in this Feb. 1, 2007 file photo. (AP Photo/Manuel...   (Associated Press)
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(Newser) – FCC head Kevin Martin registered concern this week about the impact of the credit crunch on the government auction of wireless airwaves scheduled to begin Jan. 24, Reuters reports. The auction, which Congress has ordered to go forward, comes at a time when the meltdown of housing and subprime mortgage markets has battered the ability of companies to raise capital.

Amid such pressure, key bidder Frontline Wireless dropped out of the auction last week. The crunch affects smaller bidders more than it does major carriers such as AT&T and Verizon, which have other ways of raising money. Observers view the auction of valuable 700-megahertz signals as the last chance for new players to enter the wireless market.