Is The US Sale Of Wireless Airwave Capacity In Danger?

While they had expected to raise in excess of $10 billion only a matter of weeks ago, there are now grave concerns that the forthcoming sale of US airwave capacity (by the US authorities) to the wireless sector is coming under increasing financial pressure. It is the capacity which has be returned by the TV companies as they move to digital which is up for sale, but can anyone afford the big bucks which had been forecast?

We have heard rumours that Google were going to bid, then they dropped out, then they were back in but the truth is that nobody knows. The ongoing credit crunch has made many companies think twice about where to target their investment funding and the immediate returns which they can expect. The purchase of capacity for wireless technology is a great investment, but it is an investment for the future, an investment which will not yield significant returns in the short term. So what will happen?

The US sale is set to go ahead on the 24 January and because of the fact that a law was passed in Congress there is no scope to delay or cancel the auction – it will go ahead. So what can the US authorities really expect?

While the traditional sabre rattling ahead of this auction is a little different there are companies like Google who have funding available for future investment, and there are companies out there who cannot afford to miss out. However, that said the US authorities may well need to reduce their targets a little in the current economic environment or perhaps offer some kind of concession on payment terms.

There is no doubt that the sale will go ahead and there will be bidders, but it looks as though it may well be the big players who will benefit from a potential lack of competitive bidding. It is the influence of these players whom the authorities were looking to dilute as new companies entered the market, but this seems something of a forlorn hope at this moment in time – it will no doubt be business as usual for the large corporates who dominate the sector.