Wave Issue 0104 1/19/01 Article 5-03

***U.S. Wireless Auction Reaches $16.7 Billion
(January 18)

According to Total Telecom, after 61 rounds the U.S. wireless
auction has reached $16.7 billion. Only 38 bidders remain out of
the original 87 companies, which were vying for licenses to help
them fill gaps in their wireless networks, improve service in
congested markets, and launch products like wireless data and
Internet services.

The auction features 422 repossessed or previously unsold
licenses in 195 markets. Most of these licenses cover small
cities or rural areas.

The Federal Communications Commission held six rounds of bidding
on Wednesday, January 17th, up from four rounds in recent days,
in an effort to hasten the conclusion. Only 16 new bids were
placed in the last round on Wednesday, about half the amount
placed in Tuesday's last round.

Verizon Wireless has held its lead with bids of $8.75 billion,
and had the highest offers for nine of the 15 top markets,
including New York, Los Angeles and Chicago, according the U.S.
Federal Communications Commission. Verizon has been closely
competing against AT&T's bidding affiliate, Alaska Native
Wireless, and Cingular Wireless for three licenses covering New
York City. Cingular is a joint venture of BellSouth and SBC
Communications.

Verizon Wireless had been expected to bid only about $4 billion
to boost capacity in markets where it had limited capacity. It
has more than doubled those predictions. The company has said its
parent companies, Verizon Communications and Britain's Vodafone
Group, would provide any necessary financing to cover the costs
of licenses until it raises funds through an initial public
offering.

Overall, industry analysts expect the auction to raise up to $20
billion in bids. The offers have already topped some cautious
predictions of $11 billion, but have fallen short of some
optimistic forecasts of $30 billion set last fall.

So far, the auction has reaped about $4 per megahertz per
potential customer - a key barometer for the industry - compared
with initial forecasts of about $6. Auctions in Germany and
Britain last year fetched an average of $4.4.

Bids for New York and Atlanta have soared to $10 per megahertz
per potential customer, making them the most expensive markets.

For large markets of more than 2.5 potential customers, the
average bid hovered around $5, compared with $3 for mid-sized
markets, and about $1.60 for markets with less than 1 million
potential customers, Salomon Smith Barney said in a research
report.

The auction has been the most lucrative sale of airwaves ever
conducted by the Federal Communications Commission. It already
topped the previous record of $9.2 billion for the 1996 sale of
PCS licenses.