The beep you heard last week was the sound of the cash register at the Federal Communications Commission as it rang up the bids in the first-ever bidding war for a piece of the nation’s airwaves.
By the time it was over, six companies that bid $617 million ended up with 10 national licenses to offer two-way paging and other advanced communications services. It’s more than 10 times the amount analysts had estimated companies would bid.
In another auction down the street of a different piece of the spectrum, the FCC raked in $167 million selling two licenses for Interactive Video and Data Services in 150 towns in the East.
The FCC isn’t through. Later this summer the commission plans to auction at least three more cellular telephone systems to each metropolitan market. It’s an auction that analysts had predicted would generate about $12.6 billion. But those estimates now have been tossed out the window in light of the huge numbers bid last week for the licenses.
So what’s Uncle Sam going to do with all its unexpected money? One thing’s certain: It’s not going to declare a moratorium on taxes. Instead the money is headed straight for the Treasury to offset spending and reduce the need for borrowing.
If the government’s not careful, it might push the anticipated deficit in this year’s budget below $200 billion.
