Broadband fixed wireless auction: nil bids

Two weeks into the auction process, not a single bid has been received for the broadband fixed wireless licences left over from last year's debacle
Written by Graeme Wearden, Contributor

The government's latest attempt to persuade telecoms companies to buy a broadband fixed wireless licence has been running for two weeks -- and so far it has not attracted a single bid, ZDNet UK can reveal.

Broadband fixed wireless is considered to be a potentially good way of offering high-speed Internet access to people who live in rural or remote parts of the UK -- where ADSL and cable networks are unlikely to arrive in the near future. Around 30 percent of the UK population don't live within an ADSL-enabled area.

Licence-holders will operate a radio base station on a central building transmitting within the 28GHz frequency, communicating with nearby subscribers whose equipment will be attached to the side of their house.

Firms have been able to make an offer for any of the 26 available licences since 15th October. The last licence ended in failure after just 10 days, when over half of the licences attracted no interest at all. Given the disappointing take-up of broadband services to date, many within the industry were hoping that the licences would be snapped up quickly.

The Department of Trade and Industry insists that the lack of interest isn't a matter for concern. "We've not had any bids yet, but we're only at the start of a 12-month bidding window," a spokesman said.

While companies do indeed have until mid-October 2002 to bid, it would be very disappointing if the licences weren't awarded until then. A company bidding today could be the owner of the licence within 20 working days if no other firm placed a rival bid.

After the last auction, which took place in November 2000, the DTI held discussions with industry figures in an attempt to find the best way of allocating the remaining licences. "We launched this new auction after we received strong signals from the industry that they would be keen to participate in the process," explained the DTI spokesman.

It is understood that the government does not expect to receive much more than the reserve price for the licences. Reserve prices are set at £1m or £2m, depending on the region.

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