FCC Sells Air

Aug. 9 — -- The federal government began auctioning off one of the country's most valuable natural resources on Wednesday, and the bidding's gone high.

But none of what was auctioned can even be seen by the companies purchasing it, some of which have spent hundreds of millions of dollars for the privilege.

The Federal Communications Commission is selling licenses to use parts of the radio spectrum -- an extremely valuable pipeline for all kinds of communication -- to the highest bidders. Radio and television stations and cell phone providers all use pieces of the radio spectrum, and today's auction will make more of it available to them.

More available spectrum, also called bandwidth, means that companies that provide wireless services, such as cell phones, can offer more features than simple telephone service.

"If you've got a wider street, traffic can go more quickly," said Marina Amoroso, an analyst who studies wireless services at the Yankee Group.

The money that the government makes from the sale of the licenses will go directly into the federal treasury. The Congressional Budget Office estimates that the revenue from the auction -- which could go on for weeks -- could be around $15 billion.

Bidders in the auction include cell phone and cable and satellite television companies, all of them wanting to possess a piece of a valuable way to transmit video, music and data to consumers. With an easy and fast way to distribute content, new technologies can develop to receive that content.

"It may not change the cell phone in your pocket," said Rob Enderle, an emerging technologies analyst. "But it could make a difference in regards to what you carry in your pocket at some future date."

More bandwidth will allow personal entertainment to become an important part of wireless service plans. Advanced services, such as downloading movies into a cell phone, are difficult to provide with the current available bandwidth.