WASHINGTON -- The Federal Communications Commission opened the bidding yesterday for its long-awaited sell-off of wide portions of the radio spectrum for a new generation of wireless telephone services.
First-round results showed that bidders weren't swept up in the hoopla. Companies played a waiting game in all but a few hotly contested markets, bidding only $379.6 million in an auction that is expected to raise billions.
But if the participants were cautious, the cheerleaders were bold.
Brandishing a prototype of a Dick Tracy-style wrist phone, Vice President Al Gore mined the metaphor of a "new Gold Rush" and told the throng at the old post office building near Union Station that "we're bringing a revolution into being."
Representative Edward Markey, a Massachusetts Democrat who will soon surrender his chairmanship of the House telecommunications subcommittee, gushed that it was "the oil strike of the Information Age." Sen. Larry Pressler, the South Dakota Republican who will be chairman of the Commerce Committee, said "the crackling, pulsating radio spectrum" would provide "a liberating technology" that will transform the United States as thoroughly as the wired telephone network.
But no speaker could outdo FCC Commissioner James Quello, who proclaimed the auction "the most momentous thing in the history of government."
Washington officials might have gone a tad overboard yesterday, but there's no question that the auction is a big deal. It's the fourth in a series of FCC spectrum auctions, but the others were mere preliminary bouts to yesterday's main event.
On the block were 99 of the 102 "personal communications services" (PCS) licenses the FCC will award to companies that are vying to create a new alternative to conventional cellular service.
Two of the permits, called broadband licenses because each represents a hefty 30-megahertz chunk of the radio spectrum, will be sold off in each of 48 regions of the United States and its possessions. In three markets, including Baltimore-Washington, only one license is up for grabs.
The returns from the first round of bidding flowed in late yesterday afternoon, but FCC officials warned that they are about as reliable as the early presidential returns from Dixville Notch, N.H.
Several large markets, including Minneapolis, Cincinnati and Milwaukee, received no bids for either license as companies waited for rivals to show their hands. In the Baltimore-Washington area, which is expected to be hotly contested, AT&T; led with a relatively puny bid of $10 million for the single license.
In other markets, determined competitors jumped out front with don't-mess-with-me bids such as GTE Corp.'s $50 million for the sole New York license.
The bidding is conducted entirely by computer. Off the main room are 20 tiny chambers where bidders can go to execute their strategies in soundproof privacy. But only a few of the rooms were in use yesterday as most of the 30 contestants chose to bid from off-site locations.
Paul Milgrom, a Stanford University economics professor who is advising Pacific Telesis Mobile Services, attended in person, although most of the company's bidding team was back home in California.
Mr. Milgrom is one of a small band of specialists called game theorists, who have been much in demand as consultants to spectrum-hungry bidders. Like others of his profession, Mr. Milgrom has spent months war-gaming the auctions, creating "stress scenarios" and devising strategies in CIA-like secrecy.
"We expect to win our licenses -- at least in California," he said, claiming a "natural advantage" in building out the infrastructure of a PCS system there.
Backing up its bravado, Pac Tel came out strong with high bids of $38.3 million for Southern California's sole license and $23.8 million for one of the two Northern California licenses.
Among the bidders employing a lie-in-the-weeds strategy was Lynnea Byland Dalton, president of South Seas Satellite Communications Corp., which is vying for one of the two licenses for American Samoa with the help of its own game theorists.
"Our team decided to open with a $6 bid," she said.
As it turned out, South Seas' bid was swamped by bids of $10,000 and $30,000 from its archrivals, Windsong Communications Inc. and Data Link One Inc.
But Ms. Dalton's husband, Marcus Dalton, was confident.
"We let them know indirectly that we will stop at nothing to get this license," he said.