• Wall Street Journal, Thursday, December 27, 2007 11:15 AM

Microsoft co-founder Paul Allen is one of many competitors Google faces in its quest to win a portion of the 700 MHz spectrum that goes up for auction next month. His holding firm, Vulcan Spectrum LLC, stated its intention to bid at the Jan. 24 auction in a filing with the Federal Communications Commission last week. Vulcan already owns twenty-four 700 MHz licenses acquired through an FCC auction in 2003; these are based entirely in Washington and Oregon. The question now is what Allen plans to do with his spectrum holdings.

Analyst Tim Sanders believes Vulcan is holding onto the airwaves for cable operator Charter Communications, another company in which Allen has a controlling stake. He says Vulcan, a private holding company, would save Charter money on taxes and reduce the amount of public information about what it plans to do with the spectrum. "There are tons of spectrum in the U.S. just sitting there waiting for somebody to do something with it," Sanders told The Wall Street Journal. "In the cellular frequencies, it is very well utilized and nearing capacity, but in other spectrum ranges it is barely deployed."

This raises the prospect of video broadcasting--an area into which telecom giant Qualcomm, another bidder in the upcoming auction, is devoting considerable resources. Or, the Journal says, Vulcan could simply be hoarding away spectrum with the hope of selling it for a profit.

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