More air goes under the hammer

For high-speed net access look to the skies

By BBC News Online internet reporter Mark Ward

The UK government has revealed which companies will be bidding for a licences to provide high speed wireless services to homes.

The Department of Trade and Industry said 12 companies were planning to take part in the auction. The process is due to start in October.

Successful bidders will get the right to supply homes with radio-based high-speed phone and internet services, replacing copper-wire landlines.

The sale is expected to raise up to £2bn for the government.

The auction is being run slightly differently to the one held earlier in the year which netted the Government over £22bn.

Auction entrants

Atlas Communications

Broadnet

Chorus Communication

Energis Local Access

Faultbasic

FirstMark Communications

Formus Communications

Norweb Telecom

Orange Personal Communications Services

Priority Wireless

Templeco 489

Winstar Communications

Instead of selling licences that cover the nation, the Government has divided the UK into 14 regions covering England, Scotland, Wales and Northern Ireland. Three licences are being offered in each region.

Reserve prices for the licences range from £4m for the right to offer services around London to £100,000 in Northern Ireland.

Companies are limited to bidding for one licence per region, but they can bid in as many regions as they want. Each licence lasts for 15 years.

Initially the Government is selling off licences covering the 28Ghz part of the spectrum. Later it is due to hold another auction to sell off licences to offer the same services but over a different, 42Ghz, radio band.

Successful bidders are expected to make a relatively swift return on their investment by cashing in on the demand for high-speed internet access.

Confusingly the technology those companies are getting the right to use, is known as "fixed wireless". The name reflects the fact that radio links are used to connect homes to a traditional fibre-optic backbone.

Many of the companies bidding claim they will give people access to the internet at speeds of up to 2 megabits per second.

By comparison the high-speed internet access BT is starting to roll out only runs at 512 kilobits per second.

The cost of setting up the infrastructure to support these wireless services is likely to be lower than those for equivalent high-speed services because no cables have to be laid out to homes.

However two companies, Ionica and Scottish Power, have already tried and failed to make a flourishing business out of offering wireless access to consumers.

Ionica shut up shop when it failed to find backers willing to fund for more development.

In July last year Scottish Power shut down its wireless service and asked its 6000 customers to consider a traditional fixed line service.