Frontline folds, may bow out of 700MHz auction

Less than a month before the U.S. Federal Communications Commission (FCC) opens the 700MHz auction, one of the serious bidders, startup Frontline Wireless, has temporarily closed.

This is according to a Reuters report, which cited Reed Hundt, Frontline vice chairman, as saying that the company has "closed at this time." A former FCC chairman, Hundt declined to elaborate whether the company is withdrawing from the spectrum auction.

Analysts at Stifel Nicolaus, however, said in a research note that the wireless startup would not join in the auction because it had failed to make the down payment needed to participate.

Frontline has proposed to build a national network with one of several blocks of wireless spectrum that would allow some commercial uses, but was subject to an FCC requirement to share it with public safety agencies.

According to Stifel Nicolaus, the cost of obtaining the public safety block could be reduced if Frontline were to back out of the auction. The situation will also lessen the wireless broadband competition, a good news for AT&T and Verizon Wireless.