Foreign investors eye U.S. spectrum with help of former FCC chairman Powell

The spectrum now used for analog broadcasting could end up in foreign hands.

The spectrum now used for analog broadcasting may now be owned by the American public, but — as a result of next year’s FCC auction — it could end up in foreign hands.

The high-profile auction of what’s considered the last major block of premium U.S. spectrum has drawn the attention of global investors who could form partnerships for bidding with such companies as Google. Confirmation of interest by four Asian investors was reported by both “Businessweek” and the “Wall Street Journal.”

NTT DoCoMo USA, is a little-known subsidiary of Japan’s largest wireless company based in Manhattan. Its mission, according to “Businessweek,” is to look for new business opportunities. Partnering with another company in the spectrum auction might be one of them.

DoCoMo, a pioneer in advanced wireless services, last March set up a pavilion for the first time at the biggest U.S. wireless industry show and formed a U.S. advisory board headed by Michael Powell, the former FCC chairman and a senior adviser at Providence Equity Partners. In July, DoCoMo agreed to provide up to $24 million in funding for a high-speed wireless network AT&T is building in Hawaii, “Businessweek” reported.

KDDI, another Japanese carrier, is already testing a cutting-edge wireless service in the Northeast, the magazine reported. Elsewhere, Korea’s SK Telecom recently boosted its ownership in Helio, a youth-oriented service, by pledging up to $270 million in extra funding. In November, it bid unsuccessfully with Providence Equity Partners for a $5 billion slice of the troubled carrier Sprint Nextel, according to the “Wall Street Journal.”

Chinese companies and investors, “Businessweek” said, are also said to be eyeing the U.S. wireless market. The report said that it’s notable that, in May, the Chinese government acquired a $3 billion stake in the Blackstone Group, a private equity firm that has invested in wireless businesses including U.S. tower operator Global Tower Partners and Germany’s Deutsche Telecom (DT), parent of T-Mobile.

“Businessweek” said prospective influx of Eastern cash could kick off one of the biggest foreign investment waves in the U.S. wireless industry since DT’s acquisition of VoiceStream in 2001, DoCoMo’s investment in AT&T Wireless in 2000, and Vodafone’s (VOD) 1999 purchase of AirTouch (later merged into what is now Verizon Wireless).