YOU ARE AT:Archived ArticlesAUCTION PLAYERS PREPARE TO JUMP BACK INTO BIDDING WAR THIS WEEK

AUCTION PLAYERS PREPARE TO JUMP BACK INTO BIDDING WAR THIS WEEK

WASHINGTON-Participants in the Federal Communications Commission’s spectrum auctions are taking the next few days to gear up for Jan. 5, when the bidding for C-block broadband personal communications services and 900 MHz specialized mobile radio licenses resumes. Bidders ended the year by pledging about $166.8 million to the 900 MHz auction and $1.2 billion to the C-block PCS auction.

Following a two-week hiatus that began Dec. 22, bidders will enter at Round 14 of the 900 MHz auction and Round 5 of the C-block PCS sale. Top 900 MHz bidders returning to the fray include Paging Network of America Inc., with $13.1 million in net high bids; Geotek Communications Inc., bidding $10.7 million; FCI 900 Inc. (Nextel Communications Inc.), bidding $10.3 million to date; Motorola SMR Inc., at $2.8 million and A&B Electronics (Pittencrief Communications Inc.) at $2.3 million. Of the original 128 bidders, 111 remain.

The commission has made no decision regarding moving from one round of 900 MHz SMR bidding per day to two, even though the number of new bids and of new high bids per round had dropped to less than 100.

On the PCS side, Puerto Rico-based PCS 2000 LP leads the pack with $442.6 million in net high bids, followed by GWI PCS Inc., with $257.2 million; NextWave Personal Communications Inc., at $162.1 million; DCR PCS Inc., bidding $70.3 million and AirLink LLC, which has bid $25.6 million. Bidders are gearing up for a two-round-per-day schedule that could begin next week.

So far, only one player may be hit with a penalty for pulling a bid following the close of a round. College Park, Ga.-based Atlanta Trunking Associates, which tendered a $125 million bid for Atlanta’s Block P 900 MHz license in Round 9, withdrew that bid in Round 10, claiming that it had added three extra zeros to its electronic bid by mistake; it then resubmitted a $125,000 bid, eclipsing one placed by Nextel for the channels. Under FCC rules, Atlanta Trucking could be liable for a penalty equaling the difference between its initial bid for Block P and the actual amount the FCC gets for the channels by the time the auction ends-a possible multimillion-dollar assessment. Atlanta Trucking has filed a petition for exemption from such a penalty with the commission, which will wait until the auction is over before it makes a decision. Phone calls to the bidder were not returned.

At this point, many PCS concerns still are cautious to discuss their strategies, saying that they will be more willing to talk about direction as the auction progresses; bidding could continue for at least another six weeks.

Smaller players-including many established wireless players who have not been exposed to a bidding scenario-have called the auction “a bozo operation” technically, and they have been unpleasantly surprised at the actual amount-vs. the projected amount-of real money that is required to stay in the game for rights to a particular market. According to bidder Fred Guin of FCCA LLC, what started out to be a 2-cents-per-pop proposition has turned into a 60-cents-plus-per-pop venture*…*so far. Guin paid $1 million in C-block upfront fees.

Guin also is bidding in the 900 MHz auctions, which he finds much easier to navigate. His partnership is concentrating on the East Coast for the SMR channels (“I’m just a Carolina boy,” he says), even though its reach is much farther for PCS.

Designated entity NextWave Personal Communications Inc. is touting the fact that it now is eligible to bid on PCS licenses that cover more than 176 million pops, due in part to its aggressive bidding strategy and to its large upfront payment of $79 million. Other players have had to reduce their eligibility because of slower bidding patterns.

NextWave already is looking at the next rounds of PCS auctions-the D, E and F blocks-just in case it has to fill in its footprint after the C-block dust has settled.

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