YOU ARE AT:Archived ArticlesGO ECHOES NEXTWAVE SUSPICIONS THAT SOME BIDDERS ARE `FRONTS'

GO ECHOES NEXTWAVE SUSPICIONS THAT SOME BIDDERS ARE `FRONTS’

WASHINGTON-Another top bidder in the C-block broadband personal communications services auction has had enough with the possibility of dealing with “front” organizations and speculators participating in the high-priced spectrum sale.

GO Communications Corp. and its subsidiary, GO Telecommunications Corp., weighed in March 1 at the Federal Communications Commission in support of immediate action to curb any speculation that might be occurring in the PCS auction.

Following on NextWave Telecom Inc.’s Feb. 29 letter requesting clarification of commission policy regarding “front” organizations that secretly could be capitalizing some bidders, GO-which has been an aggressive C-block player-“agrees that the commission must act now before long-form review in order to preserve the integrity of the C-block auction. The possibility of post-auction litigation helps no one and hurts everyone, particularly consumers.”

Despite bidder suspicions that there were some less-than-serious contenders vying for top markets, it took three months for anyone to step forward with questions. “It takes an extreme situation for the FCC to take notice,” said GO counsel John Malloy. “Everyone was excited about the money that was being taken in every day. People now are starting to wonder if we will see the money.”

According to GO, there is the possibility that legitimate participants could begin bidding on second- or third-choice markets if they perceive that the prices of their first choices are being bid up by those who hope to obtain the most desirable markets at any cost. “The nature of this auction is such that distorted bidding on just one market can have a cascading impact on numerous competitors,” it wrote.

The companies suggested that three steps be taken immediately by the FCC:

1. That it use its subpoena power to gather “a simple summation of total assets of each bidder separated from other attributable assets as of Feb. 29, 1996. The commission should also explicitly require a disclosure of all loans, including specific amounts and their identified lenders. These figures can and should be submitted confidentially by each bidder via Exhibit E of the FCC’s electronic short-form submission system.” The commission then could compare assets with real parties of interest.

2. That it “investigate and deter potential fronts and speculators.”

3. That it immediately re-auction any defaulted licenses. The FCC also could award such licenses to the Number Two bidder.

NextWave Telecom further recommended that the FCC “obtain any information concerning the origins of any loans [including the originators and guarantors of such loans] or equity investments used to make upfront payments or to otherwise support an applicant’s bidding activities.”

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