WASHINGTON-The auction of Phase II 220 MHz licenses is scheduled to begin May 19, but that date could be pushed back at least 30 days because no bidder’s package has been released and the Federal Communications Commission still has not resolved past issues regarding the service.
Kathleen O’Brien Ham, chief of the FCC’s auction division, told RCR the FCC had made no official decision at press time to move the start date of the specialized mobile radio auction, and that staffers were putting together the bidder’s packages with the May 19 date in mind. However, issues stemming from pending petitions for reconsideration of previous 200 MHz orders could delay bidding.
Form 175s are due April 20, and auction deposits must be made by May 4. Deposits will depend on the minimum bids put forth by the FCC on each of the 908 licenses up for grabs. Three nationwide licenses (100 kilohertz paired), 30 geographic economic area licenses (150 kilohertz paired) and 875 EA licenses (100 kilohertz paired) are being offered, suitable for voice, data, paging and fixed communications. Much of the spectrum is, however, encumbered, and potential bidders must take relocation costs into account.
Mike Bayly, land mobile marketing director for Midland LMR in Kansas City, said while FCC officials at last week’s American Mobile Telecommunications Association management seminar in New Orleans agreed with Ham that no auction-extension decision is imminent, “Odds are there will be a delay. We just don’t know for how long yet.”
Midland, which manufactures the Securicor line of 220 MHz equipment, has been conducting an intensive direct-mail and advertising campaign designed to get players interested in the auction, Bayly said, and it even will help find capital sources, if need be. “This auction is absolutely ideal for giving people the means to compete with other technologies in the market at an affordable price,” he added. Close to 250 responses have been received thus far, with most coming from private radio dealers and operators. Bayly acknowledged that incumbents probably will be the biggest bidders in larger markets, just to protect their territories, but that many opportunities exist in the lesser-served rural areas.
Because of the incumbent Phase I licensees, this auction could be lightly attended, said Albert Koenigsberg, president of the Fort Lauderdale-based SMR Advisory Group L.C. “If people don’t have the proper information (regarding relocation), they will be wasting their money,” he said. “There should only be incumbents in this auction.”
David Thompson, president of SEA in Mountlake Terrace, Wash., and both a 220 MHz equipment manufacturer and system owner, plans to participate in this auction. “We’re looking forward to the auction,” he said. “220 MHz is becoming recognized as a viable, low-cost, trunked voice/dispatch option.”
Incumbent operators won’t be much of a problem, he said, because out of a possible universe of 55,000 sites nationwide, only 900 have been built out, mostly in the larger markets.
“The big picture is reasonably good,” he said. “The 220 MHz radio service has been kept under wraps because of regulatory issues, but there is an awareness of the need for low-cost voice dispatch applications.” Now that much of the 800 MHz SMR service is “turning into cellular,” Thompson said, there could be a good turnout for the auction.
The FCC tentatively has thrown out the figure of $2,500 per market as a minimum bid, and Thompson has no problem with that. “$2,500 for an EA of 10 channels is only $250 per channel,” he said. “If the frequency reuse pattern is 50 percent, you’re really getting 15 channels for that.”
Midland’s Bayly thinks that the minimum bids are the commission’s backlash following the high-profile C-block personal communications services problems. “They are just being so blinded by the C-block, and this could discourage small businesses from getting into wireless at a reasonable cost,” he said. “This is the first auction in which small businesses really could participate. The rules just don’t encourage small businesses, what with no installment payments and click-box bidding. All strategies are mechanical now.”
