WASHINGTON-The Federal Communications Commission plans to re-auction returned C-block licenses March 23. The announcement, made last Wednesday, means the FCC will not wait for various bankruptcy courts to determine the fate of C-block licenses held by firms in bankruptcy litigation but will go forward and reissue those licenses returned through its recent election process completed June 8.
The FCC will use the same eligibility rules used for the original C-block auction. All applicants qualifying as entrepreneurs under the FCC’s rules and all original C-block auction applicants whose applications were accepted for filing are eligible to participate in the re-auction. C-block licensees that surrendered their licenses pursuant to the disaggregation or amnesty with prepayment credit options are ineligible to reacquire their surrendered licenses by any means, including re-auction, until March 23, 2001. Entities in default are not permitted to participate in the re-auction.
The re-auction “brings us one step closer to the goal of getting returned C-block spectrum back into the marketplace,” FCC Chairman William Kennard said in a statement. Kennard also took the opportunity in the statement to appeal again for bankruptcy legislation that would “clarify that licenses to use the public airwaves are not private property that can be tied up in bankruptcy litigation. Competition is not advanced when entities are permitted to hoard licenses behind the shield of bankruptcy.”
The FCC has set a ceiling for the minimum opening bids at no more than 10 percent of the amount of the net high bid in the original auction. Additionally, upfront payments will be no higher than six cents per megahertz per population. Former defaulters participating in the re-auction will be required to pay upfront 50 percent more than other participants.
Businesses with no more than $40 million annual gross revenues will be eligible for a 15-percent bidding credit and businesses with no more than $15 million annual gross revenue will be eligible for a 25-percent bidding credit.
The C-block auction became a problem for the FCC two years ago when winners in the original auction pledged $10.2 billion for licenses to offer personal communications services. After the auction, some winners found it difficult to raise the necessary capital to pay for the licenses.
The Congressional Budget Office has estimated between $3 billion and $5 billion eventually will be paid for C-block licenses. So far, the FCC has collected $1 billion.