WASHINGTON-By the end of nearly three weeks of bidding, action has all but stopped on the major markets left in the re-auction of personal communications services licenses.
The only major market to receive any activity as of the end of round 42 was Little Rock, Ark. The high bid for Little Rock is currently $4.9 million by Leap Wireless International Inc. Leap beat out Omnipoint’s entity, OPCS Three L.L.C. which bid $4.1 million at the end of round 41.
Leap, which is a spinoff of Qualcomm Inc., is participating in the auction believing the Federal Communications Commission will rule that it is not too big for the small company licenses it is bidding on. While Leap would not comment on its bidding strategy, Leap Senior Vice President Dan Pegg said “we are basing our activities on our belief that we fully comply with the criteria … there’s only one shot at the auction so we thought it was reasonable for us to” participate.
Cook Inlet/Voice Stream PCS, backed by Western Wireless Corp., remains the entity with the most money on the table, placing 28 high bids totalling $192 million. ABC Wireless L.L.C., which reportedly has an agreement with AT&T Wireless, remains the most active participant in the auction making 64 high bids totalling $30 million.
There are 50 licenses that have yet to receive any activity. That does not mean that all of the other markets are still desired by participants. There are 28 licenses that have not received any bids since the first round.
The bids in this auction are significantly less than the original auctions of 1996. For example, the original price per pop for Hartford, Conn., was $45.67, but ConnectBid L.L.C. only bid $1.71 per pop. ConnectBid has been associated with wireless magnate Craig McCaw.
The most prized markets in the auction, Chicago and Dallas, have apparently been won by Cook Inlet for $14.41 per pop. These licenses were originally won by Pocket Communications, Inc. subsidiary DCR PCS, Inc. but were returned to the FCC as part of its bankruptcy litigation. Operators of Global System for Mobile communications PCS technology were anxious to win the two markets-both with major airports-to fill out holes in the GSM network. Cook Inlet had been one of the players attempting to obtain the licenses through the Pocket bankruptcy process before DCR returned them to the FCC.
In other Pocket related activity, the FCC last week released a 4-1 decision denying Gloria Borland/Hawaii PCS’s claim to the two former Pocket Hawaii licenses. Gloria Borland/Hawaii PCS owned five percent of the licenses for Honolulu and Hilo, Hawaii, and for this reason claims these licenses should not have been given back to the FCC as part of the DCR/Pocket election.
The decision had been made by the FCC on March 24 to reject Borland’s claims but was not released until April 5. “It’s not uncommon for [FCC] items to be released several days after they are adopted. When an item is adopted with edits it often takes several days for the editing process to be completed. There was nothing unusual about the small delay between adoption and release of this item,” said Meribeth McCarrick, a spokeswoman for the FCC’s Wireless Telecommunications Bureau.
The licenses became noteworthy when several members of the Hawaii congressional delegation urged the FCC to make a decision on the Gloria Borland/Hawaii PCS claims before the auction commenced. FCC Commissioner Harold Furchtgott-Roth noted the interest in his dissent.
“I dissent from this action in protest of the process that led to this decision … Several members of Congress justifiably became alarmed when there was no resolution of the dispute even a few weeks before the scheduled re-auction … We were presented a draft decision, this morning, mere minutes before the re-auction began, and we probably will not issue the decision until sometime tomorrow, well after the re-auction is underway,” Furchtgott-Roth said.
Gloria Borland/Hawaii PCS expects to file an appeal of the denial within a few weeks, said Gloria Borland. “Of course I am disappointed with the FCC decision, but I am confident that we will prevail,” Borland said.
It is unclear what will happen to the Hawaii licenses if the D.C. Court of Appeals rules in favor of Gloria Borland. At the end of round 42, the Hilo, Hawaii, license had been won by ABC Wireless for $180,564 and Honolulu by American Wireless L.L.C. for $3.7 million.
