Now that the Federal Communications Commission has completed the re-auction of 365 C-, D-, E- and F-block personal communications services licenses, it still could be months or even years before service in many of the markets is deployed.
All the winners had met their payment obligations as of June 11, at which time the commission issued a Ready to Grant public notice requiring licensees to make their final payment by June 25, according to an FCC source. Licensees who fail to make the payment by Friday will be given 10 business days to make a late payment plus a late fee equal to 5 percent of the amount due.
One of the biggest winners in the auction, however, still must receive further FCC approval before it can begin building out its footprint. Leap Wireless International Inc., a spinoff of Qualcomm Inc., is awaiting a ruling from the FCC approving its status as a designated-entity bidder.
“The answer is still in the hands of the FCC,” said Dan Pegg, senior vice president of public affairs at Leap, when asked how soon the company plans to begin building out its markets. Leap won 36 markets at auction, including Salt Lake City and Little Rock, Ark.
While it waits for the FCC’s decision, Leap is studying the markets it won and is talking with infrastructure vendors and potential employees. The company’s marketing strategy is to offer an alternative to traditional local telephone service by allowing customers unlimited minutes of use in a particular area for a low monthly fee. The company already has launched service in Chattanooga, Tenn., through its interest in Chase Telecommunications Holdings Inc.
“We do not look at the current wireless providers as our competition,” said Pegg, who estimated Leap could have between 10 and 20 markets operating next year.
Cook Inlet/VoiceStream PCS, which is backed by Western Wireless Corp., was another prominent winner at the auction. The company won 28 markets during the auction, including Chicago and Dallas, filling in some holes in the U.S. Global System for Mobile communications network.
James J. Healy, president of Cook Inlet/VoiceStream, said the company isn’t revealing much about its buildout plans, although he estimated a large market like Chicago or Dallas could take about 18 months to complete.
Healy said he expects the company will follow the business plan already being used by VoiceStream, and the company will focus on doing a good job at the basics in order to make up for not being early to market. Healy also said he expects roaming traffic, both domestic and international, to provide a measurable source of revenue for the company, particularly given the international traffic that flows through Chicago’s O’Hare International Airport.
Meanwhile, two of the largest winners in the original C-block auction have received favorable rulings in their efforts to get their bid obligations reduced, although the FCC is appealing those decisions.
General Wireless Inc., recently renamed Metro PCS, is working on its business plan and searching for financing. The company said it plans to offer service similar to Leap’s flat-rate unlimited calling service.
NextWave Personal Communications Inc. is saying little about its plans, although it maintains it will pursue its original resale strategy.
