WASHINGTON-The sale of 128 Wireless Communications Services licenses ended early Friday morning after a total of 29 rounds. The final four rounds contained no new bids, no new high bids and a spate of waivers. In this first auction of flexible-use spectrum, the Federal Communications Commission took a beating, revenues-wise, garnering only $13.6 million-a far cry from the original figure of nearly $3 billion and only a bit more than 10 percent of the slimmed down Congressional Budget Office projection of $1.8 billion.
There were markets that went cheap. Two licenses in Milwaukee were bid at $1, as were two in Minneapolis, one in Des Moines, one in St. Louis and one in Omaha. One San Francisco license was bid at $6.
Wireless Telecommunications Bureau Chief Dan Phythyon has attributed this lower-than-expected figure to the short time frame that was allotted for the auction and to the fact that all monies must be gathered by Sept. 30.
Waivers were the only thing keeping the auction going. There were no new bids and no new high bids placed in rounds 26 through 29; instead, CFW Communications Co. and Telecorp Management Corp. Inc. used their waivers to keep the auction alive. All markets had shaken out by Round 24, except for Jacksonville, Fla., which was taken from Telecorp by BellSouth Wireless Cable Inc.; instead of topping the bid and taking the market back, Telecorp elected to use its bidding waivers. As of Round 29 last Friday morning, CFW had only two waivers left, pointing, perhaps, to an early end.
The Southeast continued to be the most desirable region, garnering $4.2 million in bids. The Mississippi Valley followed, with $3 million; the Northeast, with $1.7 million; and the Great Lakes, with $1.3 million. The other eight regions accounted for the remainder of the funds.
According to analysis provided by Taylor Simmons of Taylor Simmons Associates in Washington, D.C., Comcast will gain the largest net pop coverage as a result of this auction of flexible spectrum, 62 percent of the U.S. marketplace. Following at second will be Metricom, with more than 50 percent. BellSouth, at third place, paid out the highest prices for its share.
As of Round 24, BellSouth held all four licenses (totaling 30 megahertz) in the following markets: Charlotte/Greensboro, N.C., Atlanta, Tampa/St. Petersburg,and Miami, Fla., Louisville/Lexington, Ky., Nashville, Tenn. and New Orleans/Baton Rouge, La. Several more bidders left the auction just prior to its end, including Alaskan Choice Television L.L.C.; IWL Communications Inc.; Rig Telephones Inc. dba Datacom; and Superior Communications Corp.
The Federal Communications Commission continued to hold two licenses-one in American Samoa and one in Guam/North Guam-due to a lack of bids for those markets.
Before withdrawing all of its high bids from the auction, Alaskan received an answer to its upfront-fee waiver request it submitted April 16.
Alaskan had asked for permission to increase its upfront payment to boost its eligibility. In an April 23 letter denying the request, Auctions Division Chief Kathleen O’Brien Ham wrote, “The commission has repeatedly emphasized that it is incumbent upon auction applicants to remain cognizant of important auction-related filing requirements and appropriate deadlines … Were I to grant your request, which was made 11 days after the deadline for submission of upfront payments and, more importantly, after the WCS auction had commenced, the harm to other auction participants could be substantial.”
