WASHINGTON-The 900 MHz specialized mobile radio auction that begins tomorrow is expected to be characterized by a mixture of bidding by big companies like Geotek Communications Inc. and Ram Mobile Data USA L.P., which want to expand existing systems into national networks, and more focused bidding by smaller firms seeking to protect local market share.
In all, 128 bidders will compete for 1,020 SMR licenses being sold by the Federal Communications Commission. One round of bidding will be held in each of the first two days (Tuesday and Wednesday) of the auction. A decision will then be made whether to increase the number of bidding rounds per day.
The auction will recess after Dec. 22 and resume Jan. 4.
The 900 MHz SMR auction was supposed to start Nov. 28, but the week-long government shutdown last month pushed back the date one week. Some concerns were expressed that auction applicants had only several days to get familiar with bidding software and learn the bidding eligibility of their competitors.
“What we will try to accomplish is the same as other incumbents in the auction,” said Andrew Siegel, general counsel for Geotek.
Geotek and others that hold 900 MHz licenses have been hampered by FCC licensing delays. The agency during the late 1980s issued dispatch radio permits in the top 50 markets, but has struggled since then to come up with a new licensing plan that accommodates the trend toward digital technology and wide-area networks.
Geotek, of Montvale, N.J., is the largest 900 MHz SMR, holding 1,200 licenses in 36 major metropolitan areas. Wide-area systems, with integrated voice and data capabilities and driven by Frequency Hopping Multiple Access digital technology, have been activated most recently in Miami and earlier this year in Baltimore-Washington, D.C., and Boston. The Philadelphia system will begin commercial operations by year’s end.
“User feedback on the performance of the (Miami) network has been extremely positive,” said Yaron Eitan, president and chief executive officer of Geotek.
Ram Mobile Data, which has BellSouth Corp. as a major partner, is one of the top providers of wireless data communications in the country. The Woodbridge, N.J.-based firm is pursing an ambitious buildout schedule, adding 150 base stations this year and 350 more in 1996. As a result, Ram said it will have increased building penetration in markets with 94 percent of the nation’s urban businesses.
“Whether coverage is required in office buildings or at convenience stores, hotels, restaurants, industrial or commercial areas, we are identifying the requirements and deploying our resources to meet our customer needs,” said William Lenahan, president and chief executive officer of Ram.
Nextel Communications Inc., the nation’s top SMR, and Motorola Inc., the largest mobile radio manufacturer, also should be considered serious bidders because of their dominating presence in the SMR industry. Yet, it does not appear that either company has as much vested interest in 900 MHz as Geotek and Ram.
Nextel bidding in 13 markets is limited by last year’s Justice Department antitrust consent decree governing the firm’s acquisition of Motorola SMR systems. The company is more likely to make a big play for 800 MHz SMR licenses to be sold next year, since most of its wireless properties are held in that band.
Paging Network Inc., the premier paging operator in the United States, also is in the running for 900 MHz SMR licenses. It has been speculated the firm might want additional spectrum to supplement that already bought in the 900 MHz band for narrowband personal communications services.
“This is the first auction the FCC will have conducted that protects the incumbents,” said Alan Shark, president of American Mobile Telecommunications Association, referring to the fact that no incumbent operator is being forced to move to another frequency band in this auction.
Shark and others predict bidding will be very disciplined, with existing SMR players-large and small-being careful about how they affix market values to licenses they need to satisfy their business strategies.
