WASHINGTON-A terse, two-line order from the U.S. Court of Appeals for the District of Columbia Circuit gave the Federal Communications Commission the go-ahead it needed to begin the July 3 re-auction of 18 defaulted C-block personal communications services licenses.
And for C-block giant NextWave Personal Communications Inc., it was like seven weeks had never passed. Once again, the company steamrolled every other bidder, placing 17 out of 18 new high bids in the first round.
NextWave bid a first-round total of $311.6 million for everything on the block except American Samoa. Its five top initial bids were $63.9 million for Minneapolis; $60.9 million for Seattle; $54.1 million for Phoenix; $46.6 million for Denver; and $38 million for Portland, Ore.
In Round 2, however, other bidders began fighting back, and most of the markets changed hands; total net revenues reached $470.6 million. While Denver and Minneapolis stayed with NextWave, Aer Force Communications II L.P. took Albuquerque, N.M. ($20.6 million), Colorado Springs, Colo. ($5 million) and Phoenix ($72.2 million). Cook Inlet Western Wireless PV/SS PCS L.P. took Bellingham ($1.6 million), Bremerton ($2.4 million), Olympia ($3.3 million) and Seattle, Wash. ($71.1 million) plus Tucson, Ariz. ($8.5 million).
Magnacom Wireless L.L.C. gained the second-round lead in Eugene ($2.3 million), Portland ($41.8 million) and Salem, Ore. ($5.4 million) along with Fort Collins, Colo. ($2.3 million); Longview, Wash. ($1 million); and Santa Fe, N.M. ($2.1 million). Western Minnesota PCS L.P. holds St. Cloud, Minn. ($2 million).
As a market/price comparison, BDPCS Inc., which defaulted on these licenses, paid final prices of $128.7 million for Minneapolis, $199.1 million for Seattle, $177.7 million for Phoenix, $121.1 million for Denver and $102.4 million for Portland.
Taylor Simmons of Washington, D.C.-based Taylor Simmons Associates said NextWave’s function was to jumpstart the re-auction, and that market values will double by Round Seven. “Things are going to get real expensive real fast,” he added.
Surprisingly, no one placed an initial bid for American Samoa; during Round Two, KMTel L.L.C. weighed in with a $751 bid. National Telecom PCS Inc.,the former licensee, threatens trouble. “Whoever wins American Samoa will be served with a summons and a complaint the day after the auction ends. The complaint is already drafted; all we have to do is fill in the blank with the name of the defendant,” said Jack E. Robinson, president of National Telecom, who continues to fight the commission’s decision to re-auction the Samoan license. “We will ultimately prevail.”
Early last week, several bidders had been clinging to the slim hope that the re-auction would be stayed, but it was not to be. “Ordered that the motion for stay be denied. Petitioner has not satisfied the stringent standards required for a stay pending court review,” Circuit Judges Lawrence Silberman, Douglas Ginsburg and A. Raymond Randolph ruled late July 2.
Mountain Solutions Ltd. Inc., a C-block winner that was second in line for the Fort Collins and Colorado Springs, Colo., basic trading area licenses that were part of BDPCS Inc.’s entire defaulted package, filed an emergency motion for stay July 1 at the appeals court, following a rejection by the FCC of the same motion June 28. In its petition, Mountain Solutions claimed the FCC ignored all evidence that re-auctioned licenses would take even longer to deploy than if they were given to the second-highest bidder along with overlooking the possibility of a second default. Mountain Solutions will participate in the re-auction, but from the looks of things, the party could be over quickly.
Downplaying any notion that her company was looking for a quick resolution of the re-auction process, NextWave spokeswoman Jennifer Walsh told RCR, “We’re calling this the `C-plus’ auction; we think it will be just as competitive as the C block. But we clearly have shown that these markets are all very valuable to us.”
