WASHINGTON-Looking forward to the next round of personal communications services auctions set to begin Aug. 26, Michele Farquhar, chief of the Federal Communications Commission’s Wireless Telecommunications Bureau, promised to “expedite the process, just like we did today.”
And with that, the lightning sale of 18 defaulted C-block PCS licenses ended early last week after just 25 rounds. Net revenues of $904.6 million were gained, a $30 million improvement over the original prices paid by BDPCS Inc. and National Telecom PCS Inc. more than two months ago. Of the 32 eligible bidders who tangled in Round One that began July 3, only seven made it to the end, perhaps due in part to the commission’s quick bidding-phase-upgrade reaction any time it looked like the pace was slowing.
“Many of the re-auction bidders were C-block bidders, and they knew where the technology holes were,” Farquhar said. “Plus, they were familiar with the technology.” And because of bids placed on the licenses during the C-block auction, participants also knew the relative value of a market.
In the end, NextWave Personal Communications Inc. paid $542.46 million for seven markets: Minneapolis-St. Paul; Denver; Seattle-Tacoma, Olympia-Centralia, Longview and Bellingham, Wash.; and Portland, Ore. CH PCS Inc. committed $213.8 million for Phoenix. Newcomer Magnacom Wireless L.L.C. bid $108.5 million for Tucson, Ariz.; Salem-Albany-Corvallis and Eugene-Springfield, Ore.; and Albuquerque and Santa Fe, N.M.
Mountain Solutions Ltd. Inc. paid $23.6 million for Colorado Springs and Fort Collins-Loveland, Colo. The company, which was an unsuccessful bidder for these markets in the original C-block auction, ended up paying more than its original bid for Colorado Springs but less for Fort Collins.
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Cook Inlet Western Wireless PV/SS PCS L.P. bought Bremerton, Wash., for $9.2 million; Redwood Wireless Corp. paid $6.8 million for St. Cloud, Minn.; and Westel L.P. bid $170,250 for American Samoa.
The majority investor in Westel is Quentin Breen, a former PCS 2000 principal who still is under investigation by the FCC regarding his activities with that C-block winner. According to Jack Robinson, head of National Telecom PCS Inc., the original C-block winner of American Samoa, a petition to deny will be filed for this market.
NextWave now has paid an average of $42.42 per pop for its 63 licenses, and it now can claim four-corner coverage of the United States. “From a carriers’ carrier point of view, our seven new markets more than add to the value of our network,” commented Allen Salmasi, NextWave’s chairman and chief executive officer. The company now owns 16 of the top 25 U.S. markets.
Existing carriers and new entrepreneurs beginning to make plans for the next round of auctions should make sure they have plenty of capital to commit. Besides increase upfront and down payment prices mandated in the last rule change, prices for the 10-megahertz D-, E-and F-block broadband PCS licenses will be higher than for those in the C-block, predicted WTB deputy chief Jerry Vaughan. While saying he wouldn’t make book on this, Office of Plans and Policy senior economist Evan Kwerel admitted that the number of big players-phone companies and cellular carriers-planning to bid could bear Vaughan’s educated guess out.
Even so, Vaughan was careful to stress that small businesses were not going to be locked out of the auction, that the F-block would be there with small-business restrictions in place.