Judging from information provided in Form 175s submitted prior to the Federal Communications Commission’s auction of D-, E- and F-block personal communications services licenses, small rural telephone companies-backed by established telecom heavy hitters-are taking advantage of this last big sale of spectrum. Even though the attributable interests of big companies in rural entities may be on the small side, the potential reach of sister cellular, paging, local exchange carrier and other PCS markets will be a plus once these companies begin to build out networks.
A case in point is Alexandria, Minn.-based Rural Cellular Corp. which is bidding on C- and E-block licenses in four markets. The applicant, which provides cellular service in five contiguous northern Minnesota rural service areas, and paging services in that area and in eastern North Dakota, has the backing of Telephone and Data Systems Inc. (13.3 percent combined Class A and Class B common voting stock), Arvig Enterprises (a local exchange carrier with 7 percent combined voting power), Paul Bunyan Rural Telephone Cooperative (a LEC with 4.7 percent combined voting power) and Consolidated Telephone Company (a LEC with 4.7 percent combined voting power). Its affiliates include U.S. Cellular Investment Company, 80-percent owned by TDS; the APT companies, wholly owned subsidiaries of TDS for PCS purposes; TDS Telecommunications Corp., the LEC arm of TDS; and American Paging Inc., the paging arm of TDS. Its partnership interests include North Dakota PCS Limited Partnership, a C-block winner of which Arvig holds 22 percent.
Another Minnesota bidder, Midwest Wireless Communications L.L.C., also is pursuing select D- and E-block licenses. It, too, is affiliated with TDS, which holds a 14.67-percent interest; other affiliates include rural cellular companies and telephone coops that hold anywhere from 7 percent down to 1 percent of the bidder. Midwest has entered into an agreement with another bidder, MVI Corp., to “cooperate with one another regarding bids and bidding strategy as to markets which are the subject of Applicant’s applicant.”
McLeod Inc. of Cedar Rapids, Iowa, is bidding on certain D- and E-block license pairs. The venture is 23-percent owned by IES Investments Inc. of Cedar Rapids; 21-percent owned by Clark and Mary McLeod; 19-percent owned by MWR Investments Inc. in Des Moines; and nine-percent owned by Paul Rhines and Allsop Venture Partners III L.P.
Americall International L.L.C., based in Glendale, Ariz., but organized in Wisconsin, was a previous winner of nine C-block PCS licenses; it is bidding on all blocks this time around. The company, formed in 1995, reports no revenues but claims assets of $7 million. The aggregate gross revenues of all of Americall’s principals and the applicant for 1995 totaled $1.7 million, and the total assets rose to $12.2 million.
Iowa L.P. 136 in Sioux City, applied to bid on 14 F-block licenses as a small business. Its single general partner, ITC Management Company Inc. holds almost 4 percent of the company and is controlled by rural telcos. Its Class A limited partners include those rural telcos, which hold 51.2 percent of the applicant’s outstanding equity interests. Its two Class B limited partners-Iowa Network Services Inc. and Hickory Tech Corp.-hold only nonattributable equity in the venture. As far as outside agreements go, Iowa L.P. 136 has been in discussions with Iowa Network Services for provision of consulting/management services during the construction of any licenses the company may win.
Roberts-Roberts & Associates L.L.C. of St. Louis is bidding on F-block licenses as a small, minority-owned business. The principals, Michael and Steven Roberts, are involved in television broadcasting with ties to Silver King Communications in St. Petersburg, Fla.; the brothers hold 90 percent of the venture while the other 10 percent is owned by Koplar Communications.
Consolidated Telephone Cooperative in Dickinson, N.D., is a rural telco bidding on all licenses in Auction 11. The bidder provides 800 MHz commercial satellite mobile radio service in eight North Dakota cities and paging service in two. Consolidated has agreed to partition the Billings and Golden Valley services areas to Midstate Telephone Company if it is successful in winning the Dickinson basic trading area. The bidder reported 1995 gross revenues of $6.4 million and total assets of $25.1 million.
Amarillo-based High Plains Wireless L.P. is controlled by two entities-West Texas Cellular Telephone Corp. (1 percent) and Amarillo CellTelco dba Cellular One of Amarillo (99 percent). The bidder is pursuing all licenses.
Another Texas bidder-Poka Lambro PCS Inc.-is no stranger to the PCS auction arena. The small rural telco will bid on all available licenses this time, having won six C-block markets in Texas; its sister company, Poka Lambro Telephone Cooperative Inc., holds the A-block license for Guam-Northern Mariana Islands. The bidder has contracted with PVT Wireless L.P. for bidding support services during this auction for nonconflicting D-, E-and F-block licenses.
