WASHINGTON-The D-, E- and F-block personal communications services auction topped $1 billion last week, while nine more bidders defaulted in the C-block auction.
The defaults on $125 million worth of down payments pale in comparison to the $10.2 billion taken from the C-block PCS auction and appear far less severe than what was anticipated.
“In think this sends a positive signal to the financial markets,” said Jonathan Foxman, director of strategic and business planning at BIA Consulting Inc.
Michele Farquhar, chief of the Wireless Telecommunications Bureau at the Federal Communications Commission, agreed. “I think this is a positive result,” she said.
Five of the nine bidders that defaulted by not making the down payment last Tuesday, noted Farquhar, have since made the payment and sought a waiver to keep their licenses.
The C-block bidders who defaulted are Carolina PCS (nine licenses/$93 million), Mountain Solutions (10 licenses/$25 million), Longstreet Communications International (one license/$2.2 million), MFRI (one license/$1.6 million), Wireless Telecommunications Inc. (one license/$850,000) Southern Communications (one license/$506,000), RFW Inc (one license/$287,000), National Telecom Holdings (one license/$285,000) and Roberts-Roberts (six licenses/$7.7 million).
The bidders filing waivers are National Telecom, RFW, Roberts-Roberts and Southern Communications.
The FCC previously re-auctioned the defaulted C-block licenses of BDPCS Inc. (17 licenses) and National Telecom PCS (1 license) and raised more money on the second go-around.
The nearly 1,500 10 megahertz licenses in the D-, E-and F-block auctions are not bringing in the revenue of the previous C-block broadband PCS auctions, which raised nearly $20 billion, which could mean bidders are getting bargains or that the market isn’t betting on them being successful in a competitive environment.
And while the auction may continue for months, it’s not clear that auction proceeds will increase substantially.
“In terms of dollars I see it peaking under $2 billion, perhaps well under $2 billion,” said Taylor Simmons, a wireless telecom consultant with Simmons and Associates of Washington, D.C.
Simmons said that with the exception of the Southeast and some other geographic pockets bidding remains fairly calm.
