WASHINGTON-The Federal Communications Commission continued to clear out the backlog of old C-block personal communications services business by finally issuing most of Meretel Communications L.P.’s licenses, save the one property against which a petition to deny was submitted. The commission also assessed a whopping $67.6 million default fine against BDPCS Inc., due within 30 days.
In an order released Oct. 28, the FCC charged the C-block defaulters, whose licenses were reauctioned earlier this summer, $42.7 million plus 3 percent of either BDPCS’ bid or the winning bid in the reauction, whichever was lower; that 3 percent totaled $24.9 million.
BDPCS already had forwarded $7 million in earnest money at the beginning of the C-block bidding, which the FCC kept, bringing BDPCS’ total payment due to $67.9 million.
“To compute the fine, the FCC ignored licenses that reauctioned for more than BDPCS*bid and charged the company the difference in price for those that reauctioned for less,” said a BDPCS*spokesperson.”This certainly constitutes cruel and unusual punishment.”
The current auction of D-, E- and F-block PCS licenses surpassed the $2 billion mark at the end of Round 85. Bidders are watching their dollars much more carefully than they did during the C-block auction, and Washington analyst Taylor Simmons predicts $2.2 billion could be the final net total.
“I still believe that we have another 75 to 100 rounds to go, which means the longer it takes the FCC to dial up the pace of the auction to four, six or even eight rounds per day, the more likely the auction is to drag into late December,” added the Simmons Associates principal.
“But with more than 100 bids still being placed in a typical round, there are still a number of bidders experiencing sufficient turnover to appreciate the current slow pace,” he said.
Bidding is now at three rounds per day.
The commission doesn’t believe the pace of the auction is too slow; in fact, one staffer pointed out that bidding for A-, B- and C-block licenses all exceeded 100 rounds, and that new rule changes instituted prior to the current auction actually had players bidding more aggressively from the get-go.
In addition, bidders that kept track of market values in past auctions have had a leg up on knowing what to bid for a particular city and even when to drop out altogether when prices exceed value.
There still have been no surprises regarding the top auction bidders.
At the end of Round 85, SprintCom Inc. had spent an aggregate $516.6 million; AT&T Wireless PCS Inc., $328.4 million; BellSouth Wireless Inc., $201.7 million; OPCSE-Galloway Consortium, 120.2 million; Alltel Mobile Communications, $120.2 million; and Northcoast Operating Co. Inc., $105.4 million.
Several markets in the top 50 BTAs still were going for less than $1 million, including these F-block properties: Minneapolis-St. Paul ($430,511 from OPCSE-Galloway), Pittsburgh ($195,000 from Devon Mobile Communications), Denver ($646,000 from Radiofone PCS L.L.P.), Kansas City ($157,250 from DCC PCS Inc.), and Milwaukee ($939,750 from NextWave Power Partners Inc.
