WCS auction slows, could end early
While bidding started out with a bang last Tuesday for the Wireless Communications Services auction, pledges round by round since that time have been on a downhill slide, and the auction could end as early as this week. With only $10.7 million in net revenues accounted for at the end of Round 9, predictions of a $1.8 billion total for 128 2.3 GHz licenses may fall short.
Round One logged in 129 new bids and 76 new high bids, but those numbers dropped to 45 and 28 during the next round. Following the end of Round 9, just prior to press time, there were 11 new bids and 11 new high bids, and three players-Pacific Telesis Enterprises, Bachow/Coastal L.L.C. and Cincinnati Bell Telecommunications Services Inc.-had dropped out. PacTel made no bids in any round.
This auction once again has shown that only the monied players will reap the best markets. Smaller players, including a few who are trying to buy Gulf Coast licenses, are finding that a $15,000 upfront fee does not go far.
Leading the pack in dollars expended so far is BellSouth Wireless Cable Inc., with a total of $3.5 million. Following behind are Comcast WCS Communications Inc., PCSCo Partnership, Metricom Inc., Coloma Wireless Inc. and Bal/Rivgam L.L.C.
“This auction is not dead yet,” commented Washington, D.C.-based Taylor Simmons Associates, who has followed and analyzed the last few wireless sales. “The FCC successfully resuscitated it by reducing the minimum bid increment for the second time, this time from one cent per megahertz/pop to one-quarter-cent per megahertz per pop. The Round 7 reduction in minimum prices finally induced some competitive bidding.”
Even with a price cut, bidders are cautious in moving forward, preferring in many cases to use a waiver rather than make a wrong decision. Simmons said they are waiting to see if the commission will cut prices again before they make any major future plans, such as bidding on new markets or permanently reducing their eligibility.
The most desirable market so far appears to be the Southeast region, which as of Round 8 was owned by BellSouth, followed by the Mississippi Valley (BellSouth) and the West (Metricom).
