The PCS companies now proposing that the Federal Communications Commission change the rules to allow them to stay in business are proposing options that any creditor in the business world would not consider.
You buy a new car. You can’t pay for your new car, someone comes and takes the new car away: It’s called repossession, and it’s not nice, but it is a reality when people get themselves in too much debt. This often happens when a person buys a car he or she cannot afford.
In the real world, no creditor wastes his time listening to arguments about how the value of the car has depreciated since it was driven off the lot and that the car dealer won’t be able to recoup the money it originally could have made when the too-much-in-debt person promised to buy the car-even when that argument is true.
In some cases, the car dealer will refinance the car to enable lower payments to help the too-much-in-debt-car-owner-wannabe still keep the car. But in those situations, the car dealer makes even more money from the wannabe-car-owner.
Perhaps there are minor adjustments that can be made to the PCS license rules to aid all companies that have paid for licenses. But rules have to be applied uniformly, even for companies without financial problems.
It is sad when dreams go unrealized. It is sad that NextWave Telecom Inc. and Pocket Communications Inc. are in financial straits. It is sad that, for the most part, only established telecommunications players had the resources to buy A- and B-block PCS licenses.
But it was sad that BDPCS Inc. couldn’t make its first quarterly interest payment and lost its licenses.
Why are the companies in trouble today any different than the companies that were in trouble a year ago? BDPCS’ only fault was that it was first to default.
Go back to the original rules. They were crafted fairly well and every bidder agreed to play by them. Some companies have even able to begin offering PCS service under them. And some day, some companies may even be able to profit under them.
Then start the reauction.
No one can accurately predict what prices defaulted licenses can fetch.
Because even if the car dealer can’t get the original price on the now-repossessed car, he can still make a profit.
