WASHINGTON-Rural America may be left out of the re-auction of personal communications
services licenses. At the end of round six on Thursday, 37 percent of the C-block licenses had not received any
bids.
Information provided by the Federal Communications Commission shows these 128 markets had not received
the minimum bids requested by the FCC. The minimum bid amounts were derived from a percentage of the winning
bid of the original auction for C-, D-, E- and F-block licenses.
The 128 markets not receiving at least the minimum
bids are mostly in rural America. Examples include Grand Forks, N.D., Bozeman, Mont., Enid, Okla., Jacksonville, Ill.,
Mansfield, Ohio, Plattsburgh, N.Y., and Texarkana, Texas.
Despite no one bidding for these licenses, there has been
significant bidding activity. Omnipoint Communications Inc.’s subsidiary, OPCS Three L.L.C., was the highest bidder
as of the close of round seven on Friday. OPCS Three has made 22 high bids totaling $74.7 million. ABC Wireless
L.L.C., which reportedly has an agreement with AT&T Wireless Services Inc., has the most high bids at 41, totaling
$44.5 million.
OPCS Three has the high bid for Chicago at $58.5 million. Omnipoint was expected to make a run at
Chicago to fill in holes in its Global System for Mobile communications network. Possessing the Chicago license
would make Omnipoint more attractive in its quest to find a strategic partner, said securities analysts.
ABC Wireless
is the high bidder for Dallas at nearly $32.6 million. Dallas is another major hole in the GSM network.
Left out of
the bidding at the end of round seven is ConnectBid L.L.C., which had been the highest bidder for both Chicago and
Dallas at the end of the three previous days. ConnectBid is associated with Craig McCaw.
McCaw was linked to
PersonalConnect Communications Inc. during the original C-block auction. PersonalConnect dropped out after about
30 rounds, but not before it helped to raise the amount winning bidders paid for licenses. Indeed, three top bidders in
the C-block auction later declared bankruptcy.
Meanwhile, the FCC is considering a request from Gloria Borland
Hawaii PCS Inc. to withdraw licenses for Honolulu and Hilo, Hawaii, from the re-auction. These licenses were part of
the election made by DCR Inc., which has been subject to considerable controversy in a Baltimore bankruptcy
courtroom.
In February, Judge Stephen E. Derby denied a motion by DCR’s parent, Pocket Communications Inc., to
change its decision to give back all but 12 of the 43 licenses (including the two Hawaii licenses) for which it pledged
more than $1 billion in the original auction. In return, the FCC waived claim to the debt Pocket incurred.
Gloria
Borland Hawaii PCS owned 5 percent of the licenses for Honolulu and Hilo, Hawaii, and claims these licenses should
not have been given back to the FCC as part of the DCR/Pocket election.
The Small Business Administration last
week supported Gloria Borland Hawaii PCS’s claims. The SBA urged the FCC not to auction the licenses and award
them to Gloria Borland Hawaii PCS.
SBA “believes that the irreparable harm to Ms. Borland’s undisputed
ownership interest in the Hawaii [licenses] is the valid issue before the [FCC] at this time. Resolution of this issue in
Ms. Borland’s favor is the only reasonable and equitable thing to do … We encourage the [FCC] to take all necessary
steps to ensure that this small business and minority female licensee is able to fulfill the initial promise of [the] C-
block,” the SBA said in a letter dated March 22, the day before the auction began.
No one had bid on these
licenses by the end of round six.
Even if a bidder comes forward, the FCC still could still pull the licenses back and
award them to Gloria Borland Hawaii PCS.
“A draft order that addresses the issues raised in Ms. Borland’s
filing currently is circulating among the commissioners. After reviewing the merits of Ms. Borland’s application, the
[FCC] has the discretion to withdraw the Honolulu and Hilo, Hawaii licenses from the re-auction,” said Kathleen
O’Brien-Ham, deputy chief of the FCC’s Wireless Telecommunications Bureau, in a letter to Rep. Neil Abercrombie
(D-Hawaii).
