WASHINGTON-Any previous bets that the auction of the D-, E- and F-block broadband personal communications services licenses would not garner even $1 billion are off. As of Round 25, net revenues for the three blocks total $980.6 million, and the bidding is nowhere near finished.
“In any case, I still say the auction won’t go past $2 billion, and it will likely conclude in October although all it takes is one prolonged battle between two bidders for one out of 1,479 licenses for the auction to continue,” commented auction analyst Taylor Simmons of Simmons Associates in Washington, D.C.
As of Round 25, bids on D-block licenses made up 42 percent of total net revenues, bids on the E block contributed 39.7 percent and the F block was responsible for the final 18.3 percent. According to figures compiled by BIA Consulting in Chantilly, Va., the national average price per pop being paid for D-block licenses as of Round 25 was $1.57; the E block, $1.48; and for the F block, $0.68.
The top 10 bidders at presstime are SprintCom Inc. ($202.7 million), AT&T Wireless PCS Inc. ($93.7 million), Northcoast Operating Co. Inc. ($81.1 million), Norwich Communications Inc. ($79.8 million), Rivgam Communicators L.L.C. ($77.3 million), OPCSE-Galloway Consortium ($67.7 million), Alltel Mobile Communications ($63.3 million), BellSouth Wireless Inc. ($41.5 million), Western PCS BTA 1 Corp. ($39.3 million) and NextWave Power Partners Inc. ($37.8 million).
The top five leading bidders in the D block following the close of Round 25 did not change from Round 15: SprintCom, AT&T Wireless PCS, OPCSE-Galloway, Alltel Mobile and Western PCS. In the E block, two spots changed during the course of 10 rounds; the top five now include: SprintCom, Norwich Communications, Rivgam Communicators, Western PCS and AT&T Wireless PCS. Finally, in the entrepreneur’s block, only one leader changed from Round 15 to Round 25, resulting in the following five top bidders: NorthCoast Operating Co., NextWave Power Partners, OPCSE-Galloway, Aer Force Communications B L.P. and West Coast PCS.
As far as bidding strategy last week went, Simmons pointed out that there is overlapping competition for markets in all three blocks, but this is particularly true for F-block markets. “Overall, the F block is marked by single- and double-digit high bids that have been standing for a long time, and this has not been happening in the other blocks,” he said.
Simmons also wondered if the FCC’s pre-auction anti-collusion warnings scared away many top players from whom the agency hoped to make big bucks. Some of the larger, deep-pocketed companies that bailed out prior to submitting entrance fees or that have departed during the last week include GWI PSC Inc., NewTelco (a sister bidder to SprintCom), PersonalConnect and Cox Communications.
In a Sept. 17 letter from Kathleen O’Brien Ham, chief of the Auctions Division of the Wireless Telecommunications Bureau, to attorney David Nace of Lukas, McGowan, Nace & Gutierrez, she reiterated commission rules regarding any negotiations between bidders for “management, resale, roaming, interconnection, partitioning and disaggregation.” Such discussions, she said, could reveal pricing information and bidding strategy if held between bidders for the same markets, which she termed “impermissible subject matter for discussion.”
However, Ham wrote, the anti-collusion rules do not, in general, prohibit business negotiations between D-, E-and F-block applicants, as long as they keep their discussions strictly on task. Ham recommended that applicants “err on the side of caution” when discussing post-auction opportunities.
In other auction news, the commission conditionally granted all C-block licenses not subject to pending petitions to deny. Each licensee already has been credited with half of the 10-percent down payment; the remaining half is due Sept. 24. Remaining payments must be made quarterly.
