WASHINGTON-After an explosive beginning to the re-auction of 18 C-block personal communications services licenses, the original pool of bidders decreased last week to seven, and no one bidder is dominant.
While there was some thought that the re-auction would be over by last Friday, the Federal Communications Commission’s decision to move to Stage 2 bidding rules (in which participants have to bid 80 percent of their eligibility) has pushed those bidders who have been saving pops to use them to gain new properties.
As of Round 17, NextWave Personal Communications, which apparently had lost interest in Seattle, made its move on Cook Inlet Western Wireless PV/SS PCS L.P., taking away that stronghold. Albuquerque could be another NextWave target. The big question is: Why isn’t Mountain Solutions Ltd. taking the opportunity to regain Fort Collins and Colorado Springs, Colo?
At the end of Round 16, NextWave held the high bids on Minneapolis/St. Paul; Denver, Colorado Springs and Fort Collins/Loveland, Colo.; and Portland, Ore. (net high bids-$348.3 million).
CH PCS Inc. captured Phoenix for $213.8 million. Cook Inlet Western Wireless took Seattle/Tacoma, Olympia/Centralia and Bremerton, Wash., for $191.6 million. Magnacom Wireless L.L.C., which could be the Cinderella winner in this auction, has spent $84.4 million so far for Tucson; Salem/Albany/Corvallis, Ore.; Longview, Wash.; and Albuquerque and Santa Fe, N.M.
Westel L.P. spent $13.8 million for Eugene/Springfield, Ore.; and American Samoa. And Redwood Wireless Communications took St. Cloud, Minn., for $9.1 million.
According to Washington, D.C., analyst Taylor Simmons, CH PCS’s bid on Phoenix made the PCS record books as the highest per-pop price paid for an individual market: $89.91. The previous high price was $75.76 for the resort areas of Maui and the Virgin Islands.
Four lawsuits against the FCC continue to be on tap regarding this and upcoming auctions at appeals courts in four venues. National Telecom PCS Inc., headed by Jack Robinson, filed a petition last Thursday for review of the commission’s minority-preferences rulings as they pertain to the D-, E- and F-block PCS auction at the U.S. Court of Appeals for the Third Circuit in Philadelphia.
NatTel not only wants all minority preferences regarding installment payments and bidding credits reinstated, but it also wants an emergency stay of the auction and of applications for it, which are due July 31.
According to Robinson, the FCC had not conducted any research into “the amount of discrimination minorities face in the telecommunications industry” before it eliminated preferences. The commission also “created an expectation over two years ago that minorities would receive preferences for licenses covering 30 megahertz of spectrum.”
Robinson also hopes for President Clinton’s support, following his statement to a recent National Association for the Advancement of Colored People convention in Charlotte, N.C., defending affirmative action. “I hope he instructs the Justice Department not to oppose us in the Third Circuit,” Robinson said. A decision is expected prior to July 31.
Radiofone Inc. filed a petition for review last Wednesday at the Fifth Circuit regarding the commission’s repeal of the cellular/PCS crossownership rules even though it retained a 45-megahertz cap on spectrum. The carrier seeks to review the auction and its eligibility rules.
Cincinnati Bell Telephone Co. filed a similar pleading last Wednesday in the Sixth Circuit. Because these three cases deal with the same docket, they could be aggregated into one proceeding at one circuit court.
In its ongoing appeal of the FCC’s decision to re-auction the 18 defaulted licenses rather than to offer them to the second-highest bidder, Mountain Solutions Ltd.-next in line for Fort Collins and Colorado Springs, Colo., licenses-filed a rebuttal of the commission’s opposition to the bidder’s plea for expeditious consideration.
Mountain Solutions contended that the FCC left out a key phrase in detailing to the appeals court its rules regarding re-auctioning of licenses. According to original FCC paperwork, Mountain said, a re-auction is in order only when the bidder defaults after making the down payment. The FCC, however, left out of its statement to the court the phrase about defaulting after the down payment; its statement, Mountain charged, made it look like re-auctions are the best resolution after an auction winner “defaults or is otherwise disqualified.”
In addition, Mountain Solutions contended that the FCC admitted that it was negligent because it did not take the testimony of Mountain Solutions’ economist into consideration when it denied Mountain’s original petition to offer defaulted licenses to the next bidder. “If the FCC had wanted to disregard the views of Dr. [David J.] Salant, it was obligated to obtain a statement from some other expert supporting its position,” Mountain wrote. “The FCC cannot … simply reject the only evidence of record in an unsupported brief filed before this Court.”
In another auction-related matter, the FCC’s Auction Division said it will begin awarding C-block licenses within the next two weeks.
