WASHINGTON-There are amazing parallels between last week’s auction of the late Jacqueline Onassis’ possessions and bidding decisions being made by certain small players in the C-block broadband personal communications services auction that appears finally to be winding down.
Pieces of the former First Lady’s life are being sold for double-digit multiples of their Sotheby appraisals, due to the fact that some people will pay anything to own a bit of history. And according to Taylor Simmons of Washington, D.C.-based Taylor Simmons Associates, some C-block bidders-whom he called “scavengers”-are doing the same thing: looking for a property that is both affordable and “good” in hopes of building a network, gaining telecom expertise and then selling out short-term to a neighboring PCS system. He characterizes Americall International LLC, Aer Force Communications LP and Fortunet Wireless Communications LP as such.
According to Simmons, scavengers don’t care where a single desirable market is located but rather who the closest larger-market PCS licensee is; some properties are clustered, but most are “all over the road.” The C-block license then will be built out to match the technical standards of the nearest licensee in order to facilitate a deal later on. The scavenger may even backhaul from the neighbor’s switch.
“This is very risky; it is speculation in play,” Simmons said. “You have to hope you can hook up with a neighboring major trading area system.”
As of Round 136, the C-block auctions have taken in $10.5 billion. As the bidding slows, it has been easier to determine which small bidders have been successful in putting together and maintaining the high bids on single-state markets that will be linked into wide-area systems. These bidders include: Brookings Municipal Utilities (S.D.), Carolina PCS I Limited Partnership (S.C.), Central Alabama Partnership LP 132 (Ala.), Communications Venture PCS Limited Partnership (Ind.), Mercury PCS LLC (Ala.), North Dakota PCS Limited Partnership (N.D.), Northern Michigan PCS Consortium LLC (Mich.), NOVERR Publishing Inc. (Mich.), OnQue Communications Inc. (Okla.), Poka Lambro PCS Inc. (Texas) and Poka Lambro/PVT Wireless Limited Partnership (N.M.).
Other state-centered groups include Reserve Telephone Company Inc. (Miss.), Roberts-Roberts & Associates LLC (Mo.), Rosas Inc. (Texas), SouthEast Telephone LP Ltd. (Ky.), Southwest Minnesota PCS LP (Minn.), Urban Communicators PCS LP (N.C.), Virginia PCS Alliance Consortium (Va.), Western Minnesota PCS Limited Partnership (Minn.) and Wireless 2000 Inc. (La.).
According to the most recent research submitted by BIA Consulting in Chantilly, Va., nothing has changed much in its determination of the Top 10 highest-priced markets (by dollar and per pop) and the Top 10 most active markets overall. What changed were the Top 10 active markets last week: Oneata, N.Y.; Danville, Va.; Huron, S.D.; Ardmore, Okla.; Helena, Mont.; Sarasota-Bradenton, Fla.; Brownsville-Harlingen, Texas; McAllen, Texas; Bozeman, Mont.; Escanaba, Mich; and Laredo, Texas. Many of these markets have been experiencing increased play as the one-state players have tried to add value to their portfolios in the 11th hour.
Other analysis provided by Simmons showed that a surprising number of original bidders have never dropped a pop in eligibility, and most of them are not big players. Those maintaining a pristine record include: BDPCS Inc., Indus Inc., The Chillicothe Telephone Co., CH PCS Inc., OnQue Communications, New York BTA 453 PCS, NOVERR Publishing, Comtel PCS Mainstreet Ltd., Delaware PCS Limited Partnership and Vincent D. McBride.
