Wireless auction draws 74 bidders

November 02, 1994|By Michael Dresser | Michael Dresser,Sun Staff Correspondent

WASHINGTON -- "If you bid it, they will come," Federal Communications Commission Chairman Reed Hundt cracked yesterday.

And they did.

Seventy-four competitors, ranging from AT&T Corp. to Vivian E. Warner of Crossville, Tenn., signed up to bid in the FCC's auction next month of 99 regional licenses for a new wireless telephone service, the FCC announced. In the Baltimore-Washington area, 23 have signed up to bid for the single license available.

The Dec. 5 auction of licenses for broadband personal communications services (PCS) is expected to be the most lucrative by far in the FCC's series of celestial yard sales. Two rounds of bidding for other slices of the radio spectrum have raised more than $1 billion for the U.S. Treasury so far, and the next auction could net several times that amount.

The PCS licenses are expected to become the foundation of a new industry that could conceivably challenge not only the cellular telephone industry but also traditional wired phone networks.

Mr. Hundt, who jokingly welcomed reporters yesterday to the FCCC -- "Federal Competition in Communications Commission" -- estimated that next month's spectrum sales could lead to the investment of $30 billion to $50 billion in the industry and the creation of 1 million jobs over the next 10 years.

The December auction has attracted most of the heavyweights in the telecommunications industry.

All the regional Bell companies filed as bidders by last Friday's dead line. Bell Atlantic Corp., Nynex Corp. and U S West Inc. have joined with cellular specialist AirTouch to bid as PCS Primeco LP. Four other Bells will compete as individual companies, with game plans ranging from Pacific Telesis' national ambitions to Ameritech's and BellSouth's interest in two markets each.

Sprint Corp., as expected, lined up with Comcast Corp., Cox Cable Communications and Tele-Communications Inc. under the name WirelessCo LP to bid in enough markets to stitch together a nationwide wireless network. Other credible bidders who signed up to bid in most or all of the 51 markets include GTE Macro Communications Corp., American Portable Telecommunications Inc. and Continental Cablevision Inc.

Conspicuous by its absence was long-distance company MCI Communications Corp., which announced last week that it would sit out the auction frenzy.

"They're probably the most brilliant of all," said Herschel Shosteck, a Silver Spring-based market economist who follows the wireless telephone business. "They could have the opportunity to decide after some of these other people go broke of buying the debris."

One of the most hotly contested markets is likely to be Baltimore-Washington. While two licenses will be on the block in most markets, only one will be sold in this region because American Personal Communications Inc. already has been awarded one of the licenses under the FCC's "pioneer preference" program, which recognizes companies that had roles in developing PCS technology.

Among the leading competitors in Baltimore-Washington will be the Sprint-cable alliance, Pacific Telesis, AT&T Wireless PCS Inc., GTE, Continental and American Portable.

Others who signed up to bid are distinct dark horses in every market in which they signed up.

They include Ms. Warner, an individual bidder who is challenging the constitutionality of the up-front payment every bidder is required to post by Nov. 18.

Since she signed up to bid in all 51 markets, including Puerto Rico and American Samoa, her up-front fee would come to $150 million.

Robert Pepper, the chief of the FCC's Office of Plans and Policy, said many of those who signed up to bid will probably be disqualified because they fail to make the upfront payments, which are based on the number and size of the markets bid upon.

For instance, in an earlier auction for narrow-band PCS licenses, only 29 of the 69 companies or individuals that filed put up money.

Baltimore Sun Articles
Please note the green-lined linked article text has been applied commercially without any involvement from our newsroom editors, reporters or any other editorial staff.