Big Names Bow Out Of Lmds Sell-Off

Computergram International, Feb 11, 1998

The FCC aim to sell off licenses for the microwave end of the spectrum to build a broadband wireless network across the US looks well on the way to succeeding as the FCC says that 138 applicants have qualified to enter the auction for local multipoint distribution services (LMDS) spectrum licenses.

The auction is set for February 18, after a three-month delay from the original start date in November. The auctions will cover 1300MHz of spectrum - two licenses of 1150MHz and 150MHz respectively in each of 493 markets. Bids totaling $357.9m have been lodged with the commission. Only two of the five regional Bell operating companies - SBC Communications Inc and US West Inc have applied to bid. Under a recent ruling. RBOCs and dominant local cable companies are restricted to only holding 20% of the operator in any license area that they win. Topping the bidding was WNP Communications Inc $100m while the second biggest upfront payment of $50m has come from Nextband Communications, owned by Nextlink and cellular pioneer Craig McCaw -who along with Microsoft CEO Bill Gates formed the Teledesic broadband-by- satellite LEO project. However, a number of big name players were absent from the final bidding list. Cellularvision US, the only company currently running a commer cial LMDS service, says it will concentrate on selling its experience and connection to its existing network to winning bidders rather than bid itself. Both Comcast or RCN, major cable players, were absent having failed to lodge the requisite payment with the FCC. Microsoft Corp was thought to have been preparing a bid using the MSM name but has also dropped out of the bidding. Long-distance carriers AT&T Corp, MCI Communications Corp and Sprint Corp were thought to have been interested in the LMDS bidding but did not appear on the list of approved bidders. They may, however, still be in the running but operating behind the shield of a shell companies.