Comcast Corp. and U S West Inc. were among companies filing
notices of their intentions to bid in forthcoming LMDS auctions last week.
The passing of the filing deadline on Jan. 20 came without
comment from the Federal Communications Commission, leaving observers to speculate on who
was and who wasn't planning to participate in the auctions.
The FCC is putting up for grabs 1.3 gigahertz of spectrum
for local multipoint distribution services that are slated to get underway Feb. 18. Based
on individual company responses to queries from Multichannel News, the new
wireless-broadband category appeared to be drawing the expected cluster of smaller
companies, but few of the larger companies that had been weighing the prospects.
WorldCom Inc., AT&T Wireless Inc., GTE Corp. and
BellSouth Corp. all reported that they had decided to pass on the auctions. Still unknown
at press time were the intentions of Sprint Corp. and SBC Communications Inc., both of
which have been looking at the possibility of using the new point-to-multipoint
interactive technology to expand their presence in the local-services marketplace.
Among cable entities, the only MSO besides Comcast that is
known to be planning to bid on LMDS is US Cable Corp., although sources said some smaller
entities were probably going to participate.
The FCC refused to comment on the responses, even to the
point of declining to say whether the level of interest was strong or weak.
'We're still reviewing applications,' said an FCC spokeswoman, noting that
there could be considerable overlap in applications of parties represented by different
financial interests.
In any event, she added, knowing the names on the short
forms used in the filings, which were to be revealed this week, isn't nearly as
important as knowing who will make the upfront payments that are required for
participation in the auction, which are due Feb. 2.
The FCC's silence made it unclear whether the new
industry sector would draw sufficient support from major companies and from Wall Street to
make it a viable long-term player in the increasingly crowded telecommunications arena.
While some start-ups -- such as LMDS pioneer CellularVision
USA Inc., which is already operating under a special license in parts of New York City, as
well as Webcel Communications and US WaveLink Telecom LP -- were in line to bid with
financial backing largely arranged, others have been forced to drop out because of lack of
financing.
The participation of companies like U S West and Comcast
will go a long way toward strengthening investors' commitment to the technology, said
CellularVision CEO Shant Hovnanian.
'I think you're going to see strong
participation,' he said, adding that his company has just completed financial
arrangements for an additional $1 million of backing from J.P. Morgan & Co. as part of
ongoing fund-raising efforts.
The companies that are known to have registered their
intentions to bid refused to discuss their strategies. Based on the partial ban against
telco and cable participation within their operating territories, those entities could be
expected to use the technology primarily to expand their market footprints.
Asked whether Comcast was looking at extraterritorial use
of the spectrum, Joe Waz, the company's vice president of external affairs and public
policy counsel, replied, 'You can assume that's the case.'
But he declined to say whether Comcast intended to use the
technology primarily for business services, as many potential bidders have said that they
would, or whether the company might also go after the consumer market.
U S West has left open all options, including the
possibility that it could go after the small, 150-megahertz 'B' block of LMDS
spectrum that is available for in-territory use by telcos and cable companies, said
spokesman Jerry Brown. The carrier might also go after the larger, 1.15-GHz 'A'
block, should the telcos prevail in their efforts to persuade the U.S. Appeals Court in
Washington, D.C., to overturn the in-territory ban.
The court held a hearing on the telcos' case Jan. 16,
and it made it clear that it would not stay the auction. While the court has agreed to
expeditious treatment of the issue, it was unclear whether a decision could be reached
before the auctions begin, or what would be done if a decision favoring the telcos was
reached at a later date.
