Pierre: Another note on LWIN. Build out requirements on Auction 5, 10, and 11 end on or about November 4, 2001; April 28, 2002; and June 27, 2002 respectively. Leap Wireless has petitioned for a waiver and extension of construction requirements for some 38 licenses which LWIN claims that they will not be able to meet the previous build-out requirements.. However, LWIN claims that these licenses were only recently acquired through acquiring these markets from their original holders. The rules set aside in the C/F block auctions stated that the Commission prohibited entrepreneurs from assigning C and F block PCS licenses won in closed bidding to non-entrepreneurs before the end of a five-year holding period to ensure that C and/or F block PCS licensees did not take advantage of the eligibility set-aside by immediately assigning or transferring control of their licenses to entities not meeting the eligibility requirements (i.e. Non-Enterpreneurs). The Commission later ruled that holders of C/F block liscense's could partition or disaggregate a license won in closed bidding to a non-entrepreneur. As long as the enterpreneur license holder had reached the benchmark buildout of coverage of one-third of the population in its licensed area within five years of grant of the original license. So we saw LWIN use this rule to disaggregate 15Mhz of their 30 Mhz in Salt Lake City, and Provo to Cingular for approx. 140 Million Dollars. Since LWIN had reached their 5 year buildout requirement in both markets. (Which BTW, LWIN only paid about 4.5 million for SLC, 400K for Provo for the whole 30Mhz block in Auction 22 in 1999. That's 15Mhz free spectrum and 130 Million in Cash... Not a bad deal?) So as the Build Out requirements come near to an end. There are still many small markets where the original enterpreneur licensees still hold the license, yet never started the build out requirements.. That means that these license holders would have to return their licenses back to the Commission due to default of the "Build Out Requiremtents". These holders of near worthless licenses can not sell them to non-enterpreneur companies due to rules preventing such sales without completing build-out benchmarks... Which means they can only sell them to Small/Very Small companies like LWIN.
So one could speculate that if LWIN is granted the waiver by the FCC. Then that would open the door for them to start acquiring many smaller markets for a very low price (after all, they current holders would have to return them to the Commission if they don't). Then, LWIN could request additional build-out waivers as they have for some 38 or their current licenses! LWIN can show the Commission that they have every intention to build out those licenses, as they are currently doing!
PCSTEL |
