Subject:
FCC's Hundt Pushes For Fast Resolution Of Wireless Debt Problems
Date:
Fri, 22 Aug 1997 15:22:13 -0700 (PDT)
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News Alert from Dow Jones Online News via Quote.com
Topic: At&T Corp
Quote.com News Item #3783883
Headline: FCC's Hundt Pushes For Fast Resolution Of Wireless Debt Problems
======================================================================
By Scott Ritter
Staff Reporter
WASHINGTON -(Dow Jones)- The nation's top telephone regulator is
pushing for a quick response to proposals from cash-strapped
wireless-communications companies that want the government to
restructure billions of dollars of debt they racked up buying licenses.
Federal Communications Commission Chairman Reed Hundt conceded Friday
that proposals he supports haven't won the backing of the full
commission. Still, Hundt said he's hoping to reach consensus on a plan
by the first week of September.
The FCC is mulling requests from several winning bidders who want the
government to restructure the billions of dollars of debt they incurred
buying the licenses in an FCC auction last year. Some 89 companies bid
$10.2 billion for rights to offer "personal communications service," a
next-generation wireless telephone technology.
The auction, called for by Congress, aimed to get wireless licenses
in the hands of small businesses and entrepreneurs. Auction prices
ballooned, lifted in part by favorable government financing terms, and
many of the winning bidders are now having trouble raising money to pay
for the licenses and build their new phone networks.
While crucial details need to be ironed out, Hundt told reporters
Friday that he supported proposals that would allow winning bidders to
return all or part of their licenses, which could then be reauctioned to
small companies. Rather than allowing companies to make installment
payments, winning bidders would be required to pay the full amount up
front.
Hundt said re-auctioning the rights would let the market determine
the value of the licenses. He estimated a new auction would raise
roughly $3.5 billion, a figure that included the $1.2 billion already
paid by bidders.
That's about half of the $6.5 billion the original auction is
currently valued at, net of installment payment and financing benefits.
The $3.5 billion price tags would be comparable to the bidding levels of
earlier PCS auctions that were open to big companies like AT&T Corp. and
Sprint Corp., Hundt said.
While many licenses in the so-called C-block auction fetched bids
much higher than those earlier sales, not all bidders paid inflated
prices, FCC officials say. Hundt said terms of the original auction
wouldn't likely change for bidders that were satisfied with their
licenses and the existing payment plan.
Indeed, only the auction's top six bidders paid substantially more
than companies paid in earlier PCS auctions, officials said. San
Diego-based NextWave Telecom Inc. topped the C-block bidding, offering
$4.2 billion for 63 licenses. Pocket Communications Inc., Washington,
D.C., was another big bidder. Pocket offered $1.4 billion, but has since
filed for bankruptcy protection.
Hundt said he is concerned that the licenses held by cash-strapped
bidders will be tied up in bankruptcy court. That could delay for years
the rollout of new wireless networks that promise consumers lower
calling prices and better technology.
Another concern: three of the FCC's four commissioners, including
Hundt, will leave the agency this fall. That could further slow the
commission's efforts.
Hundt said MCI Communications Corp. and General Wireless Inc.,
Dallas, have offered proposals that include many elements he favors. The
plans would essentially allow license holders to choose between keeping
their licenses, returning their licenses or returning just a portion -
perhaps 15 MHz -- of a 30MHz license.
Copyright (c) 1997 Dow Jones & Company, Inc.
All Rights Reserved. |
