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Technology Stocks : CellularVision (CVUS): 2-way LMDS wireless cable.
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To: Steven Bowen who wrote (1093)2/10/1998 3:51:00 PM
From: Bernard Levy  Read Replies (1) of 2063
 
Hi Steven:

Another way to do a back of the envelope computation is
as follows. If you read the FCC documentation regarding
auction procedures, you will see that bidders will be
expected to pay the difference between 20% of their winning
bids and their upfront payments just after the auction
closes. It appears reasonable therefore that the upfront
payments represent less than 20% of the total auction value.
So a worst case analysis would be that the auction will
bring in 2 billions (note that I am not even giving a cash
value to the discounts awarded to small businesses).
Assuming that NY is worth about 10% of this total gives
$200M (I believe that the total population in serviceable
areas is less than 100 millions).

By the way, I think that the San Francisco license
is likely to gather more interest than the LA license,
because of the high density of professionals who need
Internet access at home. I do not agree with earlier
comments on this thread indicating that LMDS is only
of interest for businesses. For all professionals,
ISDN lines have become the norm, and LMDS, ADSL, or cable
modems will deliver a much higher rate at a comparable
price. I hope that the NY license will be valued
based on the SF license (based on the high density
of investment professionals in NY, this would make sense).

Regards,

Bernard Levy
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