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Technology Stocks : CAWS - Wireless Cable (New and Improved)
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To: wonk who wrote (5442)7/21/1998 11:43:00 AM
From: Zorro  Read Replies (1) of 5812
 
ww,

Your statements are correct. However, CAI's spectrum consists both of ITFS and MDS channels. ITFS spectrum, which accounts for up to 120 MHz per market area, can only be licensed (in most cases) to educational institutions. CAI can only utilize this spectrum by entering into excess capacity lease agreements with such institutions (the ITFS licensees). The transferability of ITFS channel rights is generally governed by the actual lease agreement and does not require prior FCC consent. Therefore, ITFS channel rights (not the licenses) can be pledged as collateral.

The same applies to most MDS channels where CAI is not the licensee. CAI leases the full capacity of such channels - having entered into lease/purchase agreements with the MDS licensees. These MDS channel rights (not the license) are also transferable without prior FCC consent and therefore can be pledged as collateral.

In the case where CAI is the MDS licensee (as in its BTAs), these channel rights (licenses) cannot be pledged as collateral due to the FCC ownership transfer issue. However, MDS operators commonly and conveniently set up separate holding companies as the licensee in order to facilitate pledging of their spectrum rights. I believe CAI has done this in most (if not all) its markets.

Z
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