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Technology Stocks : CellularVision (CVUS): 2-way LMDS wireless cable. -- Ignore unavailable to you. Want to Upgrade?

To: Hiram Walker who wrote (790)	12/28/1997 5:07:00 PM
From: James Fink	Read Replies (2) \| Respond to of 2063

The FCC is not stupid. It is not going to flood the auction market with spectrum in the 40-50 GHz band in the same year it is auctioning off LMDS spectrum in the 28 GHz band. In order to maximize revenues from the LMDS auction, I predict that the FCC will make it perfectly clear that no other such spectrum will be offered for sale in 1998. The FCC has already stated that additional auctions are a very "low priority." If companies sit out the LMDS auction, they will regret it because they will be waiting a very long time before similar spectrum is made available. I think the complaining by potential bidders is just a bluff to force the FCC to auction off LMDS on a nationwide basis, rather than on a BTA-by-BTA basis. The FCC rejected a nationwide licensing approach in the PCS context because it would eliminate competition, and they will not change the LMDS auction rules for similar reasons. Once companies realize that the FCC cannot be rolled, they will participate in the auction.

To: Hiram Walker who wrote (790)	12/28/1997 6:25:00 PM
From: Bernard Levy	Respond to of 2063

As the auction gets nearer, the players are all throwing some smokescreen to optimize their strategic position. Let's review the players: a) The broadband wireless telephony and data carriers: Winstar and Teligent, which are already all set with their licenses in the 38Ghz and 24Ghz bands. Winstar got its licences cheaply before there was much interest in the 38Ghz band, and TGNT got them under extremely dubious circumstances which are currently being investigated by Congress. b) The wannabe LMDS operators: CVUS, Webcel, WaveLink (they just got a Canadian license). c) The long distance carriers: ATT, Sprint, MCI, independent carriers such as GTE, and foreign carriers such as British Telecom. d) The RBOCS. e) The cable companies. They are all involved because LMDS involves a combination of local telephony, broadband data, and wireless cable TV. The one feature of LMDS we should all realize is that it will require gigantic capital costs, in the order of a few billion dollars, to set up a nationwide LMDS network. Only ATT, and perhaps Sprint, GTE, or foreign phone companies such as British Telecom have pockets deep enough for that. Among existing players, Winstar is the company which is the closest to a nationwide network. However, their cash burn is large, and it seems their strategy is ultimately predicated on being taken over at a high stock price (the posters on the WCII thread are all hoping for a takeover price in the $40-$60 range) by ATT. For this strategy to work, Winstar has to make sure that no viable competition emerges during the next 2 years either from TGNT or from new LMDS operators. This is why Ackerman, the Winstar vice-president, is trying to create as much doubt as possible on the success of the LMDS auction. From the point of view of a long distance carrier such as ATT or Sprint, the optimal auction would be one where there would be nationwide licences of 400MHz each up for grabs. This would knock out all the small companies, such as CVUS, Webcel, etc... and avoid the painful process of having to put together a network from balkanized licenses. This is why the long distance carriers are complaining about the format of the LMDS auction. All these comments are transparently self-serving. The FCC LMDS license auction is really set up from the point of view of the wireless cable TV and video on demand model, wich is locally based. Whether, the FCC is right remains to be seen, but the intent is clearly to foster greater competition with cable TV operators. My guess is that the big players such as ATT will ultimately be able to scoop up all the smaller players (WCII, TGNT, CVUS) when the cash crunch starts to bite. The name of the game here is to sell out at a good price. However, the big companies know that and will be patient. Concerning CVUS, I hope they will be able to take advantage of the small business discount awarded by the FCC for the LMDS auction. They need: a) a partnership with one of the big long-distance operators, b) an equipment partnership (presumably with Phillips, since Phillips holds already some equity in CVUS). In any case, the LMDS auction should be exciting. It is not every day that 1GHz of bandwidth becomes available. Incidentally, the following two books contain interesting analyses of LMDS and broadband wireless: a) Broadband Residential by George Abe, published by Cisco Press. It has a whole chapter on LMDS, which discusses its strengths and weaknesses quite fairly. b) Wireless Computing by Ira Brodsky.