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

To: gtc123 who wrote (960)	1/30/1998 8:03:00 AM
From: James Fink	Read Replies (1) \| Respond to of 2063

January 20, 1998 4:31 PM DOW JONES ONLINE NEWS FCC MOVES CAST SPOTLIGHT ON WIRELESS-UPSTART CELLULARVISION ÿ NEW YORK -(Dow Jones)- Shares of wireless-communications company CellularVision USA Inc. advanced after the Federal Communications Commission last week set minimum bids for next month's auction of licenses to offer so-called Local Multipoint Distribution Service, or LMDS, and defended the agency's decision to bar incumbent cable-television and phone companies from the auction. Investors aparrently saw the moves as underscoring the value of CellularVision's pioneer status in the auction. CellularVision competes with cable and satellite companies by using radio frequencies to transmit signals to an antenna and set-top box that, in turn, converts the signal to video or data. Shares of Cellularvision (CVUS) were up $1.313, or 22%, at $7.313 at the close of heavy trading Tuesday. The shares had reached as high as $7.375 earlier in the day. Volume was heavy at 170,800, compared to average daily volume of 51,000. After developing LMDS, CellularVision used the technology and its chunk of the radio spectrum to offer cheap wireless cable service to parts of New York City. Now the company is going after the wireless industry's holy grail. With its huge swath of bandwidth, the company hopes to offer subscribers a package of wireless telephone, cable and Internet service. Scores of phone and cable companies want to present such a wireless bundle to consumers. No wires means less infrastructure to build, cheaper service - and more convenience for the users. It also can mean fatter bandwidth, permitting more cable channels and ultraspeedy Internet service. That's why many experts are intrigued by CellularVision's potential and many firms want in on the FCC's Feb. 18 auction of LMDS licenses. The FCC is set to sell nearly 500 licenses to use the LMDS spectrum across the country. Despite the auction, CellularVision will be the only licensee in New York City because of its pioneer status. Some investors had been concerned that the FCC would once again delay the auction. In November, the FCC delayed a Dec. 10 LMDS auction so companies could line up more financing. Cable and local-phone companies last week urged a federal appeals court in Washington to overturn the FCC's decision to bar them from acquiring LMDS licenses in the auction. The FCC said the intent of ban is to increase competition. Winners of the LMDS licences are expected to have enough bandwidth to compete with existing cable operators. Tuesday was the application deadline for bidders who want to take part in the auction. The FCC last week set minimum opening bids based on the population of license areas. CellularVision's pioneer license covers the five boroughs of Manhattan and three surrounding counties, Westchester, Rockland and Putnam. Right now, though, the company faces a host of challenges. Competing technologies are piling up, while potential investors are raising conflict-of-interest questions about a supplier relationship. The company also has had problems meeting certain ambitious predictions on distribution. CellularVision got its start in cable in the early '90s, when the FCC granted the company free access to a previously untapped piece of the radio spectrum. Other companies offer wireless cable, but in other parts of the spectrum. In 1992, CellularVision used that spectrum and LMDS to go up against cable companies in New York City. The service offered as many as 49 channels at a lower price than wired offerings. Many customers say the picture quality is about the same as regular cable. LMDS operates with small, flat antennas - or cells - that communicate with larger antennas mounted on towers. Critics contend LMDS is restricted by a need for cells to have a line of sight to a transmitter. The company says it has addressed this problem, which is common among other wireless and satellite technologies, by adding repeaters, or cells, that can bounce signals several times to get to where they're going. But, in repeating, signals lose some of their audio and video quality. Several wireless companies - some using LMDS's sister technology, MMDS, or multichannel multipoint distribution system - are working on digital systems for two-way cellular transmission of voice, video and data. CellularVision last year signed an agreement with Nynex Corp., which last year merged with Bell Atlantic Corp., that allows it to resell phone service to customers in the Baby Bell's operating area. Manuel Asensio, an analyst at investment firm Asensio & Co., said CellularVision's license is the most valuable LMDS license in the country because its area has the highest population concentration. However, the company's stock has been "grossly undervalued" because investors don't realize the potential of that license, Asensio said. "It's a brand new industry that people aren't aware of," he said, but after the FCC auction, scheduled for Feb. 18, investors can put a specific dollar amount on CellularVision's LMDS license.