MULTICHANNEL NEWS
VOLUME 19 NUMBER 6 FEBRUARY 9, 1998
LMDS Auctions Ready to Roll
By FRED DAWSON
With 190 entities of every description signing on as potential bidders for local multipoint distribution service spectrum, wireless broadband appears to be gaining ground as a factor to be reckoned with in local-access competition.
The list of companies filing applications to participate in auctions slated to begin Feb. 18 includes a smattering of Bell operating companies, cable MSOs, long-distance companies and major players in wireless cable, as well as a host of smaller entities from the ranks of competitive local-exchange carriers, cellular companies, independent telcos and start-ups.
"It looks like this is going to be a very healthy auction," said Elizabeth Lyle, spokeswoman for the Federal Communications Commission's Wireless Telecommunications Bureau.
Lyle said the commission wasn't ready to disclose the actual sums committed in bid prepayments that were made last Monday. But she emphatically disputed rumors in Washington, D.C., that the upfront payments were disappointing.
Asked whether there was any chance that the FCC might delay the auction by 60 days, as requested by start-up WebCel Communications Inc., in the interest of generating more financial support, Lyle replied, "We see no reason not to proceed."
WebCel -- which successfully pleaded last year, along with others, for a delay -- filed a letter in late January requesting another delay. The company argued that issues that it had expected to be resolved by then still weren't, including the extent to which LECs might invest in entities like WebCel.
But another attorney representing other start-up interests, who asked not to be named, said, "At this point, it would probably take intervention from Capitol Hill to slow this down."
It was difficult to ascertain the true identity of most entities listed in the FCC's notice of who filed to participate in the auction, insofar as many well-known companies often used new names for their LMDS units. Linking such names with ownership required perusal of records on file at the commission.
For example, Teligent LLC, the holder of licenses nationwide at the 24-gigahertz spectrum tier, filed to participate in the LMDS auction as AUCO Inc. And wireless magnate Craig McCaw -- with major stakes in Nextel Communications Inc., Teledesic Corp. and other entities -- was another presence in the LMDS filings, under the company name NextBand Communications LLC.
More easily identified major players included SBC Communications Inc., filing as Southwestern Bell Video Services Inc.; U S West Communications Inc.; and Comcast Corp., filing as Comcast LMDS Communications Inc. At least two wireless cable leaders were in the lineup -- CS Wireless Systems Inc. and American Telecasting Inc. And among the many CLECs, one notable standout was RCN Corp., filing as RCN Telecom Services Inc.
The wireless-broadband sector was not waiting for LMDS to get off the ground before moving to the fully interactive point-to-multipoint platforms that promise to offer new competition to wireline carriers.
As preparations for the auctions continued, Teligent and WinStar Communications Inc. pushed ahead with previously announced plans to launch these new capabilities, which support delivery of all types of fixed services from radio transmitters over distances of two to three miles.
WinStar, holder of 38-GHz licenses across the country, is testing its new point-to-multipoint platform in Washington, D.C., this quarter, with plans for commercial rollout in unspecified locations starting in the second quarter.
The company, with plans to operate as a CLEC in 30 markets by year-end, has also registered as a potential LMDS bidder, having determined that point-to-multipoint will be the "cornerstone technology" for its infrastructure, a spokeswoman said.
Teligent, starting from scratch without the base of point-to-point operations and switches that WinStar now has in place, plans to deploy the new point-to-multipoint gear in 10 cities this year: Austin, Texas; Chicago; Dallas; Denver; Houston; Los Angeles; Orlando, Fla.; San Antonio; Tampa, Fla.; and Washington D.C. Teligent is installing the first four of 10 class 5 switches from Nortel that it plans to use in these markets, said Teligent CEO Alex Mandl.
The head starts by WinStar and Teligent in the use of new point-to-multipoint wireless systems to support transmission of fixed voice, video and high-speed-data services to business customers pose a major challenge to LMDS players, especially since both companies obtained their spectrum under previous rules without having to pay auction fees.
Teligent's LMDS bid, in particular, prompted a rueful comment from the CEO at one competitor, who has challenged the FCC's procedures in awarding the start-up its slots at 24 GHz.
"Made only in Washington," the executive said, asking not to be named. "Teligent, the beneficiary of a massive spectrum windfall, qualifies for a 45 percent discount as a designated entity in its bid for LMDS spectrum."
FCC officials are reviewing the Teligent spectrum proceeding, as a number of petitioners have requested. Sources familiar with the matter said House Commerce Committee chairman Thomas Bliley's (R-Va.) staff was seeking information on the politically charged question in an effort to determine whether allegations of improper influence in the Teligent spectrum grant merit a formal inquiry.
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