Bring on Challenges
Federal Government Spectrum auctions can resemble high-profile auctions in the movies: full of intrigue, dirty tricks and revenge.Federal Government Spectrum auctions can resemble high-profile auctions in the movies: full of intrigue, dirty tricks and revenge. The story of the current auction will likely stretch on long after the last bid is made, as auction losers challenge the legitimacy of some of the participants. The auction ended Friday with net bids of $16.8 billion, with Verizon Communications by far the most prolific bidder, winning 113 licenses with bids of $8.8 billion. One challenger has already emerged, Allegheny Communications, a start-up run by paging and cellular phone entrepreneur Paul Posner. Allegheny originally sought to postpone the start date, asking the Federal Communications Commission to closely examine some of the participants who qualified to bid on certain licenses only available to entrepreneurs. While it has since dropped out of the auction, Allegheny plans to challenge some of the bidders later.
The FCC loosened its rules for this auction, enabling large incumbent operators to back but not "control" entrepreneurs. So, for example, while Cingular Wireless didnt enter the auction at all, it owns 85 percent of its partner, Salmon PCS, the third-highest bidder in the auction.