Fcc Auctions Pcs Licenses For $7.7 Billion
You can’t see or touch them. In fact, no one seems sure what to call them.
But 21 giants of the communications industry say personal communications services (PCS) is the future of telecommunications, and earlier this week paid a whopping $7.736 billion to the Federal Communications Commission for rights to use them.
Two entities, WirelessCo. L.P. and Poka Lambro Telephone Cooperative Inc., paid a total $11.9 million for two licenses covering Spokane and Billings, Mont.
The WirelessCo partnership includes Cox Cable, as well as Sprint, Tele-Communications Inc. and Comcast Telephony. All but Sprint, a long-distance telephone service provider, are in the cabletelevision business.
WirelessCo was the most aggressive bidder in the auction that concluded Sunday afternoon. The partnership bid $2.1 billion for licenses in 29 markets.
Alan Collins, general manager of Cox in Spokane, said he could not comment on plans to follow through on the PCS license until he has confirmed the outcome of the bidding with the company’s Atlanta headquarters.
No information was available on Poka Lambro, which successfully bid on only one other market, Guam and the Northern Marianas islands.
The high-stakes auction for licenses for PSC lasted more than three months.
They will allow the winning companies to compete with cellular and paging communications companies in each of the cities in which it has a license. As a result, consumers can expect an explosion in growth in the types and number of services for portable communications devices such as hand-held telephones and paging systems.
Competition is expected to drive down prices for those services, and PCS phones will probably be smaller, less expensive but more powerful, said spokesmen for the winning companies.
“It’s huge,” said Robert Ratliff senior vice president of communications for AT&T. “We want to build a seamless network that our customers can use anytime, anywhere.”
One of the biggest winners was New Yorkbased AT&T, which captured 21 of the 99 licenses, including licenses in Cleveland (which includes the Akron-Canton area), Columbus and the Cincinnati-Dayton area. AT&T also nabbed licenses in Chicago and Boston.
AT&T now boasts a customer base of about 97 million customers, he said. “We just added another 107 million more potential customers,” Ratliff said.
Of the $1.684 billion AT&T paid, it spent $85.88 million for its Cleveland license; $22.29 million for one in Columbus and $41.93 million for the Cincinnati-Dayton license.
Chicago-based Ameritech landed two big licenses: one in Cleveland for $87 million, another in Indianapolis for $71.1 million.
Analysts predict that there will be 17.6 million PCS customers in the United States by the year 2004. There are currently about 25 million cellular users now, a number some say is increasing by as much as 28,000 a day.
The arrival of PCS providers will surely provide additional competition, said Robert Hatfield, director of marketing for GTE Mobilnet, who says the company is ready for it.
The licenses need to be auctioned off because, like radio waves, there are only certain companies that can use a given frequency. In order to foster competition in each city, the FCC auctioned off two licenses in each metropolitan area.