FCC NEARS DECISION ON 700 MHZ AUCTION DATE
FCC appeared to be weighing at least brief delay for one upcoming 700 MHz auction, although details still were in flux at our deadline and final decision on whether there would be postponement still wasn’t clear. Staffs of Sen. Stevens (R- Alaska), House Commerce Committee Chmn. Tauzin and Senate Commerce Committee Chmn. Hollings (D-S.C.) met late Wed. on potential compromise scenarios, although no progress appeared to have been made, sources said. Several industry observers also said that because FCC decision was coming so close to May 28 deadline for upfront payments in auctions, it could approve short delay in payment deadline. Among possibilities Commission appeared to be mulling Thurs. was holding lower band auction on time for 700 MHz and allowing short delay, possibly of 6 months, for upper band. One source said that several companies as of late Thurs. already had made wire transfer payments to FCC to participate in lower band auction.
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Another possibility that was subject of speculation was short delay in both bands, which was seen as providing enough time for Commission to still meet Sept. statutory deadline for completion of bidding while giving additional time to Congress to craft agreement. Holding lower band auction on June 19 as planned and postponing upper band bidding would be simpler compromise than one floated by office of Sen. Ensign (R-Nev.), who is co-sponsoring bill with Sen. Kerry (D-Mass.) that would postpone auctions indefinitely, similar to measure by Tauzin that recently passed House. Ensign-backed compromise would pull out C-block licenses from lower band and hold upper band auction later while keeping lower band auction date (CD May 20 p6). Compromise that would hold lower band auction on time and postpone upper band auction would be less disruptive to short-form application process for prospective bidders than Ensign compromise, industry source said.
Several prospective bidders met with FCC officials Wed. on status of auction decisions. Officials apparently indicated 25 bidders had filed to participate in Ch. 60-69 auction and 175 for Ch. 52-59. Identities of bidders won’t be released until FCC issues public notice on short-form applications accepted for filing. Typically that notice is issued roughly 48 hours before start of auction so applicants could correct minor errors or supply more information, source said. Officials apparently were weighing factors such as how long potential delay in auctions could be while still meeting Sept. 30 statutory deadline for lower bands. (FCC already has missed Sept. 30, 2000, deadline for depositing proceeds in U.S. Treasury for Ch. 60-69 spectrum).
If Stevens were to provide signal that he was willing to reach accommodation with Tauzin on auction timing, that could provide comfort level for FCC on at least short delay, although several sources said that wasn’t only factor agency was considering. Pending before Commission has been application for review filed by CTIA challenging Wireless Bureau decision to retain date. Last week, CTIA and FCC officials met with several Hill aides at Commission to discuss “issues related to the procedural steps that would be required if all or part of the 700 MHz spectrum auctions were delayed past the current scheduled auction date of June 19.” Included in meeting were House Commerce Committee Senior Counsel Howard Waltzman and Bryan Cunningham, telecom legislative assistant to Ensign, according to ex parte filing.
“A 4-to-6-week delay would be great, but we would be a lot happier with a 6-month delay until things sort out,” Leap Wireless Senior Vp Daniel Pegg said. “The FCC and the government coffers would probably a healthier response in that time frame than they are apt to find now.” Leap filed short-form application with FCC to participate in both auctions but said it hadn’t decided whether to make upfront payments to take part in bidding. Leap said filing “preserved its option” to do so. Resources that carriers must devote to auction planning before start of bidding are “significant,” Pegg said. Besides money required for upfront payments, it takes “human resources” of financial planning and bid strategy. “This on-again, off-again, maybe tomorrow [situation] is disruptive, especially when those people could be focused on other things,” Pegg said.
Tauzin spokesman Ken Johnson said Stevens had “pitched a compromise” to spectrum controversy, but declined to give details. Johnson said Tauzin, Hollings and Stevens staff did meet Wed. to discuss telecom issues, but didn’t elaborate on specifics. He said staff of Commerce committees routinely meet to discuss wide range of telecom issues. Johnson emphasized that Tauzin was anxious to discuss potential solutions on spectrum issues. “He’s made it clear that he’s willing to listen to any proposal,” Johnson said. Stevens office had no comment, spokeswoman said.