FCC auction designed to favor little guys threatens to sink some; payment terms for licenses were easy, so firms bid billions they didn't have; looking for the cheap 'pops'
Article Abstract:
Numerous companies that purchased licenses from the FCC in an 1996 auction are discovering that they cannot make their payments. The auction for wireless communication services such as telephone and paging was hailed as a successful venture when it took place, bring in an impressive $10.2 billion. The FCC's plan was to help smaller companies enter the wireless market by offering them an installment plan. Unfortunately, the easy terms resulted in the bidding becoming artificially inflated, which scared away the Wall Street investors. Bidding quickly escalated to unexpected levels when several companies attempted to purchase licenses for the same geographical areas. Most of the companies were able to make only small down payments and planned to raise the additional money through spectrum.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1997
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Cellular-phone industry is about to be shaken up again; possible venture by Bell Atlantic, Vodafone would rival AT&T, Sprint
Article Abstract:
Directors of Bell Atlantic Corp. and Vodafone AirTouch PLC are expected to unveil a joint venture that will combine their cellular phone networks on the East and West Coasts and in Europe. The venture would serve 20 million wireless customers, and would compete with other large firms like AT&T Corp., Sprint Corp. and Nextel Communications Inc. The joining of East and West Coast wireless assets may allow the firms to eliminate roaming fees, which would give them an advantage over AT&T and Sprint. Vodafone will benefit greatly from having access to the U.S. population, which represents the world's largest market in wireless communications. The largest challenge facing the joint venture will be that of creating seamless cellular telephone service between Europe and the U.S. Europe operates on one single digital standard, but the U.S. still operates on three different standards. In addition, Vodafone's digital networks in Europe are not compatible with the digital networks run by Vodafone and Bell Atlantic in the U.S.
Publication Name: The Wall Street Journal Western Edition
Subject: Business, general
ISSN: 0193-2241
Year: 1999
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