Everything for a buck" might have been the slogan for the latest auction of wireless spectrum by the Federal Communications Commission. The agency's April sale raised US$13.6 million of an expected $1.8 billion - a 99.24 percent shortfall.
Anticipating returns similar to 1995's $7.7 billion PCS auction, Congress fast-tracked the sale so proceeds could be applied to the budget deficit. Then, the FCC fumbled its pitch by not stressing the strengths of the 2.3-GHz blocks, which are good for fixed wireless service. As a result, most big telecom companies didn't show. The few bidders who did failed to make the auction competitive. Licenses in Milwaukee and Minneapolis sold for a measly $1 apiece; Coloma Wireless walked away with a San Francisco license for $6.
"No one was moving in on the low bids," glows Scott Donohue of Coloma. "It was extraordinary."
The fate of future spectrum auctions now lies on Capitol Hill. But selling more spectrum when the PCS licenses have yet to be used, let alone paid for, is called "flooding the market." Communications companies go bankrupt, Congress gets stiffed, and consumers are left without choices.
ELECTRIC WORD
Spectrum Wants to Be (Almost) Free
