FCC Pushes Auction Winners to Honor Bids : Communications: Some who sought licenses are asking for extensions of their payment deadlines.
Federal regulators moved Friday to crush an organized effort by some winners of last week’s auctions of communications licenses to delay making good on their bids.
The Federal Communications Commission sent a strongly worded “alert” to tell all winners that there would be no exceptions to a 3 p.m. Monday deadline for making 20% down payments on their licenses.
The agency’s notice came after the winner of 20 licenses, a St. Petersburg, Fla., firm known as Commercial Realty St. Pete Inc., urged other winners to ask the FCC jointly to delay the down payment deadline.
The auctions, the first in federal history, won pledges of far more money than experts had expected. But the Treasury has yet to collect the money, and Friday’s action by the companies, many of which are small start-up ventures, reveal the uncertainties of this licensing method.
“We have concerns about technology and other obstacles which have surfaced since the auctions,” James C. Hartley, president of Commercial Realty St. Pete, said Friday in a statement.
Last week, companies pledged $214 million for 594 local and regional licenses that would allow television viewers to use home shopping, banking and other services.
On Tuesday, Hartley and his engineers visited the Reston, Va., firm Eon Corp., the only company developing the equipment that would be needed in the services, according to Eon President Michael Sheridan.
After the meeting, Hartley faxed a letter to other winners, complaining that Eon was far from ready to deliver the technology needed for the services, according to Greg McCauley of Philadelphia, another winner. He said Friday that between 50 and 60 other winners then expressed interest in making a joint request to the FCC for a payment delay.
Eon’s Sheridan on Friday denied that there would be any delays in the technology. It will be ready in six months to a year, he said.
“There’s a lot of unnecessary panicking going on,” he said.
When the FCC learned of the winning bidders’ actions Friday, it issued a warning.
“We understand that some winning bidders have been encouraging other winning bidders to delay their down payments,” the FCC notice said. “Encouraging other winning bidders to default would be an abuse of the commission’s processes and may violate the antitrust law or other federal laws.” On Friday, Hartley and the other bidders backed off.