Two Top Bidders on Interactive TV Licenses Are Probe Targets : Regulation: FCC source says Sun Valley firm and another are under investigation for claims that entitled them to discounts.

A Sun Valley company and another firm that were the two largest bidders in the Federal Communications Commission’s recent blockbuster auction for interactive television licenses are the subjects of criminal investigation, according to a well-placed source.

Interactive America Corp., which lists for its headquarters the address of a ramshackle house in Sun Valley with miniature horses in the yard, submitted the second-highest bid in the July auction. The largest came from Commercial Realty St. Pete Inc. of St. Petersburg, Fla., whose bid of about $40 million was reduced to about $33 million with the discount.

The investigations in both cases focus on the two firms claiming to be female-owned small businesses and thus qualified for discounts on their bids, the source said.

It was the nation’s first sale of licenses to market interactive services such as home shopping and home banking over the airwaves. The sale drew more than $215 million in bids, far more than expected.

Interactive identified itself in the FCC application as a woman-owned small business, thereby qualifying for a $3.3-million discount on the $17 million it bid for 15 separate licenses. But the woman’s identity has not been revealed, and Interactive America--along with several other winning bidders--has not made the down payment on the license that was due last month.

Interactive America President Christopher Pedersen could not be reached for comment. He has previously refused to provide any details on the company’s history or financing, but he has said the company did not withhold its $1.37-million down payment because it lacked funds.

He said the down payment was withheld because the company objects to the FCC’s approval of only one supplier of interactive television equipment. Without other suppliers, he contends, it would be impossible to meet the deadlines for building the networks.

Earlier this week, the FCC said it was launching an investigation into possible misrepresentation by some companies regarding their claimed status as minority- or woman-owned. The agency did not identify the firms, though Commercial Realty St. Pete has been cited in news reports.

The FCC also said it is looking into whether some of the defaulting firms might have entered the bidding with no intention or ability to pay.

Some of these companies might have become caught up in “auction fever” and bid higher than they intended, but others might have used the auction process as a means to abscond with investors’ money, the source said.

The investigation will also target bidders who may have encouraged other buyers to default on their payments, the FCC has said. Commercial Realty St. Pete is also under investigation on that score.

The FCC inquiry, similar to a grand jury investigation, involves subpoenaing witnesses and documents. When the process is complete, the agency may refer its findings to the Justice Department, possibly resulting in criminal indictments.