Initial PCS Bids Taken; Total Expected to Exceed $10 Billion
With three bangs of his gavel, Vice President Al Gore opened the bidding Monday in the federal government’s eagerly awaited auction of licenses for new mobile phones, declaring that the technology will create a million jobs and transform the way Americans communicate.
The auction of 99 licenses to offer so-called broad-band personal communications services is the first step in a costly, high-stakes contest by some of the biggest names in telecommunications to bring a new type of wireless communications to the masses. The new services, expected to be launched in major markets within the next two years, will feature mobile communications devices that are smaller, cheaper and more powerful than existing cellular telephones.
As expected, Monday’s initial round of bidding was subdued, with none of the 30 bidders quickly separating itself from the pack with a huge wager. Bids totaled $380 million, with 39 of the 99 PCS licenses drawing no bids at all.
“There were no great surprises; it went pretty much as we anticipated,” said Roy Berger, a member of one of the wealthiest teams--the PSC Primco limited partnership made up of AirTouch Communications and three regional Bell telephone companies.
Despite the deep-pockets competition, at least one small company, Micro Lithography of Sunnyvale, Calif., held its own and emerged as the top bidder for two PCS licenses, with a bid of $20,000 for both.
More typically, bids were in the multimillion-dollar range, with American Portable Telecommunications bidding nearly $51 million for a single PCS license. The 99 licenses on the block are for regional markets, with smaller market licenses to be sold early next year. In the end, about 2,100 PCS licenses will be auctioned, with total proceeds expected to exceed $10 billion.
About $4 billion of the auction money has already been earmarked to reduce the federal deficit. But expectations are high that the bids will exceed that amount, and politicians at Monday’s opening quickly floated proposals on ways to spend the extra cash.
