FCC stalls on LMDS auction: Delay gives other wireless carriers head start

The Federal Communications Commission's decision to push back the local multipoint distribution service auctions until Feb. 18, 1998, may anger potential bidders, but it shouldn't have a major effect on the market, according to industry observers.

The FCC said it wanted to let bidders take advantage of foreign capital, and it is giving bidders more time to find funding, setting a Feb. 2 deadline for down payments.

"Ultimately, two months is not a lot of time," said Daniel Ernst, an analyst with the Strategis Group. "What it's going to do, though, is increase the chance that the licenses will reach the value of their worth."

Previously, the FCC had expressed concern that bidders were having trouble lining up financing. With a new agreement from the World Trade Organization, however, foreign operators now may provide funding for bidders.

"The opportunity cost they're losing is fairly high," said Ernst.

Few potential bidders are talking for fear that publicizing their intentions will raise prices. Companies that have announced intentions to bid are taking the news in stride.

"The good news is that, hopefully, the commission won't delay it again," said Joe King, chief operating officer of US WaveLink, a Dallas-based company that will bid. "The bad news is that we hope they haven't opened a Pandora's box."

Indeed, WaveLink Chief Executive Officer Ed Frazier said the company intends to deploy an LMDS showcase system in Dallas with Bosch Telecom that will demonstrate the technology's ability to provide competitive local telephony, high-speed data and video.

Another wild card in the bidding is emerging with other broadband wireless players such as WinStar Telecommunications. Although not in the same band, the company recently got FCC approval to deploy point-to-multipoint technology that will dramatically reduce its costs and give it a more competitive service. The commission also lifted rules that limited the amount of spectrum that one company could hold.

Telephony has named Kathleen D. Cholewka Switching & Transmission Editor, covering core switching and transmission infrastructure technologies, news and business issues.

Cholewka's journalism experience in the telecommunications industry includes a one-and-a-half year tenure as WAN equipment editor for Data Communications magazine.

At Telephony, she will cover switching, data communications and access technologies, including DSL, asynchronous transfer mode and frame relay.

"Our editorial team is the foundation of Telephony's quality product. Kathleen's industry knowledge and editorial experience will bring added strength and value to our already strong editorial team," said Publisher Mark Hickey.

News Editor Sandra Guy added, "We are proud to welcome Kathleen, whose skills and excellent reputation in the industry acknowledge her work."

Cholewka graduated from Brooklyn College of the City University of New York with a bachelor's degree in journalism and English.