LMDS rejects on the block again

It's reauction season at the FCC. April 27 will mark the start of the local multipoint distribution service reauction, which puts 168 licenses on the block, many of which did not receive minimum bids the first time.

Few big winners from the last LMDS auction seem to be participating, unless they have applied under unrecognizable names. "What you saw with the previous players was they went for the pops," said Rick Lawrence, president and chief operating officer of Hardin and Associates. "What was left was small markets that others might like to play in-markets the big guys didn't want to bother building out or where the density wasn't sufficient."

Because the reauctioned properties are mainly small markets that weren't bid on originally, many are asking why companies care to bid on them now. One reason may be lower prices. While the first LMDS auction set a minimum bid of $2.25 per potential customer, or pop, this auction requires only 6 cents per pop, said Andrew Kreig, president of the Wireless Communications Association.

Some of the 99 applicants may also hope to sell their wins later to the bigger players-but that might be a risky plan. "The absence of the major bidders for these markets would tend to suggest that a sell-off by auction winners may not immediately be possible," Kreig said.

It may also be risky for small players to build out a concept that has yet to be proved. "What people don't want to do is have a vague idea that building out is good and spend a lot of money on it and go off on a tangent not supported by equipment manufacturers or the public," Kreig said.

But if they do decide to roll out, the services they'll offer likely won't be all that different from what the big players are talking about. "The propagation characteristics only allow you to do certain things. You're liable to see the same applications but on a smaller scale," Lawrence said.