THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, July 29, 1994 TAG: 9407290528
SECTION: BUSINESS PAGE: D01 EDITION: FINAL
SOURCE: BLOOMBERG BUSINESS NEWS
DATELINE: WASHINGTON LENGTH: Medium: 91 lines
Nearly 300 bidders turned Thursday's second auction of the radio spectrum into a gleeful spectacle that pulled in $195 million for the government.
All four channels set aside for Hampton Roads were sold Thursday during the Federal Communication Commission's second auction of licenses for interactive television.
Interactive TV is described as a high-tech mix of convenience and button-pushing that would allow a hungry viewer to order pizza by clicking a gadget when an ad appears on the TV screen. The viewer could also shift cash into a bank account and fill out a loan application.
One winning bidder paid $1.4 million for a South Hampton Roads license and $1 million for another on the Peninsula. Another winning bidder spent $850,000 for a South Hampton Roads license, while a Peninsula license went for $600,000, the FCC said.
The winning bidders declined to identify themselves, and the FCC said it won't release their names until next week.
The interactive TV auction, to be completed today, is the FCC's first to be conducted by the open outcry method. Still under way is a silent auction for a radio spectrum for advanced paging services, with bids submitted on computer screens. Bids there - where 10 national licenses are offered - have reached $588 million, about 12 times more than the FCC projected.
The auctions this week - the first time the U.S. has sold space on the radio spectrum - could fetch the government $1 billion.
Thursday's auction of interactive TV channels began with FCC chairman Reed Hundt himself banging the gavel and Memphis auctioneer Larry Lantham chanting, ``Let's start it off. Do I hear $50,000?''
Cries that sounded like a bingo hall stuck in a Chicago futures trading pit resounded as Lantham's assistants - a pair of blond twins - ran to identify bidders who raised their hands.
Two interactive video licenses are for sale in each of the nation's 297 urban and rural markets. High bids Thursday ranged from less than $100,000 to more than $4 million for cities like Miami. The average channel price was $654,000.
In South Hampton Roads, the firm that won licenses for both South Hampton and the Peninsula was owned by a female or minority, the FCC said.
The FCC chopped 25 percent off the winning bids submitted by women and minorities to help them win. Ralph Haller, chief of the FCC's private radio bureau, said minorities accounted for 33 percent of the winning bids and women 45 percent. Small businesses made up 92 percent of the winners.
Bidders saw risks Thursday because it's not clear what kind of services will emerge in wireless interactive TV. The FCC has placed few restrictions on what a license holder can do with interactive TV.
``The idea is to let them build it,'' said FCC public radio bureau official Robert McNamara.
The stakes for the interactive video licenses aren't as high as at the other auctions up the hall at the Omni Shoreham hotel in Washington, where the FCC is selling licenses to use radio spectrum for advanced paging services.
With that auction in its fifth day, more than a dozen companies have pushed bids to a total of $569 million. The highest bid for a single nationwide paging license was $77 million. Those licenses will let winning bidders use certain parts of the radio spectrum to offer more advanced paging and messaging services.
Even the high-stakes bidding for nationwide paging, however, is expected to pale in comparison to the FCC's ultimate auction late this year of personal communications services licenses. About 2,000 PCS licenses, which will be used for a new type of wireless phone service, will be sold. Analysts have predicted that sale will fetch the government anywhere from $10 billion to $40 billion. MEMO: Staff writer Dave Mayfield contributed to this report.Staff writer Dave
Mayfield contributed to this report.
ILLUSTRATION: Local Winners
The FCC won't ID the high bidders. But it will say that:
One bidder bought two:
$1.4 million for a South Hampton Roads license
$1 million for a license on the Peninsula
Two other bidders bought:
A license in south Hampton roads for $850,000
A license on the Peninsula for $600,000
KEYWORDS: BROADCASTING RADIO INTERACTIVE TV
U.S. FEDERAL COMMUNICATIONS COMMISSION
by CNB