THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Wednesday, August 31, 1994 TAG: 9408310450
SECTION: LOCAL PAGE: D3 EDITION: FINAL
SOURCE: STAFF AND WIRE REPORT
DATELINE: WASHINGTON LENGTH: Medium: 68 lines
Federal regulators opened an investigation Tuesday into whether some companies acted improperly in their quest for new wireless licenses in the government's first auction of the airwaves last month.
The Federal Communications Commission acted after more than two dozen companies, including two based in Chesapeake, failed to make initial payments for ``interactive'' licenses.
Two companies - Commercial Realty of St. Pete Inc. in Florida and Interactive America in California - are believed to be the target of the probe, according to telecommunications attorneys, speaking on condition of anonymity.
FCC General Counsel William Kennard would not confirm which companies are under investigation. He said only that its scope involves ``at least two companies, and that may expand.''
Tal Shamgar, vice president of Phoenix Data Communications Inc. of Chesapeake, said he has not been notified that his company is a target and does not believe that it will be investigated. Phoenix is waiting for the FCC to decide whether to accept its request for an extension on a down payment for licenses in Hampton Roads, Richmond, Petersburg and Las Vegas, Shamgar said.
Officials of Chesapeake-based Gardner Productions, which didn't make its down payment for a license in Charlotte, couldn't be reached late Tuesday for comment. But a Gardner spokeswoman said previously that her company was likewise waiting for an FCC decision on an extension request.
Interactive video data licenses permit companies to offer an array of two-way video and data services, including letting viewers at home play along with their favorite game show.
The investigation will determine whether the companies misled the agency about either their financial or ownership status.
Some companies may have falsified information submitted to the commission about their ability to pay for licenses they intended to bid on, the commission said. Also, some companies may have falsely claimed to be minority- or female-owned to get special bidding preferences, the FCC said.
The investigation will look into whether one or more of the bidders encouraged other winning bidders not to make down payments to the government for their licenses.
Commercial Realty and Interactive America together represent about $5 million of the unpaid $8.6 million in down payments. The FCC said both companies had claimed to be female-owned small businesses, earning them a 25 percent discount on the licenses.
FCC officials, speaking on condition of anonymity, had told The Associated Press that Commercial Realty tried to coax other winning bidders not to pay.
Company officials acknowledged today that they were a target of the investigation, but said they did nothing wrong. ``I look forward to this action clearing the air and allowing the FCC to redirect its focus to the technical obstacles facing this industry,'' said James C. Hartley, chief operating officer of Commercial Realty.
A call placed to Interactive America on Tuesday was answered by a recording that the number had been disconnected. The number was listed on the company's filings to the FCC.
The FCC's options against wrongdoers include fines and referring the case to the Justice Department for criminal prosecution, Kennard said. MEMO: From reports by The Associated Press, Bloomberg Business News and staff
writer Dave Mayfield.
by CNB