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Some of the biggest names in wireless will be bidding in this week’s Federal Communications Commission spectrum auction, but you wouldn’t know it from the list of companies registered to participate. As often happens at FCC auctions, some players have chosen to mask their involvement by bidding through shell companies. Leading the list of shadow bidders is Craig McCaw, the billionaire wireless pioneer who made his fortune selling his cellular telephone company to AT&T in 1994. McCaw is 49.9 percent owner of ConnectBid. The 50.1 percent owners are an old pal of McCaw’s, Steve Countryman, and Countryman’s business partner Joseph Gaskins. “McCaw has generally bought a seat at the table in case there are bargains to be had,” says Bob Ratliffe, spokesman for McCaw’s investment fund Eagle River. McCaw now runs Teledesic, a high-speed satellite Internet service that’s still in the planning stages. Some former McCaw employees are also lurking in the shadows. Qualified bidder 3DL Wireless is headed by David Hsiao, formerly of McCaw’s Nextlink Communications, and David Hamilton, formerly of McCaw Cellular. They now run Burst Wireless, a high-speed wireless Internet service just getting off the ground in Washington State. They’ll be competing against big carriers such as AT&T Wireless, Verizon and Nextel to win some of the 422 PCS wireless telephone licenses up for auction. The auction starts Dec. 12 and runs until bidders stop raising their bids. The process typically takes at least a month. Recent wireless spectrum auctions in Europe raised astronomical prices — more than $45 billion in Germany and $35 billion in the U.K. — but U.S. analysts predict less than $20 billion will be bid at the FCC auction. The horde of shadow bidders could heat up the bidding, however. “The big virtue of an auction is that it allows surprises to happen,” says John McMillan, a professor at Stanford’s Graduate School of Business, who helped the FCC design the auction process. “Fundamentally, it reveals information about which firms can make best use of the spectrum.” SBC Communications and BellSouth, among the largest wireless operators in the country, will be bidding through a company called Salmon PCS. Having given majority control to a much smaller company, Crowley Digital Wireless of Chevy Chase, Md., the Bells are eligible to bid on 170 of the licenses that are reserved for new or smaller companies. AT&T is bidding on its own, but also has a joint venture with some Native-American Alaskan companies called Alaska Native Wireless to go after the restricted licenses. Some wealthy New Yorkers will be bidding as Northcoast Communications. The Dolan family, owners of cable television company Cablevision Systems, the Madison Square Garden arena, the New York Knicks basketball team and the New York Rangers hockey team, control the Northcoast bidding vehicle. Mutual fund manager Mario Gabelli has his own bidding company, Theta Communications, in partnership with the owners of several small wireless companies. Several venture capitalists have qualified to bid as well. Richard Brekka, a former investment banker who is now the president of Dolphin Communications Partners, is eligible to bid on licenses covering some of the medium-size and smaller markets through a company called Whip. Virginia venture capitalist Mark Kington and his Columbia Capital Fund are backers of Bidder Black Crow Wireless. And the backers of Coloma Spectrum include the Boston-based VC fund Alta Communications. Then again, not everyone has chosen to hide. AT&T Wireless, Verizon, Sprint and Nextel all qualified using bidding vehicles that bear their names. Related Articles from The Industry Standard: U.K. Sets Date for Wireless Broadband Auction Rethinking Spectrum Mania Final German 3G Bids Total Over $45.49 Billion Copyright � 2000 The Industry Standard

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