FCC Fines Wireless Company $100,000 in Auction Case

Given the upcoming auction of FM frequencies in November, it may behoove participants to heed this story.
The FCC has fined Northeast Communications of Wisconsin $100,000 for collusion during an auction of wireless frequencies in 2002.
Northeast and another bidder, Star Wireless, were applicants for 734 of the same geographic license areas in the auction of lower 700 MHz licenses. During the auction, the agency said, Patrick Riordan, a shareholder, officer, director and authorized bidder for Northeast, spoke by phone to David Behenna, Star’s authorized bidder and the president of Star’s operating company, PCSGP. The agency says they spoke about bidding strategy, a violation of the anti-collusion rule.
In their reply, Northeast said Riordan told Behenna Northeast had not made the required upfront payment and could not bid in five Wisconsin markets in which licenses were to be auctioned. Northeast argues that since it was not a bidder in those markets, it was not subject to the anti-collusion rule. The company also said the commission’s interpretation of the rule was too broad. Northeast said it accidentally violated the rule.
The FCC says it’s made clear repeatedly that bidding applicants for licenses in the same areas are prohibited from sharing any information about bids until after the down payment deadline. This holds true whether the applicant is qualified to bid or not, says the agency.
The commission let the fine stand and penalized Star the same amount in an earlier action.