The Federal Communications Commission is taking steps to stamp out fun and games – and perhaps illegal collusion – during spectrum auctions. In the past, bidders occasionally signaled one another by submitting bids for extremely specific amounts that could be decoded by matching each number with a corresponding letter on a telephone keypad. In most cases the messages were harmless.
During a 1995 auction for 99 wireless phone licenses – which raised US$7.7 billion for the US Treasury – GTE was in a particularly tough battle with Sprint. During one round GTE bid $47,248,363 – the last six digits of which spell "Bite Me."
The FCC has long known that these messages were flying around, but the agency never gave them much attention until it received a complaint last year from a losing bidder, High Plains Wireless, that claimed some bids contained secret messages that amounted to illegal collusion. The complaint prompted a formal investigation by the FCC, which, in turn, prompted the Justice Department to open its own investigation. Both inquiries are ongoing.
If the Feds adopt a strict interpretation of the law – which seems unlikely – any coded message could be deemed illegal, forcing the government to reauction dozens of licenses and delaying the delivery of wireless services to the public. But while the investigation continues, the FCC hopes to head off any future problems by simply changing the rules of the game – players in all future spectrum auctions must submit bids in nice round numbers.
