With a $32.2-million bid, Verizon Wireless was the winner of a bankruptcy auction Monday for some of the assets of failed Oklahoma City-based Stelera Wireless.
Verizon and rival bidder AT&T vied for 18 Federal Communications Commission licenses for 3G and 4G wireless spectrum rights in Colorado, New Mexico, Kansas and Texas.
Bidding started at $19 million for the licenses, with AT&T and Verizon tossing out 69 competing bids over the course of the roughly two-hour auction Monday morning at an Oklahoma City law office.
During one particularly heated 28-minute portion of the auction, AT&T and Verizon bid against each other 52 times at $200,000 intervals, said Oklahoma City attorney Clay Christensen, who represents the debtor Stelera and also served as auctioneer.
“Nobody envisioned the numbers getting this high,” Christensen said.
Oklahoma City-based Stelera was founded in 2006 by former Dobson Communications Corp. President Ed Evans.
The company participated in a government stimulus program offered through the U.S. Department of Agriculture to improve high-speed broadband access in rural areas that was part of the American Recovery and Reinvestment Act of 2009. The USDA gave Stelera a $35 million business loan as part of the stimulus program.
Stelera filed for Chapter 11 bankruptcy in July, reporting $30 million debts against $18 million in assets.
Stelera still owed the USDA $24 million on its government loan when it filed for bankruptcy.
The proceeds of the auction will go to repay the USDA and Stelera's other creditors, Christensen said.
The company had about 7,000 customers when it ceased operations May, Christensen said.
“They could never get enough subscribers in rural America to make it economical,” he said.
Verizon wanted to purchase the FCC licenses to expand its 4G LTE network, said Robin Nicol, a spokeswoman for the company.
The sale must still be approved by a U.S. Bankruptcy Court judge and the Federal Communications Commission.
“We have a nationwide 4G LTE network in more than 500 markets,” Nicol said. “As people use more data services, you need to add capacity to your network. These licenses will allow us to add that capacity.”
Nobody envisioned the numbers getting this high.”
Oklahoma City attorney