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CELL PHONE SERVICE ON AREA RESERVATIONS HELD UP BY FCC

Sometimes, getting no signal on your cell phone is more than an inconvenience.

While driving along Center Road in the Allegany Indian Reservation, Leslie R. John saw a grass fire trickling over a field in the direction of some houses.

"I tried using my cell phone but could not get the reception needed, even though the car (power) adapter was plugged in," she said. John knocked on doors at the houses but found no one home. Finally she wound up calling the Salamanca fire squad from a pay phone, according to her account of the incident on file at the Federal Communications Commission.

Now, a Seneca business owner plans a cell phone company that would improve wireless coverage on three Southern Tier reservations. But the idea is on hold while the FCC freezes rights to the necessary frequencies.

Tribal Phone Service, headed by Seneca business owner Michael Jimerson, placed winning bids for four cellular licenses nearly two years ago. Two of the licenses would allow him to beam cellular waves throughout the Allegany, Cattaraugus, and Oil Springs reservations.

But because of disputes over the January 2001 auction, the FCC is holding onto the frequencies. It's also holding Jimerson's bidding deposit of $1,036,000.

"We followed all of the FCC's rules and paid them a million dollars just to be able to bid in the auction," said a statement by Jimerson, who owns Tribal Petroleum in Silver Creek. "They haven't given a penny back to us."

Now the FCC and Tribal Phone Service, or TPS, point fingers at each other for breaking auction rules.

Jimerson's company bid $13.8 million for four cellular licenses covering Jamestown, Olean, Binghamton and Elmira.

According to the FCC, Jimerson's company failed to come up with a required down payment of $2.76 million within 10 days after winning the auction. That failure invalidated TPS's bid and made it liable for default penalties, the FCC ruled.

But Jimerson's company says the additional money required to make up the down payment -- another $1.7 million -- would have been tied up anyway in the legal wrangling that has followed the FCC's problem-plagued auction. It asked the FCC to use its $1 million deposit as down-payment on the Jamestown and Olean licenses while the two other licenses were under dispute.

"For Mike, a million bucks isn't small change," said Raymond Quianzon, an attorney for Jimerson at Fletcher, Heald & Hildreth in Washington.

The company hopes that the public benefits of its plan will convince the FCC to make an exception to the auction rules. Despite a downturn in the telecommunications industry since the auction was held, a Seneca cellular service is still a viable idea, Quianzon said. The federal Rural Utilities Service, a unit of the Agriculture Department, issues loans to improve telecommunications on reservation land, he said, providing capital that probably wouldn't be available from private sources.

Cyrus M. Schindler, past president of the Seneca Nation, met with FCC officials in Washington last year to try to get the licenses unfrozen.

"Every day that this project is delayed is another day in which my people are missing the basic technology that is available to them," he said in a statement filed with the FCC.

TPS's petition to the agency is loaded with more than 30 pages of testimonials from Senecas, like Leslie John, who had problems when their cell phones died. One woman couldn't get a signal when her tire went flat, forcing her to walk more than two miles to the nearest phone. Another couldn't summon help when her daughter cut her foot on a playground.

Jimerson's company is asking the FCC to waive its rules and release the licenses for Jamestown and Olean. The money already on deposit is more than enough to cover the $494,200 down payment required for those two licenses, according to TPS.

"Their position has been it's all or nothing," Quianzon said of the FCC.

Now, the FCC is pondering Tribal Phone Service' renewed petition for a waiver, after initially rejecting the company's request more than a year ago.

In an order by Paul D'Ari, a policy and rules official at the FCC's wireless division, the agency said waiving the rules the way TPS wants is a bad idea. Requiring bidders to make their full down payment in a timely manner "protects the integrity of the auction process," D'Ari's decision said. Without the rule, speculators who lack the money to back their bids could buy licenses at inflated prices, hoping to resell them at a profit. That kind of speculation would drive up prices and discourage legitimate bidders, the FCC said.

The agency says Jimerson's company is liable for a minimum default penalty of $414,500. The penalty may rise based on the difference between TPS's bid and subsequent bids for the same frequencies when they go up for auction again.

But Quianzon said that the FCC has allowed bidders to split their down-payments on licenses before, providing precedent for Tribal Phone Service's request. The agency is acting cautiously now because of a storm of controversy over the January 2001 auction that TPS participated in.

"They just don't want to do anything involving Auction No. 35," Quianzon said.

The auction included licenses that the FCC had repossessed from a bankrupt company calledNextWave, a move that is being challenged before the U.S. Supreme Court. Last week, the FCC released bidders of the NextWave licenses from their $16 billion in bids for the contested frequencies.

e-mail: fwilliams@buffnews.com

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