By MARIO C. AGUILERA San Diego Daily Transcript Staff Writer
Some call it the Oklahoma land rush for the 21st century. Others say it's a modern-day California gold rush.
Billions of dollars and the future direction of telecommunications will be at stake when the Federal Communications Commission auctions off broadband licenses in two weeks.
Based on the FCC's inaugural auctions in the summer and fall, which brought in more than $1 billion, the auction for personal communication services Dec. 5 should bring in even more money. Possibly much more.
And when the bidding officially gets under way, two San Diego entities will have a hand in how it all shapes up.
UCSD professor John McMillan was retained by the FCC to help design the auction system while another local player, wireless giant Qualcomm Inc., will host a PCS TechForum for auction bidders next week.
Before the 1980s, the federal government simply gave away radio wavelength licenses through the administrative hearing process. Companies would file applications and plead their case with the FCC, which would decide which company was most deserving.
"While that was a boondoggle for the lawyers, it was largely inefficient for the government," said McMillan, in a mild accent drawn from his New Zealand roots.
McMillan, a professor of international economics at the Graduate School of International Relations & Pacific Studies, said that cumbersome method led to an unhealthy backlog of unassigned licenses. Congress searched for a faster process and decided on the lottery system.
As a mathematical economics and game theory expert, McMillan said that format also proved counterproductive because winners were not necessarily sincere in their effort to use the license. Often lottery winners would turn around and sell the license for a healthy profit.
McMillan recalls that a group called the RACDG partnership won the right to run a cellular telephone network in Cape Cod in 1989. The group, he said, then sold the license to Southwestern Bell for $41 million. In fact, the total value of the licenses given away in the '80s is estimated to be more than $45 billion.
With a deficit budget on the rise, Congress took note of the potential payload.
In September 1993 McMillan was hired as the onl