How to Protect Yourself: Investing in Wireless Cable
Source: The Florida Attorney General's Office
Wireless cable television uses microwave signals sent to a satellite, and then to cable boxes in homes. The signal operates via a line of sight transmission, making interference from hills, buildings, and other obstacles possible. The Federal Communications Commission awards licenses for wireless cable, known as Multichannel Multipoint Distribution Service (MMDS), through a lottery. If you are considering investing in wireless cable, you may be approached by application preparation services, and investment companies selling shares of wireless cable companies. Before you decide to invest in this new technology, please consider the following:
Know The Ins And Outs Of Winning The FCC License
The FCC awards two MMDS licenses in each market area, and each license is for 4 channels. The application fee is $155. The FCC must receive your application within 24 hours after it has accepted the first qualified application for a particular market. If there are competing applications, the winner of the lottery is selected randomly. The winner is awarded a conditional license if it survives challenges by lottery losers, and if it remedies any deficiencies in its application. A license is forfeited if the wireless cable station is not constructed and operational within one year. Application preparation services charge thousands of dollars for their services. Before using an application preparation service consider whether you need assistance at all, and if so, whether a lawyer may be better suited to assist you in completing the application process.
Consider The Suitability Of the Market Area
The fundamental question of whether you should apply for an MMDS license, or invest in a wireless cable company, is whether the geographic area being considered is suitable for this type of service. For example, small communities may not have enough of a population to support a wireless cable T.V. station, or there may be too much competition from standard cable television. In a hilly or mountainous area transmission may be too poor to generate enough subscribers to make the venture profitable.
Research The Company
Contact the Attorney General's Office and the Federal Trade Commission to determine if there are complaints or legal actions pending against the company. If the company is offering shares of wireless cable companies they may be subject to registration requirements with the Securities & Exchange Commission, and Florida's Division of Securities, Office of the Comptroller. Do not rely on agencies such as Chambers of Commerce or other business organizations where membership is based solely on payment of a fee.