SIZE PREVAILS IN FCC AUCTION : LION'S SHARE OF WIRELESS LICENSES GO TO ASIAN GIANTS; SMALL FIRMS GET CRUMBS.

Byline: Edmund L. Andrews The New York Times

It was billed as one of the federal government's biggest small-business programs in history, a chance for corporate have-nots to become players in the booming business of wireless communications.

But Monday, two years and $10.22 billion later, as the Federal Communications Commission concluded a special auction of wireless licenses reserved for ``small business,'' it looked more like an investment program for Japanese and South Korean industrial conglomerates.

Five companies, four of them backed heavily by Asian corporations, bid more than $8 billion among them and are poised to walk away with a batch of licenses for geographic markets covering more than two-thirds of the United States' population.

One company alone, an eight-month-old entity called Nextwave Communications Inc., bid more than $4.2 billion to capture licenses covering nearly 40 percent of the population.

Well over half of Nextwave's money has come from Sony Corp. of Japan and four big Korean companies. And the South Korean government, which has a large stake in one of them, could end up owning 10 percent of Nextwave.

FCC officials have contended that no winner will be allowed to exceed foreign-ownership rules. And officials say the auction will benefit the U.S. public by bringing a group of strong competitors into the market for the next generation of wireless technology, called personal communications services, which will link hand-held computers, electronic notebooks and advanced two-way paging devices.

``Now we have at least five major additional players,'' said FCC Chairman Reed Hundt. ``That's incredible. That's wonderful.''

But many small U.S. businesses, particularly ones owned by minority groups, are grumbling that the auction left them with little more than the crumbs on the table. And at least one disgruntled bidder is vowing to sue the Federal Communications Commission and Nextwave.

Nextwave's own financial disclosures to the government indicate that foreign companies could acquire up to 28 percent of the company, which would exceed the current 25 percent foreign-ownership limit for holders of United States communications licenses.

That has prompted Go Communications Inc., in Alexandria, Va., to accuse Nextwave of being the instrument of a ``cabal'' of big foreign and U.S. corporations.

Nextwave executives insist that they intend to comply with the federal rules. But even those who assume that Nextwave will obey the law say the auction failed to live up to its initial promise for small businesses and minorities.

``This is an opportunity missed, a most important opportunity missed, and I don't think it will ever be recovered,'' said Patricia M. Worthy, professor of communications law at Howard University in Washington, who advised several African-American-led companies participating in the auctions.

Hundt, however, argued that the auction had enabled nearly 100 new companies to enter the wireless industry, even if some will operate in only one small market. ``I look at this as a huge success,'' Hundt said.

Whatever one's view of the public-policy implications of the outcome, the winning bidders in this ``small'' company auction, will spend more than twice as much, on average, as telephone giants like AT&T and Sprint paid for similar licenses in a personal communications services auction last year. In that auction, two licenses were awarded for each market; this time there was only one for each market.

Part of the high-octane bidding stemmed from the fact that companies in Monday's auction can pay for their licenses over 10 years, which cuts the effective price by one-third to one-half. Last year's auction required winning bidders to pay the full amount almost immediately.

But that hardly explains the bidding frenzy. The license for the New York metropolitan area, which drew the single biggest bid, sold for $994 million to Nextwave Communications - nearly three times what Sprint paid last year for a New York license.