Edited by Douglas Harbrecht

Trouble may be mounting for new entrants in the mobile-phone business. On Apr. 1, Pocket Communications Inc., which bid for and won $1.4 billion worth of personal communications systems (PCS) licenses in last spring's government airwave auctions, announced it has filed for protection from creditors under Chapter 11 of the bankruptcy code. That auction by the Federal Communications Commission was aimed at entrepreneurs who wanted to compete with big players like Sprint and AT&T to provide a new generation of mobile-phone service.

The airwave auctions brought high prices for the licenses, raising $10.1 billion for the U.S. Treasury. But early on, there were concerns that some buyers would have difficulty coming up with the money. Pocket had to postpone an initial public offering aimed at raising money for its licenses after Wall Street grew jittery about the PCS market. The company said in a statement that it plans to reorganize under Chapter 11 and ultimately complete the buildout of its PCS service.

Meanwhile, a number of other auction winners are looking to buy time to come up with the cash. Several asked the FCC in March to change the due date for their installment payments from every quarter to once a year. The FCC is considering that request. But the licensees do have a little breathing room in the meantime. Until a final decision is reached, the Mar. 31 installment deadline has been suspended.

By Amy Barrett in Washington