The Federal Communications Commission has accused US WEST of colluding with Western Wireless Corp. when both bid for wireless-telephone licenses in Olympia, Wash., at a federal auction.

Both companies face fines of $1.2 million, and each has 30 days to pay the penalty or appeal.According to the government, US WEST and Western Wireless, based in Issaquah, Wash., made illegal contacts over the phone and via voice mail and those contacts "unfairly disadvantaged other bidders in the market."

Western Wireless ultimately won the Olympia license.

US WEST suggested the incident involved a rogue employee who has since been fired, spokesman David Beigie said.

US WEST has not yet decided whether to pay the fine or seek an appeal.

Western Wireless denied any wrongdoing and plans to appeal.