U.S. FCC Launches Review of Wireless Ownership Limits (Update1)
Bloomberg News
November 19, 1998, 3:22 p.m. ET
U.S. FCC Launches Review of Wireless Ownership Limits (Update1)
(Adds company names in 3rd paragraph, FCC comment in the
10th, 11th, 14th and 15th paragraphs.)
Washington, Nov. 19 (Bloomberg) -- Federal regulators will
consider raising limits on the amount of wireless communications
spectrum that a company can control in a given market.
The U.S. Federal Communications Commission will review
whether ownership limits designed to encourage competition in the
wireless telecommunications industry are still necessary, or if
they should be removed or modified.
FCC Chairman William Kennard has pushed for ways to help
wireless companies better compete against traditional local
telephone companies. The FCC will weigh whether easing the so-
called spectrum cap will help Western Wireless Inc., Nextel
Communications Inc., Omnipoint Corp. and others without reducing
competition.
''We have to recognize that, with market changes, we need to
reevaluate our regulations,'' Kennard said. ''There may be some
markets where it's more effective to relax spectrum caps than
others. Those are questions that need to be addressed.''
The agency will accept comments on the issue before making a
final decision, probably next year. The FCC said earlier this
year that it would consider lifting the cap as part of its
biannual review of ownership limits. It also will review a rule
that says one company can't own both of the two cellular licenses
granted in individual markets.
The Cellular Telecommunications Industry Association, an
industry trade group, has asked the FCC to waive the spectrum
cap, one option the FCC will consider. The agency also will look
at raising the limit, or eliminating it on a case-by-case basis,
depending on how competition is developing in a particular
market.
''Technology and the market should determine how much
spectrum is necessary, not an arbitrary rule,'' CTIA President
Thomas Wheeler said.
Cell Phones
Companies planning next-generation cellular phones capable
of advanced data services, for example, will require more
spectrum than is needed for current technology, Wheeler said. He
suggested the FCC limit the amount of new spectrum a single
company can buy at auction to prevent one company from buying it
all.
Currently, wireless companies can control 45 MHz of so-
called Commercial Mobile Radio Service spectrum in a market.
Thus, a company can own only a limited number of licenses for
cellular-phone and personal-communications services, or PCS, in a
market, depending on how much spectrum each license grants.
Commissioner Michael Powell questioned whether spectrum caps
should be waived to encourage companies like AT&T Corp. and
others that have started nationwide, one-rate cell-phone calling
plans. AT&T Wireless has seen record customer growth since it
introduced the Digital One Rate calling plan in May.
Other companies, including Sprint PCS and Bell Atlantic
Corp., matched AT&T's offer with similar plans.
The FCC last raised the wireless spectrum cap in 1996 to 45
MHz from 40 MHz. Originally, the FCC wanted to make sure
competitors weren't shut out of a market by a company controlling
too much spectrum.
SBC Communications Inc., a Baby Bell phone company with
growing wireless operations, ''supports the removal of artificial
constraints,'' company spokesman David Schlosser said. ''We're
big on letting the marketplace decide these issues.''
Regulators are looking to wireless companies to provide
competition for the traditional Baby Bells, so-called wireline
companies. It's possible that ''promoting wireless as a
substitute for wireline services in local markets could be more
easily achieved under a more relaxed regulatory scheme,'' Kennard
said.
Commissioner Gloria Tristani said that the FCC must consider
rural areas -- where competition hasn't developed as quickly --
separately from cities, where there are multiple new entrants
providing telecommunications services.
''Our citizens in rural areas do not have proportionally
less interest in receiving the benefits of wireless technology,''
Tristani said.
--Alan M. Wolf in Washington (202) 624-1880/ah/cap |
