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Technology Stocks : The New Qualcomm - a S&P500 company -- Ignore unavailable to you. Want to Upgrade?

To: LindyBill who wrote (122)	7/24/1999 8:58:00 AM
From: Ron M	Respond to of 13582

San Diego Union Tribune Story via Bloomberg on the FCC suit Qualcomm entitled to PCS license, appeals court says BLOOMBERG NEWS SERVICE July 23, 1999 WASHINGTON -- Qualcomm Inc., San Diego-based developer of the world's second-most popular cellular-phone technology, is entitled to a U.S. license to offer digital wireless phone service, a U.S. appeals court ruled Friday. Siding with Qualcomm in a seven-year-old fight, the U.S. Court of Appeals for the District of Columbia Circuit told the Federal Communications Commission "to take prompt action to identify a suitable spectrum and award Qualcomm the license for it." The FCC rejected in 1992 Qualcomm's original application to offer personal communications services in Miami. Because Sprint Spectrum LP and PrimeCo Personal Communications LP have since won licenses for that area, the three-judge panel suggested the FCC should find alternative spectrum for Qualcomm. The court said the FCC should have awarded Qualcomm a so-called pioneer's preference -- a special legal status that gives companies licenses at a significant discount to promote innovation. Friday's ruling clears the way for Qualcomm to get a multimillion-dollar discount on a license even though Congress has since scrapped the special preferences. There's probably no "good fix" for Qualcomm because part of the value of a pioneer preference was being first to market, said Scott Cleland, managing director of Legg Mason Inc.'s Precursor Group. Today, there are nine wireless phone competitors in most markets. "It's going to be extremely hard to unscramble this egg and put it back together the way it should have been seven years ago," he said. Qualcomm shares climbed 4 3/16 to 154 11/16. Impact unclear The impact of the ruling for Qualcomm is unclear because "the problem lies in the fact that the licenses are gone," said Christopher Larsen, a wireless analyst with Prudential Securities. "What we've told the commission is we want to take a suitable equivalent" to the Miami license the company sought originally, said Kevin Kelley, senior vice president of external affairs for Qualcomm. "The question at this point is what does the commission have available?" The FCC is reviewing the decision and "determining the appropriate course of action," said Tom Sugrue, chief of the FCC's Wireless Telecommunications Bureau. Qualcomm announced earlier this week that fiscal third-quarter profit and sales surged to a record on strong demand for its cell phones and the chips that run them. The company doesn't provide cellular or PCS service, so entering into the business would be a new venture. The pioneer's preference licenses limit how long the company must hold them. Kelley said, "it's less than clear" what those restrictions are.