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RealTime IT News

FCC Opens Airwaves to Close Digital Divide

The Federal Communications Commission this week adopted rules to govern an upcoming auction for a prime piece of public airwaves.

Winning bidders will be allowed to offer a variety of communications services, ranging from high-speed Internet access to wireless phone services.

Under rules adopted three years ago, Congress directed the FCC to take back the spectrum for television channels 60 to 69 and to auction the airwaves licenses off, gradually moving stations to channels elsewhere.

Wireless communications companies will be allowed to bid in the high-stakes auction for new airwave licenses scheduled to be held in the spring.

The wireless auction should not be tempered by the fact that the airwaves are currently in use to carry television channels 60 to 69. In many parts of the country winning bidders will not be able to offer services in the spectrum until 2007 because the companies that win new licenses may have to wait for television stations to convert to digital technology.

Industry analysts agree that potential delays for using the open airwaves would not hamper the auction. Billions of dollars will be collected from the sale of the prime wireless real estate.

FCC Chairman William Kennard anticipates that companies could use the available spectrum to offer an alternative to Digital Subscriber Line and cable-based high-speed connections to the Internet.

"This order establishes an exciting framework for wireless in the 21st century," Kennard said. "Our rules allow auction winners to take advantage of technological advancements in providing a wide variety of new wireless services. This can only mean great things for consumers."

The FCC said it would allow companies like Bell Atlantic Corp. (BEL) and AT&T Corp. (T) to participate in the auction. Previously, the federal regulators barred major companies from bidding because they already owned airwave licenses.

Eric Rabe, Bell Atlantic spokesperson, said BA would not likely participate in the auction because it already has the airwaves it needs to provide wireless communication services in its territory. Rabe also said the company's pending merger with GTE might force it to get rid of a few airwave licenses in several markets.

"Bell Atlantic has made arrangements with PrimeCo Personal Communications L.P. and GTE Service Corp. to cover wireless services in our market," Rabe said. "As a part of the merger with GTE (GTE), we may have to divest several licenses due to service overlays in several markets."

The FCC plans to divide the licenses into six regional blocks around the country. In each area, the agency will auction one 20-megahertz license and one 10-megahertz license, but companies may acquire both blocks in the same area for the right price. Twenty-four megahertz has been reserved for law enforcement, but what remains is more spectrums than many wireless companies currently license to serve major cities.

As a part of the ruling, the FCC also waived the spectrum cap that prohibits companies from owning more than 45 megahertz of airwaves for telephone and paging services.