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

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.

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