Subject: [NEXTEL-1] FCC licenses for cell phones grew with (Dated)

From: Marcel <[email-masked]>
Date: Tue, 10 Dec 2002 22:30:54 -0500

FCC licenses for cell phones grew with times

Thursday, March 07, 2002

Q: Some time ago, I heard that the FCC assigned two licenses per
market for cellular phones -- one for the local phone company, one for
another competitor. In the meantime, many cell phone services have
popped up. How is this possible?

A: In the early 1980s, the Federal Communications
Commission did assign each market two licenses as
you have suggested. That was when nobody really
understood the potential of cell phones -- and most
thought that they would be used by a small
percentage of the population. However, the market
has taken off, and the FCC has changed its strategy.

When the original allocations were made -- two per
market, 30 markets at a time, starting with the largest in the United Sates -- a
few large companies and several smaller companies created elaborate
technical bids to get the licenses, which were given away by the FCC at no
charge. It didn't take long for others to realize that these companies were
given multibillion-dollar assets in these proceedings. So thousands of
companies jumped in -- especially after the FCC decided to award the
licenses based on a lottery instead of on merit.

As service fees decreased and coverage increased, Americans increasingly
realized the value of being connected while being mobile. So they signed up in
droves.

As the number of users increased, the value of
the individual licenses went up dramatically,
providing a wonderful opportunity for smaller
companies to sell out to the cell phone
operators with national aspirations. As a result,
many larger operators built national networks
by buying smaller companies or their licenses;
many individuals became millionaires (even a
few billionaires); and cell phone systems
became so congested in major cities that service went down. Customers
constantly complained about lost phone calls or inability to get through.

So the FCC decided to create more space for cell phone companies in each
market. In addition to the two original bands of channels, they allocated six
new bands. To spread the wealth, they attempted new allocation methods
including provisions for small and minority- owned companies to have special
consideration in some lotteries. As time marched forward, these new bands
were deployed in various markets, and new competitors arose, some of
which you've never heard of. In addition, companies used various
technologies to increase the capacities of their systems and decrease the costs
of deployment. That's why you have phones that are incompatible between
systems. (AT&T uses TDMA; Verizon uses CDMA technologies -- which
don't work together.) Some phones are dual mode or tri-mode (so they can
use PCS technology and Internet). Some have special features. (Nextel has a
direct connect feature -- which is actually a holdover from pre-cellular mobile
telephones.)

The rush to market has created a number of shaky competitors, though.
Before AT&T purchased Craig McCaw's systems, McCaw had his team
running around the United States negotiating deals with hundreds of lottery
winners to create his large network. Financed with debt, McCaw's network
was constantly in jeopardy of crumbling -- until AT&T made him a billionaire
with that single purchase.

Currently the big question mark is what will happen to NextWave
Communications' licenses. The company, which has licenses in New York,
Los Angeles, Chicago, Pittsburgh and other markets covering 172 million
people, has filed for bankruptcy, which prompted the FCC to confiscate the
licenses. Now the Supreme Court must decide whether the FCC can lawfully
do this -- or whether NextWave has the right to sell the licenses to pay off
debts. Until the issue is resolved, which could take another year or more, cell
phone users in 28 of the top 30 markets will have one less choice of cell
phone service.

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/

---

From: Marcel <[email-masked]>
Date: Tue, 10 Dec 2002 22:56:40 -0500

http://www.post-gazette.com/search/redir.asp?path=/interact/20020307radin0307p3.asp&date=3/7/02%201:52:07%20AM

--
    "NEXTEL-1 IT'S NOT JUST NEXTEL"
  Note The New address
Subscribe to Nextel-1: http://www.groups.yahoo.com/subscribe/NEXTEL-1

  "NEXTEL2 FOR iDEN SOFTWARE DEVELOPERS"
Subscribe to Nextel2: http://www.groups.yahoo.com/subscribe/NEXTEL2

  "WIRELESS FORUM HOMELAND SECURITY GROUP"
     The Complete Resource for Wireless Homeland Security.
Subscribe to WFHSG:  http://www.groups.yahoo.com/subscribe/WFHSG