Interesting People mailing list archives
U.S. Moves to Allow Trading of Radio Spectrum Licenses
From: Dave Farber <dave () farber net>
Date: Fri, 16 May 2003 05:32:29 -0400
U.S. Moves to Allow Trading of Radio Spectrum Licenses May 16, 2003 By STEPHEN LABATON WASHINGTON, May 15 - The government took the first steps today to permit companies to lease and trade radio spectrum licenses, a move that could result in improved service for the nation's millions of users of cellphones and other wireless devices. By a vote of 4 to 1, the Federal Communications Commission removed the impediments for leasing such licenses, making it more economically efficient for big and small wireless companies to gain access to spectrum licenses held by others. That should help them patch the holes in their networks that create cellphone dead spots, without having to make big capital investments. The move followed heavy lobbying by the largest wireless carriers, including AT&T, Verizon and Cingular, as well as players on Wall Street like Cantor Fitzgerald that are hoping to serve as brokers or clearinghouses in the creation of a secondary market for swapping licenses. Officials and industry analysts say the hope is that by allowing license holders to lease slivers of the spectrum that are currently underused, consumers will benefit from reduced instances of cellphone calls being dropped. More efficient use of the spectrum would make it easier to connect to the Internet with hand-held computers in crowded areas where the spectrum available is inadequate to move data and it should help extend wireless services in rural areas that are underserved. The decision to allow companies to transfer portions of the spectrum they do not use promises to reshape the economics of the market. It will also change the longstanding federal framework that regulates the holders of spectrum licenses. The commission extinguished a 40-year-old rule that had the effect of requiring the holder of a spectrum license to also control the physical infrastructure needed to use that piece of the spectrum - the antenna, the transmitter and the employees who run the operation. The rule was intended to ensure that the license holder be responsible for fixing signal interference and other problems. Under the new rules, the holder of a license who is not making use of the spectrum will be able to lease it to another company that would provide the equipment and personnel. "Today's action is one of the most important spectrum reform decisions by this commission in the last decade," said Michael K. Powell, chairman of the commission, in a joint statement with another commissioner, Kevin J. Martin. "For years, the commission has rhetorically praised the concept and possibilities created by secondary markets in spectrum. Today that rhetoric turns into reality." "Our decision signals a new day of increased spectrum access and improved services for consumers," they added. Telecommunications industry executives were similarly pleased. "Permitting secondary markets for spectrum will deliver to carriers improved access to the airwaves, increasing their flexibility and bringing down their costs, which should ultimately result in lower prices for consumers," said Tom Wheeler, president of the industry's main trade group, the Cellular Telecommunications and Internet Association. "Football teams aren't done after draft day. They continue to meet their changing needs through trades and late-season acquisitions. Wireless carriers deserve, and will now receive, similar flexibility." Officials have provided a variety of examples of how a commodities market in the spectrum would work, including the following: ?Nationwide cellphone companies would be able to lease pieces of the spectrum in different regions of the country depending on the available supply and on customer demand. ?News organizations covering political conventions or the Olympics, for example, would be able to buy contracts to use a piece of the spectrum during the event to give them greater capacity to beam pictures, sound and data. ?An airport with congested airwaves from air-traffic transmissions and cellphone use would be able to lease a piece of the spectrum from other spectrum holders that are not using their space during peak hours. With the proliferation of wireless communications, including growth in wireless browsing of the Internet, an expanding group of companies has been clamoring for scarce space on portions of the spectrum. But federal regulations have long impeded the ability of holders to sell or lease licenses. A 1963 F.C.C. decision called Intermountain Microwave linked the license to the requirement that each holder also control the transmission equipment. Three years ago, William E. Kennard, then chairman of the commission, proposed altering the rules and allowing the formation of a secondary market for spectrum licenses in response to increasing complaints from phone companies and others that they did not have enough space on the spectrum. In reconsidering the Intermountain case, the agency found a host of problems that prevented the owner of a license from lending it. In particular, it was not clear which company in such a transaction ought to be held responsible for problems like signal interference. The commission said today that it had resolved that issue. A company can become what officials call a lease manager and provide short-term access to the spectrum. In those circumstances, the license holder would remain responsible for complying with rules and would be liable for any interference problems. For long-term transfers, a company could turn over control of the license along with the responsibilities of complying with the regulations. That would require the approval of the commission, although officials emphasized today that they would streamline the process. One commissioner, Michael J. Copps, dissented. He said the agency did not have the authority under the Communications Act of 1934 to alter the rules in such a way. http://www.nytimes.com/2003/05/16/technology/16SPEC.html?ex=1054076387&ei=1& en=847ffdcbbd7b8ebb --------------------------------- Get Home Delivery of The New York Times Newspaper. Imagine reading The New York Times any time & anywhere you like! Leisurely catch up on events & expand your horizons. Enjoy now for 50% off Home Delivery! Click here: http://www.nytimes.com/ads/nytcirc/index.html HOW TO ADVERTISE --------------------------------- For information on advertising in e-mail newsletters or other creative advertising opportunities with The New York Times on the Web, please contact onlinesales () nytimes com or visit our online media kit at http://www.nytimes.com/adinfo For general information about NYTimes.com, write to help () nytimes com. Copyright 2003 The New York Times Company ------ End of Forwarded Message ------------------------------------- You are subscribed as interesting-people () lists elistx com To manage your subscription, go to http://v2.listbox.com/member/?listname=ip Archives at: http://www.interesting-people.org/archives/interesting-people/
Current thread:
- U.S. Moves to Allow Trading of Radio Spectrum Licenses Dave Farber (May 16)