As expected, federal regulators Thursday proposed new rules that would help free up at least a fraction of the airwaves allocated for wireless services. Under these new rules, a wireless provider holding licenses for more airwaves, or spectrum, than needed can more easily lease that spectrum to another provider.
"Real, tangible consumer benefits" will come from these new rules, said Federal Communications Commission Commissioner Michael Powell. He explained that it will be easier for paging and wireless phone providers to meet the growing consumer demand as a result.
Capacity has become a critical issue as wireless services continue to enjoy rapid growth, both in the number of subscribers and the amount and length of calls placed by those people. Upcoming services, such as high-speed Internet service and streaming video, will need still more capacity, according to the industry.
The FCC approved the rules in a 5-0 vote at its monthly meeting Thursday.
The commission hopes to step out of the business of monitoring the purchase and sale of spectrum in the market. Instead, the FCC will help the market to make decisions regarding the sale and lease of spectrum by eliminating unnecessary regulation and encouraging the development of equipment that could work in different portions of the airwaves.
FCC Chairman William Kennard has long cited a concern with spectrum scarcity, and Thursday he called it "the most serious challenge facing the wireless industry."
"It's only going to get worse as consumers demand these wireless Web devices," he said. "We're going to have to pay attention to this spectrum drought."
Currently, there is a spectrum cap, a limit of how much of the airwaves any one company can own in a market. This has led to concerns that companies won't be able to launch next-generation services such as high-speed Internet access and video streaming on wireless phones because they won't be allowed to have enough spectrum.
The spectrum cap is under review at the commission, and could be modified or even repealed. Some members of Congress have been urging the latter.
The dearth of spectrum is a concern at the White House. President Clinton signed an executive order instructing the FCC to act quickly in freeing up more spectrum for advanced services. Much of that spectrum is held by the military.
The FCC is scheduled to conduct auctions for additional wireless spectrum in December and March, although some in Congress are hoping to pass legislation that would delay that December auction. Their concern centers on the fact that some of the spectrum to be auctioned was forfeited by bankrupt NextWave Telecom, which is fighting to win back those licenses in court.
Phones and modems deregulated
The FCC on Thursday also shifted the responsibility for certifying phones, fax machines and modems to the manufacturers, as expected.
The commission will still insist that such equipment not cause harm to the public phone network, but the telecom industry will be responsible for developing the technical specifications.
Approving individual equipment no longer will be done by the FCC, but rather by an industry body or by the manufacturers themselves.
On a 5-0 vote, the commissioners noted that a competitive market for such equipment meant that existing quality standards would be maintained.
Kennard noted that the ruling eliminated 130 pages of technical rules.