Congressmen press for next-generation wireless services

The co-chairmen of the Congressional Internet Caucus, Reps. Bob Goodlatte (R-Va.) and Rick Boucher (D-Va.), want Congress and the Federal Communications Commission (FCC) to speed their decisions so that wireless phone providers can launch next-generation services based on so-called "3G" standards. The new technology will make it easier for wireless customers to get high-speed Internet access, video and audio streaming, and video conferencing services from their network provider.

Many analysts believe 3G services will revolutionize the wireless industry even more dramatically than the introduction of digital and PCS services have over the last several years. But many companies are concerned they won't be able to launch these new services if they have to operate under the existing "spectrum cap" set by the FCC.

Wireless Media

The FCC controls how much of the airwaves any given wireless company can own in a particular community. This spectrum cap is designed to ensure multiple competitors by preventing one company from buying up most of that community's air space. However, in its fifth annual report on the wireless industry released earlier this month, the FCC said the industry is quite competitive, with multiple markets being served by as many as seven different wireless competitors. Despite this, the FCC hasn't yet ruled on how wireless providers that are at, or close to, the cap in a given community could use additional spectrum to provide next-generation services.

"Congress must take action to ensure that the U.S. government facilitates, rather than inhibits, the rollout of this new service," Goodlatte said in a statement following a wireless conference held this week in Helsinki, Finland. Rep. Cliff Stearns (R-Fla.) in June introduced a bill that would prevent the FCC from counting any future spectrum acquisitions by wireless providers against the cap.

Goodlatte is not a co-sponsor of that bill, but spokeswoman Michelle Semones said, "He supports the goals of that legislation" and believes Congress "should take action." Among the bill's more prominent co-sponsors are Reps. Billy Tauzin (R-La.) and Michael Oxley (R-Ohio), chairman and vice chairman, respectively, of the House Commerce Telecommunications Subcommittee.

FCC chief economist Gerald R. Faulhaber admits that Europe has "a leg up" in the development of 3G services and in allocating spectrum for them.

"The caps, frankly, don't make sense," Boucher said in an interview. "We're on the verge of auctioning the spectrum" for 3G, he said, but because of the caps, few large providers will be able to purchase that spectrum and begin advanced services.

"It would be other companies" entering the 3G market, he said, companies lacking experience in wireless services that would be challenged to provide quality service.

An industry trade group, the Cellular Telecommunications Industry Association, filed a motion with the FCC seeking to block the agency from enforcing its own cap rules, in large part out of concern for 3G launching. The FCC struck down the motion, saying the cap "helps protect consumers" and ensures multiple competitors.

The FCC acknowledged that 3G services might be hampered by the cap. It said it may take up the spectrum requirements of 3G in a further ruling, but that in the meantime, any wireless provider could apply for a waiver of the cap in a particular area if it could demonstrate that it could not otherwise provide new services.

Boucher didn't feel that FCC waivers of the cap are the right approach. "I don't think we should be burdening businesses or the Commission," he said. "There's no real standard" for qualifying for a waiver, he said, so "the process would be very arbitrary." He predicted the issue would be hotly debated in the next Congress.

Some members of Congress, such as Goodlatte, want more concrete assurances that spectrum will be available. He faces an uphill road, as there is only a month left in the 106th Congress. The Stearns bill has yet to have a hearing, and there is no similar legislation in the Senate.

Given the progress Europe has made in allocating spectrum for 3G, however, Boucher doesn't want to waste any more time. "The United States cannot delay in facilitating the development of technologies that deliver these services...ensuring that the U.S. remains the leader in technology innovation," he said.

The FCC has delayed several rounds of auctions originally scheduled for this year that will ultimately put new slices of the airwaves up for bid. Big companies like Verizon and Sprint want to use this spectrum to offer next-generation mobile phone services, including high-speed Net access.