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WIRELESS CARRIERS BERATE LACK OF LIMITATIONS ON AIRCELL

Representatives from BellSouth Corp., AirTouch Communications Inc. and GTE Corp. last week met
with Federal Communications Commission representatives to discuss AirCell Inc.’s petition for a waiver of the airborne
cellular rule.

The discussion with representatives from the Commercial Wireless Division of the Wireless
Telecommunications Bureau centered around the lack of any mandated operating limitations on AirCell’s air-to-ground
system that would mitigate interference potential in terrestrial systems.

Louisville, Colo.-based AirCell Inc. has
proposed an air-to-ground wireless communications system, to be used in the general aviation and commercial airline
markets, that makes use of existing terrestrial cellular networks. The company said its system can provide clear voice
and data communications, including fax, e-mail and Internet access, at a fraction of the cost of traditional air
phones.

The company had been operating under an experimental license, and in December, the FCC cleared the
company to offer its service commercially by granting AirCell a waiver of rules that prohibited the use of cellular
phones in airplanes.

Several cellular carriers objected to AirCell’s system, saying it could cause interference in their
networks, particularly because at such high elevations an unusually large number of cell sites would be able to acquire
the signals put out by AirCell’s system. AirCell said only cell sites equipped with its antennas would receive the
signals. The company maintains it has conducted several trials proving the system does not cause significant
interference in terrestrial wireless networks.

“We still feel strongly it will cause interference in our
networks,” said Jeff Battcher, a spokesman for BellSouth Cellular.

BellSouth, in a letter filed with the FCC
and during discussions last week, said its primary concern is a lack of mandated operating limitations on AirCell’s
system.

“AirCell and its partners have thus been given free, unfettered discretion to operate in any manner and
at any power levels they desire,” said the company in its letter. “BellSouth has concerns about AirCell’s
operation even with the limitations proposed by AirCell. For the waiver to be granted without those limitations
heightens BellSouth’s concerns significantly.

“It is incredible that the wireless bureau would issue its order,
premised upon all of the ostensible safeguards to be employed by AirCell and its partners in the operation of service,
and then fail to impose any operating limitations on AirCell or its partners.”

AirCell said the waiver was its
last major hurdle to providing service commercially.

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