WASHINGTON—The Federal Communications Commission (FCC) voted 3-1 to relax the spectrum cap in urban markets to 55 megahertz and to completely dissolve the cap in January 2003. The move likely will be criticized by the wireless industry, which wanted the cap lifted completely instead of being relaxed in measures. However, the 13-month period likely will give wireless operators time to court potential merger partners. Carriers are expected to consolidate along technology lines.
“We do not expect the mega-mergers to occur immediately. More likely is a series of smaller consolidations until the complete removal of the spectrum caps in January 2003. We still believe the wireless marketplace will trend toward four to five operators in the long run,” noted Raymond James analysts Ric Prentiss and Tanya Nelson.
