WASHINGTON-The cellular industry apparently knew what it was doing when it waited for Reed
Hundt to retire as chairman of the Federal Communications Commission before asking that the spectrum cap be lifted.
“Let’s not talk about lifting the spectrum cap. The spectrum cap is the reason we have a competitive wireless
market,” Hundt told an investment conference last week.
The spectrum cap restricts wireless carriers to a total
of 45 megahertz of spectrum in any geographic area.
The Cellular Telecommunications Industry Association filed a
forbearance petition in September to lift the cap.
Congress established procedures in the Telecommunications Act of
1996 that allow entities to ask the FCC to “forebear” from enforcing rules that have become moot because
of competition. The procedures require the FCC to rule on such requests within one year but gives the agency the
option of a 90-day extension if necessary.
The Personal Communications Industry Association opposes lifting the
cap at this time, said PCIA President Jay Kitchen at the same conference. “PCIA’s position is a timing issue.
Remove the cap, just not now,” Kitchen said.
Whether the FCC will lift the cap could have a significant
impact on the proposed $53 billion merger of Bell Atlantic Corp. and GTE Corp. Indeed, William Barr, GTE senior
vice president and general counsel, said the issue of spectrum was delaying Department of Justice approval of the
marriage.
“My expectation is that [the Justice Department] will approve the merger. The only [issue of
concern at this point is] the spectrum cap-the [personal communications services] overlap of cellular properties … The
timing is being dictated by this issue … The more aggressive we are about how much spectrum we want to keep could
[delay] the approval … If we don’t want to be that aggressive, we would get a decision by the end of this month,”
Barr said.
Most of the overlap occurs because of Bell Atlantic’s interest in PrimeCo.
Barr further gave a time line
for closing the GTE/Bell Atlantic merger-provided approval is granted by DOJ and the FCC-that does not have the
merger closing until sometime after the turn of the century. Since the FCC must act on the CTIA forbearance petition
before the end of this century, such a decision could impact whether GTE/Bell Atlantic divests itself of the overlapping
spectrum.
In other action at the Legg Mason Investment Percursors in Telecom, Internet, and Electronic Commerce
meeting, FCC Commissioner Harold Furchtgott-Roth said he has received the information he requested from the
bureaus, which was held up last month when FCC Chairman William Kennard’s office said FCC commissioners must
first go through his office to get information from the bureaus.
The way the FCC handles mergers in the future
could change if Rep. Billy Tauzin (R-La.), chairman of the House telecommunications subcommittee, has his way.
Tauzin told reporters after addressing the second day of the Legg Mason conference that he hopes to “end the
business of holding up people when they come before the FCC for relief, either in the form of mergers or
applications” during the upcoming FCC re-authorization process.
