WASHINGTON-Federal Communications Commission Chairman Bill Kennard, under fire from Capitol Hill, last week defended a compromise with the Clinton administration to protect U.S. spy satellite frequencies by shifting around spectrum and awarding free spectrum licenses to wireless startups headed by wealthy telecom moguls Craig McCaw and Alex Mandl.
In addition to saying the March Teledesic Corp. and Teligent Corp. licensing decision reflected “a careful balancing of all … factors” in a reply to questions from House Commerce Committee Chairman Thomas Bliley (R-Va.), Kennard said claims that the ruling was tainted by political influence peddling may be competitively motivated.
The FCC is expected to rule early next year on challenges to the decision, which allocated 18 GHz frequencies to Teledesic’s global broadband satellite system (while protecting spy satellite operations on the same band) and gave Teligent four times the amount of spectrum it already had in exchange for relocating from 18 GHz to the less-attractive 24 GHz band.
Teledesic and Teligent, both of which employed former telecom policy makers from the FCC, Congress and the White House as lobbyists, battled last year over rights to the 18 GHz band.
As such, critics like BellSouth Corp. and WebCell, a prospective bidder for wireless local loop spectrum, say the giveaway of licenses valued at more than $1 billion smacks of a back-room deal among well-connected Washington insiders and the administration. Critics also say the FCC is defending the decision on national security grounds to mask its own bureaucratic bungling of the licensing proceeding.
Teligent is one of a growing number of new wireless firms vying for business customers in the $110 billion local phone market dominated by the Baby Bells.
Looking to review the Teledesic-Teligent licensing decision next year, Kennard said, “the FCC’s job in this case is to objectively consider all the petitions and filings that have been made and come to a decision as quickly as possible that is fair, that promotes the development of competition and that will allow new competitors to enter the market as quickly as possible.”
Kennard told Bliley the 400 megahertz allotted at 24 GHz to Teligent could not be auctioned because 18 GHz Teligent licenses, modified to operate at the 24 GHz band, had been granted. However, Kennard said 18 GHz and 24 GHz licenses might be sold in the future.
In addition, the new FCC chairman listed other cases in which the agency used national security to justify the omission of public comment on large spectrum reallocations. Kennard said the Commerce Committee will be supplied with additional materials requested in the probe.
