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Wireless industry advocates applauded the Federal Communications Commission’s move Nov. 8 to loosen government restrictions on ownership of mobile telecom airwaves. “The more amount of spectrum one particular company will own, the more number of calls that will go through,” said Kimberly Kuo, spokeswoman for the Washington, D.C.-based Cellular Telecommunications and Internet Association. Kuo and other industry experts predict this will spur consolidation among large wireless companies and introduction of new services. “Right now wireless companies are using all of their spectrum for voice calls,” she added. “With more spectrum they will be able to provide new data and video type services for consumers.” The FCC commissioners voted 3-1 to immediately increase the amount of spectrum wireless providers can own in urban areas from 45 megahertz to 55 megahertz and to eliminate the 55-megahertz spectrum cap in rural areas. The agency also voted to abolish the cap for urban markets beginning Jan. 1, 2003. Echoing the other two commissioners who voted to loosen the caps, FCC Chairman Michael K. Powell said the wireless market is the healthiest telecom segment. “This is the most competitive market when you compare it to all other telecommunications sectors,” Powell said. Although wider availability of spectrum is expected to benefit big wireless companies, many predict harmful effects for consumers. “Eliminating spectrum caps will potentially shortchange hard-pressed consumers,” said Michael J. Copps, the lone FCC commissioner to vote against lifting the caps. “This is, for some, more about corporate mergers than it is about anything else.” He also called for the FCC to do more research on what impact changing the spectrum limits will have on rural consumers and ownership diversity, among other issues. Opposition also has surfaced on Capitol Hill. Senate Commerce Committee Chairman Ernest F. Hollings, D.-S.C., and Sen. Daniel K. Inouye, D.-Hawaii, earlier last week sent a letter to Powell urging the FCC not to raise the spectrum caps. David Butler, spokesman for the Washington office of Consumer Union, said the spectrum caps are vital to ensuring wireless competition. “The FCC’s action will likely lead to rampant consolidation, and the wireless industry as a result could resemble the local telephone industry, where a wireless group will represent a particular geographic area.” Separately Thursday, the FCC also voted to start a formal examination of radio ownership regulations. One key area of inquiry will be the agency’s policy of “flagging,” or holding for extended review, radio mergers in cases where the enlarged company would have excessive advertising revenue in a given market. According to FCC Commissioner Kathleen Abernathy, the agency must issue stronger guidelines for radio companies on the duration of merger reviews and on factors likely to cause regulatory intervention. “These flagged mergers raise some complex questions that require hard analysis,” Abernathy said. Six proposed radio mergers have languished for more than a year because of overconcentration of ad revenues, said Robert Ratcliffe, deputy director of the FCC’s mass media bureau. Jerry Duval, an economist at the media bureau, said the agency has chosen Syracuse, N.Y.; Rockford, Ill.; and Florence, S.C. as sites for pilot projects to explore the effects of possible radio ownership rule changes. Copyright (c)2001 TDD, LLC. All rights reserved.

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