FCC Order May Ease Spectrum Logjam

The Federal Communications Commission has taken a step toward making the wireless communications industry more attractive to carriers such as Alltel Corp.

The Dec. 21 order follows a Nov. 8 ruling and reallocates 27 megahertz of spectrum, or available transmission space, from the federal government to various users, including commercial carriers. Some of the frequency bands will be available for a September auction.

And, perhaps even more important to the company, the Commission will eliminate the commercial mobile services spectrum cap rule come Jan. 1, 2003.

This rule limits the amount of spectrum a company can control in a market area. Larger carriers claim this rule, rather than encouraging healthy competition, forces chaotic competition, with too many companies chasing too little air space.

“These actions will benefit consumers by permitting and encouraging the introduction of new and innovative wireless technologies,” an FCC news release stated. “We believe that the actions taken herein, coupled with a companion Notice of Proposed Rule Making seeking comment on appropriate service rules for the reallocated frequency bands, will lead to the development of new technologies and services and provide spectrum alternatives for users currently operating on heavily encumbered spectrum where operations are constrained due to congestion.”

“Constrained due to congestion” describes most wireless telecom markets today. Alltel and other carriers have seen wireless revenue and profits fall recently as maxed-out airwaves limit the variety and quality of service the companies have been able to profitably offer.