Airwave Auction Raises Hackles

FRAMINGHAM (03/20/2000) - Get ready for the spectrum war - a battle between the biggest cellular carriers, which are lusting after new frequencies, and corporate wireless users, who want a sliver of the spectrum for themselves.

The U.S. Federal Communications Commission, which will auction 36 MHz of spectrum in June, earlier this month laid the groundwork for what could be a fierce legal slugfest. It sliced 6 MHz out of the spectrum and will auction it off to "private wireless" corporate users.

The day after the government's announcement, Tom Wheeler, president of the Cellular Telecommunications Industry Association (CTIA) in Washington, which represents large carriers such as AT&T Wireless Group and Vodafone AirTouch PLC, said the FCC's decision would eliminate "the competitive provision of third-generation wireless services in this band." Earlier this year, the CTIA vowed to take court action if the FCC reserved the 6 MHz for private wireless users.

Lauding the FCC's decision Laura Smith, executive director of the Industrial Telecommunications Association (ITA) in Arlington, Virginia, which represents more than 3,300 corporate wireless users, said, "Our members need the new spectrum now" because of overcrowding in urban areas.

Northwest Airlines Inc. in St. Paul, Minnesota, an ITA member, operates an extensive nationwide ground network over a private wireless system, and that network is essential to the management of such operations as aircraft de-icing, Smith said. Though the airline could use a commercial carrier, "costs would be higher, and [a commercial service would not be] as safe or reliable," he said.

A Northwest spokesman confirmed that statement.

Donald Vasek, director of government relations at the Personal Communications Industry Association in Alexandria, Va., said the new spectrum up for grabs "is ideal for private users because it is adjacent to the existing 800-MHz band where they already operate, meaning it will not be too expensive to build equipment for the new frequencies."

But Vasek pointed out that the upcoming auction marks the first time these land mobile users will have to pay for spectrum. Douglas Fields, vice president for telecommunications at UPS Information Technologies, a subsidiary of Atlanta-based United Parcel Service of America Inc., questioned the whole auction process.

"There has to be some reasonable way to allocate spectrum to people who could actually see it through to a service," he said.

Memphis-based FDX Corp. operates the world's largest private wireless network.

According to Keith McGarr, vice president of the company's information technology engineering division, it couldn't get the same performance from a commercial system as it gets from its own. "There is not another wireless network that would give us both voice and IP at 19.2[M-bps]," he said.

The FDX network serves some 43,000 Federal Express delivery vehicles nationwide, and when the company needs new spectrum, it will work through "band managers" such as the ITA, McGarr said.

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