FCC to Ask Public on Wireless Frequencies Resale

BOSTON (05/26/2000) - The Federal Communications Commission will hold a public forum next Wednesday on plans to create a secondary market for portions of the frequency spectrum that wireless service providers need to roll out broadband services. The move is designed to alleviate the demand caused by the boom in wireless services, including high-bandwidth, next-generation cellular telephone service.

Currently the FCC allocates spectrum licenses only once, to the winner of an auction. There is no secondary market, in which blocks of frequency are bought and sold, because until recently there was enough spectrum to go around. FCC chairman Chairman William Kennard first floated the secondary market plan in a speech to the Cellular Telecommunications Industry Association in February. "We know there are blocks of (the) spectrum not being used.... I envision a Web site that lists both licensees with available spectrum and companies looking to use or buy it," he said.

Alan Reiter, a Chevy Chase, Md.-based analyst and president of Wireless Internet+Mobile Computing called the secondary market plan a "major policy change" for the FCC. He said that if the FCC does decide to go ahead with the plan, blocks of the frequency spectrum could end up being traded "in a spot market just like you have for pork bellies."

In his February speech Kennard said that the spectrum currently occupied by television channels 60 to 69, which the Commission plans to auction this September for cellular telephone use, would be a good starting point for the secondary market. Broadcasters that currently hold those frequencies must migrate to new channels over a five-year period.

With the option of reselling the frequencies, they would have incentive to move faster, he said.

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