FCC May Backtrack on Free Broadcast, Paging Licenses
In an unusual move that could delay the government’s upcoming airwave auctions, federal regulators say they may scrap a controversial plan to give some companies free licenses to offer lucrative communications services for which rivals are expected to pay $250 million or more.
The Federal Communications Commission asked the U.S. Court of Appeals here to give it two weeks to review its so-called pioneer’s preference rule after conceding in a six-page emergency court motion Friday “that the commission’s stated rationale is no longer adequate to support its decision to award licenses to preference recipients for free.”
The court has not yet ruled on the request, which triggered an outpouring of court filings this week by proponents and opponents of the preference rule.
“It’s highly unusual on the part of a federal agency to admit it was wrong. . . . We are pleased with this development; it shows real intellectual courage,” said James P. Tuthill, senior counsel for Pacific Bell, which brought suit against the FCC earlier this year to block the free-license awards.
“It’s a fairness issue,” countered Scott Schelle, executive vice president of Washington-based American Personal Communications, one of four companies designated to receive a free license to offer personal communications services. “Four and a half years ago, PCS was only an idea. We helped bring this technology to market.”
The FCC’s motion comes less than two weeks before the agency begins a long-awaited auction of more than 3,500 licenses for advanced, new broadcast and paging technologies July 25. A winter auction is scheduled to launch broad-band PCS, a cellular phone competitor that will offer two-way voice and data services through wireless transceivers that will eventually be as portable and unobtrusive as a wristwatch.
In an effort to win free licenses, more than 50 concerns had sought FCC recognition for inventing PCS technology. However, only three firms--Omnipoint Communications of Colorado Springs, Colo., APC and Atlanta-based Cox Enterprises--received free licenses to provide broad-band PCS. In addition, Jackson, Miss.-based Mtel was awarded a free FCC license to provide narrow-band PCS service.
FCC general counsel William Kennard acknowledged Tuesday that the agency’s preference rule was misguided but added that “the commission has not made any determination with respect to whether narrow- or broad-band licensees should” have to pay for their licenses.
FCC sentiment over the pioneer’s preference rule has been shifting as 12 years of Republican administration of the agency yielded to the influence of President Clinton’s three new FCC appointees.
In addition, the agency has been under pressure to dump its preference rule from Capitol Hill lawmakers such as Rep. John D. Dingell, the powerful Michigan Democrat who chairs the House Commerce Committee.
