FCC May Relax Limits on Wireless Phone License Ownership : Telecom: The plan would allow cellular carriers to introduce new Web and data services.

Federal regulators are considering relaxing the limits on ownership of wireless telephone licenses to help cellular carriers roll out new Internet and data services, according to industry officials.

The Federal Communications Commission is expected to consider as early as Sept. 15 a staff proposal to relax limits on the amount of wireless airspace a company may own in a single market, officials said Friday.

Under current limits, a company cannot own more than one of the five high-capacity wireless licenses in each market. That has left some of the most popular carriers overwhelmed in big cities and unsure how to start offering new high-speed Internet services that are incompatible with today’s phones.

If adopted by a majority of the agency’s five commissioners, the staff plan would immediately allow a carrier to own two high-capacity licenses, or up to 55 megahertz of the airwaves, in smaller and rural markets.

Combinations could include one older 25-MHz cellular license with one of the newer 30-MHz personal communications service (PCS) licenses, but not two high-capacity PCS licenses.

For larger markets, the FCC may begin waiving the limit on a case-by-case basis if competition would not be diminished and a “public interest” benefit would be served. The Justice Department’s antitrust division would continue to review deals for possible harm to competition as well.

Such staff proposals form the basis of FCC actions but can be changed before being approved. The expected Sept. 15 vote could also be delayed.

Industry officials and analysts welcomed the plan but said much more is needed if carriers are to begin offering so-called third-generation cellular service, which allows much faster wireless Internet access, while still providing ordinary telephone service to millions of existing customers.

“There are more and more applications demanding more and more bandwidth,” said SoundView Financial Group analyst Timothy O’Neil. “Every carrier is pushing the limits today.”

BellSouth Corp., one of the carriers asking the FCC to eliminate the cap altogether, is working to squeeze greater amounts of data into its existing spectrum, but it still sees a need for more airwaves.

“It’s not a matter of if, but when, it takes off,” said Keith Radousky, director of engineering for the company’s wireless unit. “The demand for wireless data will outpace technological improvements in efficiency.”

At Bell Atlantic Corp.’s mobile unit, new spectrum is needed just to satisfy the growth in existing services over the next four to five years.

“The spectrum cap would prevent us from growing our existing services,” said Bill Stone, executive director of network planning. “Throw 3G and high-speed data in there and we blow right through the cap.”

The FCC is also considering designating a new section of the airwaves for third-generation wireless service. Such new bandwidth would have to be auctioned in a process that could take several years but would eventually allow carriers to roll out new services and keep existing customers happy at the same time.

Not everyone in the wireless industry favors raising or eliminating the current spectrum limits.

The Personal Communications Industry Assn., made up primarily of smaller PCS carriers, has so far successfully convinced the FCC not to go further and raise the limit in big markets.