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Congress Asked to Leave Room for Small Business in Airwaves Licensing

April 22, 1993

WASHINGTON (AP) _ The administration’s plan to raise $7.2 billion by selling airwave rights to new wireless technologies must not exclude small businesses in favor of those with deep pockets, executives told a House subcommittee Thursday.

The Federal Communications Commissions could require, for instance, that at least one license in each market be awarded on merit, rather than to the highest bidder, said R. Craig Roos, chief executive officer of Personal Communications Services of New York.

The government plans to transfer a section of the airwaves, or spectrum, from government uses to industry for a host of new consumer communications devices, including wireless computers, pagers and phones.

Many of these devices have been developed, but can’t be put to use until their makers get access to radio waves.

Currently, the airwaves are given away through a lottery system, but in searching for ways to grow the federal treasury, President Clinton has proposed selling the next portion to the highest bidder.

The House Energy and Commerce telecommunications subcommittee chairman, Rep. Edward Markey, D-Mass., said that in writing legislation that sets up an auction process, he doesn’t want to ″lock up all the spectrum in the vaults of large companies.″

″All over this country, in basements and garages, smart people with big dreams need access to this spectrum to push the edge of the technological envelope,″ he said.

Paging and cellular phone companies serve a total of 24 million Americans today and employ more than 55,000 people, said William deKay, chairman of Telocator, the Personal Communications Industry Association.

He predicted new technologies would reach another 60 million more customers by 2002 and create jobs for a quarter million Americans.

But he said spectrum auctions favor those with substantial net assets and large, particularlytelecommunications-related businesses, when it has been the small entrepreneurs who had the inventiveness to create the industry in the first place.

Douglas Smith, president of Omnipoint Corp., also opposed the auction idea and said the nation would be best served if licenses were granted to those who compete to gain space on the spectrum by inventing something to use on it.

This so-called ″pioneer’s preference″ incentive system ″literally launched″ the fledgling wireless, personal communications industry, Smith said.

He said his company invested $12 million to develop its pocket phones in the competition to get the pioneer’s preference experimental license the FCC awarded it.

″No entrepreneur I know thinks auctions are a great way to allocate rights to the spectrum,″ Smith said.

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