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FCC Says Mtel Must Pay for License to Offer National Two-Way Paging

July 13, 1994

WASHINGTON (AP) _ In a decision likely to stir controversy, federal regulators on Wednesday affirmed a decision to award a Mississippi company the first license to run a national two-way paging and messaging service but said the firm must pay for its license.

The Federal Communications Commission’s policy of not requiring companies to pay for licenses awarded under its pioneer’s preference program is the subject of a court dispute. Mobile Telecommunication Technologies Corp.’s license was awarded under that program.

Jai Bhagat, executive vice president of the Jackson, Miss. company, said he was pleased the FCC affirmed a decision last summer to issue the company a license to operate a new service called narrowband personal communications.

But ″we don’t think we should be charged,″ he said in an interview.

Bhagat said no decision has been made on whether to appeal the requirement that it pay for the license.

Under the pioneer preference program, companies are guaranteed a license - at no charge - for a particular service if the agency finds they have developed an innovation that leads to a new service or enhances an existing one.

Including Mtel, only three other companies have been selected to receive licenses for various services under the fledgling program. None of the licenses has been issued.

The FCC had adopted the program when it awarded all licenses for free. But under a congressional mandate, the FCC is now required to auction certain types of licenses, including licenses for the services the four companies seek to provide.

Mtel will either have to pay 90 percent of the lowest winning bid for a national narrowband personal communications service license or $3 million less than the lowest bid, whichever is less, the commission said. For the first time, the FCC will auction national narrowband licenses later this month.

Bhagat said his company has invested $25 million to develop the technology to offer the advanced paging and message service.

Bhagat said he did not know when his company would be issued the license, but added it plans to begin building its network as soon as that occurs.

The other companies given licenses under the pioneer program are Cox Enterprises Inc., American Personal Communications and Omnipoint Communications Corp. Analysts said they would be likely to be required to pay as well.