SEATTLE-The Personal Communications Industry Association’s annual meeting started here last Wednesday with a bang but ended with a bust.
About 7,000 people attended the three-day Personal Communications Showcase, more than double the attendance of last year’s event. Exhibit and hotel space sold out early. About 200 registrants were unable to obtain tickets for Thursday evening’s elbow-to-elbow awards banquet and Smokey Robinson concert.
However, attendees’ spirits-buoyed by the vibrancy of the wireless industry in general and consultants’ rosy predictions for personal communications services in particular-were deflated at the closing Saturday morning session. During the session, attendees heard that sweeping legislation updating the 1934 Communications Act had died in the Senate.
Sen. Ernest Hollings, D-S.C., chief sponsor of the bill, blamed its defeat on heavy lobbying by the regional Bell operating companies, which claimed they would have to compete with cable television companies and long-distance carriers before the telcos could respond in kind. The defeat came despite bipartisan support in Congress and House passage of a similar bill in June.
Speakers were openly irritated.
“I spent a year of my life on this bill, as I’m sure many others did,” said Thomas J. Sugrue, deputy administrator of the National Telecommunications and Information Administration. “I feel a pang almost like a member of the family has passed away.”
Noting that “tremendous concessions” in the bill’s language were made to the regional Bell operating companies, Rep. Jim McDermott, D-Wash., added, “The telcos made a serious mistake in not taking the deal that was made. To let the chaos (due to technological and competitive changes) in the industry go may invite Congress to step in later.”
Rep. Mike Kreidler, D-Wash., said that when the 103rd Congress convenes in January, “we will be moving very aggressively (to pass a new bill). It’s not a question of when, but how.”
Previously, FCC Chairman Reed Hundt spoke to convention delegates by Sprint videoconference from Japan, where he was attending an International Telecommunication Union meeting.
“I’m always asked to boil (the FCC’s) philosophy down to one word, and that’s competition,” Hundt said. “I can’t tell you how often I have heard that communications is for the big guys. I am not against the big companies, but I am against the view that only they can participate” in wireless opportunities. “Our job may be to ultimately get out of the way, but first we want to get new entrants in the way.”
Referring to this summer’s narrowband spectrum auction and similar broadband sales scheduled to begin in December, Hundt said he is “not convinced that lotteries” are the fairest, most efficient way to award licenses. While the FCC did not design the auctions to provide funds for the U.S. Treasury, the commission feels “it is fair to the American public to raise money from the sale of public property.”
Recent highly publicized defaults on auction payments “do not equate to auction failure,” Hundt said, pointing out that the FCC has an “85 percent completion rate on post-auction payments, the highest rate in government (public auction) history.”
In response to a question from Jack E. Robinson, president and chief executive officer of National Telecom Inc., a minority-owned business planning to bid in upcoming PCS auctions, Hundt said he “would like to see how the next auction goes” before considering relaxing current rules on capital requirements for PCS designated entities-qualified women, minorities and small business owners. Murmurs of concern over the requirements, which force entrepreneurs like Robinson to raise $100 million by December, could be heard throughout the convention. Designated entities are finding the practicalities of signing on deep-pocketed partners-who have little liquidity over the 10-year license terms-quite difficult.
Hundt’s statement was later amplified by Commissioner Ness. She said that by allowing smaller firms to compete against each other rather than against larger companies and providing discounts and installment payment plans, the commission had addressed the needs of “groups that historically have not been at the table.”
However, Ness also said that she recently met with a group of New York analysts and was mindful of designated entities’ concerns. Since PCS investment payoffs may not come for 15-20 years, the FCC will look at the 10-year license term for broadband PCS. If changes are made, they will probably occur prior to designated-entity broadband auctions next year.
Officials of the National Paging and Personal Communications Association and the United States Independent Personal Communications Association, which represent designated entity interests, told RCR that they will push the FCC to lower the eligibility cap for bidding on entrepreneurial blocks of PCS licenses from the current $125 million threshold to $6 million.
“Otherwise, we’re going to wind up with people like Katharine Graham (of the Washington Post) owning all the licenses,” said Micheal Walker, NPPCA president. The two associations are trying to create a PCS investment pool with money from big-name minority entertainers and business people.
Hundt also addressed an audience question regarding the commission’s controversial freeze on specialized mobile radio license applications.
“We are trying to analyze the options for resolving the terrific problem of the backlog we have,” said Hundt, who is awaiting a report from a task force charged with categorizing the applications.
“If we double the staff, it will take us a year to process those applications,” Ness noted. Under congressional mandate, licenses for 800 MHz SMR applications filed after July 26, 1993, must be auctioned.
When moderator Bernard Kalb of CNN (replacing scheduled speaker ABC’s Forrest Sawyer, who was sent to cover the Haitian crisis) asked Thursday’s panel of experts what potholes they see on the Information Superhighway, he received the most-repeated quote of the conference from David Twyver, president of wireless systems for Northern Telecom Ltd. “I see a lot of deep ones with a lot of companies in them.”
Perhaps the most unheralded coup of the conference was achieved by Star Paging (U.S.) Inc., which managed to bring Yuan Ming-Fu, vice director of the Mobile Communications Bureau of the Ministry of Posts and Telecommunications, People’s Republic of China, to the United States for the first time. The occasion was a banquet celebrating the opening of Star Paging’s U.S. office in Bellevue, Wash., and introduction here of its alphanumeric auto paging system.
Mike Wong, general manager of Star Paging (U.S.), said the PRC has 10 million paging subscribers, a figure that elicited whispers among banquet attendees. Star claims 200,000 paging subscribers in Hong Kong and seeks to increase its share of the PRC paging and cellular market. Following the convention, the PRC delegates were to visit Motorola Inc. facilities.
Identifying what may be the major trend underlying wireless industry change, Craig Mundie, Microsoft Inc.’s vice president of advanced consumer technology, told the PCIA gathering, “We’re at a point where we are going to have a technological discontinuity.” While the focus to date has been on voice communications and personal computers, the marriage of computing with wireless will define the future.
As a result of this powerful marriage, “this industry will have a more profound impact on the culture of the world than any other industry,” said Bernard Puckett, president and CEO of Mobile Telecommunication Technologies Corp.
Professional forecasters backed up Puckett’s prediction of profound change with study results showing increasing overlap of wireless subscriptions, multiple units per household and heavier use in middle-income households.
Andrew Roscoe, CEO of MTA/EMCI, said that a year ago, “we compiled industry research across the wireless se
rvices and came up with astronomically high numbers.” However, “even with that concern, these forecasts (from the study) were low. We found we under-projected again.”
The dynamic nature of the industry also will be reflected soon in the merger of the National Association of Business and Educational Radio with PCIA. Driven by regulatory changes that blur traditional service boundaries, the merger has been approved by PCIA’s board and awaits a final vote by NABER, whose key members are in favor of the move.
Jay Kitchen, currently NABER president, is expected to be named president of the combined group.
Thursday morning’s Women in Wireless Communications meeting was a good start for a new organization, with a heart-felt talk on career development by Jenny Haynes, vice president of PageNet.
However, only 43 women were present-a poor reflection on the wireless industry’s record of hiring and promoting women.
Judith S. Lockwood, based in Santa Rosa, Calif., has been writing, editing, and publishing on wireless topics since the mid 1970s. Founding editor of RCR, she can be reached at (707) 542-9178.
