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CONGRESS TO LOOK AT RELOCATION, PLAYERS EXPECT FUTURE PROBLEMS

WASHINGTON-Senate Commerce Committee lawmakers say microwave relocation rules may have to be revisited by Congress or the Federal Communications Commission if it is determined microwave users are demanding excessive payments from personal communications services licensees in exchange for being relocated from the 2 GHz band to higher frequencies.

But, unlike the House Commerce Committee, the Senate panel stopped short of approving actual changes to FCC rules requiring a two-year voluntary negotiating period and a one-year mandatory negotiating period for parties to settle on a price and to agree to terms and conditions of relocating fixed microwave users.

The FCC has auctioned 99 of the more than 2,000 licenses for next-generation pocket telephone systems. Electric, gas and water utilities, oil and gas companies, railroads and local governments must vacate the 2 GHz band PCS will occupy, but they are entitled to compensation from pocket telephone firms for making the move.

“This committee should do something about it if in fact the parties cannot negotiate and come up with some reasonable and rational ways of handling this problem,” said John Breaux, D-La., a member of the Senate Commerce Committee.

Breaux entered into the record a scripted colloquy between himself and Ernest Hollings, D-S.C., ranking minority member of the panel and a champion of microwave user rights, in which both lawmakers warned against unnecessary delay of PCS and put both sides on notice of possible government intervention if they cannot get the controversy under control soon.

The House Commerce Committee last month approved an amendment by Rep. Ralph Hall, D-Texas, that would reduce the overall time frame for microwave relocation negotiations from three years to two years.

Both Commerce committees addressed the microwave relocation issue in the context of budget reconciliation bills that seek to raise $14 billion by 2002 by expanding the FCC’s auction authority.

The two panels, to the chagrin of the wireless industry, declined to auction digital TV channels.

It is unclear how public-safety microwave users, who have three years for voluntary negotiations and two years for mandatory negotiations, would be affected by any changes to microwave relocation guidelines.

Congress’ interest in the matter has been heightened by heavy lobbying of wireless telephone trade associations.

“It is clear that, instead of good faith negotiations to relocate as required by law, many microwave incumbents are leveraging off the public trust of their license to profiteer,” said Thomas Wheeler, president of the Cellular Telecommunications Industry Association.

Wheeler has written key congressional committees, the FCC, Justice Department and Office of Management and Budget, asking officials to investigate alleged misconduct and to crack down on offenders.

CTIA and the Personal Communications Industry Association claim revenue from upcoming PCS auctions will be reduced as bidders take into account higher-than-expected costs of moving microwave licensees from the 2 GHz onto comparable facilities at higher frequencies.

It is estimated that 1,200 licensees occupy 13,000 microwave paths on the 2 GHz band in the United States. The cost of relocating each microwave link is said to range between $200,000 and $500,000.

The FCC, for its part, has not indicated a desire to modify microwave relocation rules. Commercial wireless carriers wanted federal regulators to re-examine those rules in a PCS microwave relocation cost sharing plan that is expected to be proposed this week.

“I think neither of those two senators have the full story yet,” said Jack Richards, a lawyer who represents 2 GHz microwave licensees.

Richards and others claim most microwave users have not been contacted and are willing to initiate microwave relocation talks.

“If they (PCS firms) would spend more time negotiating and less time whining maybe we could get off the dime,” said Richards. He said repeated allegations against microwave users of extortion that fail to name the accusers has turned into “the big lie.”

As such, policymakers have found it difficult to sort out the facts and to gauge the true extent of the problem alleged by pocket telephone companies in the face of the fiery rhetoric. There also appears to be a reluctance among regulators and lawmakers to be drawn into an inter-industry fight that is in an early stage now but could escalate into a bigger policy problem later since future auctions and government spectrum reallocations will depend on relocating incumbent users at the expense of winning bidders.

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