WASHINGTON-The Federal Communications Commission’s new application freeze has created a major rift in the paging industry, the second major wireless sector to feel the big chill from Chairman Reed Hundt’s auction embrace.
The latest application freeze, imposed Feb. 9 on all paging carriers except those with nationwide licenses, was taken as part of an effort to make the transition to geographic licensing and to set rules for paging auctions.
The FCC stopped taking applications for new 800 MHz specialized mobile radio licenses a year-and-a-half ago to give federal regulators a chance to craft market-based licensing and auction rules.
Until now, paging and SMR permits were issued transmitter by transmitter. Cellular and personal communications services licenses, on the other hand, cover multiple transmitters in geographic service areas.
“We believe that the freeze put in place is fundamentally wrong-headed, excessive, and unprecedented-indeed, it is unlawful-because it is so unnecessary to the course the Commission wishes to pursue, while causing significant harm to those already bringing these services to consumers, and depriving consumers of the new services promised by rapidly developing technology,” said the Coalition for a Competitive Paging Industry.
The group, which demands an immediate withdrawal of the freeze, contains 30 local and regional paging operators and Glenayre Technologies Inc., a leading manufacturer of paging terminals.
The Personal Communications Industry Association initially criticized the paging application freeze, but there is a sense among observers that the trade group should have taken a stronger stance on behalf of local and regional carriers, but did not because of the presence of various nationwide paging operators on its board.
“Unless PCIA takes an aggressive and a fundamental action on the absolute and unequivocal removal of the freeze, they’re going to experience the same split and reduction in membership that Telocator [the predecessor to PCIA before the merger with the National Association of Business and Educational Radio] experienced in the ’80s,” said Kevin O’Brien, a wireless engineer in Annandale, Va.
“PCIA does not vote membership anymore; they vote dollars,” added O’Brien. “As a result, they don’t represent the industry.” O’Brien said it was his understanding the Wireless Telecommunications Bureau’s paging initiative did not include an application freeze until after it came back from Hundt’s office.
While the application freeze is intended to preserve unused paging spectrum for auctions, it could have the opposite effect and hit small- and medium-sized businesses hardest.
In the top 20 markets, according to the emergency petition, no paging channels are available for licensing. O’Brien said most available spectrum-so-called “white space”-is actually found in nationwide systems, which typically transmit on exclusive frequencies in only select markets throughout the United States. He also pointed out that nationwide paging operators, who can continue filing applications for new transmitter sites, serve local customers, too. As a result, according to O’Brien, nationwide paging operators are competitively advantaged by the freeze.
“If the freeze remains in place, we doubt that we will be able to remain a long-term player in the paging market in Georgia … because PageNet, our main competitor for local business in our service area, has nationwide exclusivity on at least five frequencies in Atlanta and is not subject to the freeze,” said John Knight, a partner in Best Page, L.L.C. in Alpharetta, Ga.
“At a mundane level,” said the coalition, “this vigorous competitive posture means that paging companies at this moment have in process plans to acquire, finance, and construct new facilities, and have pending hundreds of millions of dollars in equipment orders. At a more sophisticated level, paging systems are in the process of incorporating FLEX and other cutting edge technologies in order to provide their customers with the most advanced alphanumeric services possible through the most efficient use of the available spectrum. All this activity must be abruptly halted under the freeze.”
