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FREE TRADE MAY BOOST WIRELESS

WASHINGTON-Cash-strapped wireless telecommunications firms could get a big boost by free trade telecom legislation introduced by Sen. John McCain (R-Ariz.) and Rep. Michael Oxley (R-Ohio).

The legislation, following on the heels of the new World Trade Organization telecom accord, would allow unlimited foreign investment in U.S. wireless and wireline common carriers and give American firms greater leverage in negotiating entry into overseas telecom markets.

Current law limits foreign investment in U.S. common carriers to 25 percent, though the cap can be waived by the Federal Communications Commission.

“The only way for the United States to effectively lead the world in establishing an expansive global marketplace is to set the standard in this country by which U.S. companies want to be measured overseas,” said McCain, chairman of the Senate Commerce Committee.

The most immediate beneficiaries would likely be C-block personal communications services companies who collectively paid $10 billion for new digital pocket phone licenses and now must spend billions of dollars more to build systems and market their services.

The bill should be welcome news for NextWave Telecom Inc., which spent nearly $5 billion for 63 C-block broadband PCS licenses and was found by the FCC to have exceeded the foreign ownership cap by as much as 15 percent. In the meantime, NextWave is under orders from the FCC to bring foreign ownership into compliance with the 25 percent benchmark.

“With the WTO agreement, we have an unprecedented opportunity for economic growth and for exporting American ideas through sales of telecommunications goods and services,” said Oxley, a ranking GOP member of the House Commerce Committee and a leading proponent of telecom free trade in Congress.

A free trade provision championed by Oxley was stripped out of the 1996 telecom reform bill after he and Sen. Ernest Hollings (D-S.C.), a highly influential and protectionist-leaning Democrat, failed to compromise on the wording of the measure.

Hollings, angered that the Clinton administration signed the WTO telecom pact without implementing legislation in place, mounted a fierce fight during Senate debate on Charlene Barshefsky’s U.S. trade representative nomination to mandate congressional consent for all trade accords that involve changes to U.S. law.

Hollings wanted to attach that requirement to a waiver of 1995 law that makes foreign lobbying a disqualification for the USTR post. Barshefsky, prior to government service, provided legal and lobbying representation for a Canadian logging concern.

The Senate defeated the Hollings amendment, but approved the waiver and confirmed Barshefsky, 99 to 1. The House last week voted in favor of the waiver as well.

Despite Hollings’ contention that Barshefsky conceded too much in the WTO accord, she retained broad bipartisan support for her work on trade agreements this year that phased out telecom equipment tariffs and removed telecom service trade barriers.

Barshefsky has been acting U.S. trade representative since Mickey Kantor left the post last year to head the Commerce Department.

“The challenges we face in the global economy are every bit as critical today as at any point in our history,” said Barshefsky. “Our competitors in Asia and in our own hemisphere are entering into bilateral and sub-regional trade alliances that threaten to undermine U.S. export opportunities.”

“As the world’s largest trading nation,” Barshefsky added, “we cannot afford to sit on the sidelines. I look forward to working with the Congress in a bipartisan fashion to define trade negotiating authority that will continue to advance U.S. interests in the global economy.”

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