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SPECTRUM LEGISLATION DESIGNED TO GET HOLD ON WIRELESS LICENSING

WASHINGTON-Senate Commerce Committee Chairman John McCain (R-Ariz.) has drafted spectrum auction legislation designed to rein in what has become a high-stakes wireless licensing process driven increasingly by budget forces, possibly at the expense of competition.

Pete Belvin, a Commerce Committee telecom counsel, told an industry gathering last week that McCain wanted to inject order and regularity into auctions. A spectrum auction hearing is scheduled for April 22.

McCain’s initiative is a slap at congressional budgeteers, the Clinton administration and Federal Communications Commission Reed Hundt’s spectrum auction program, which has produced $22 billion from the sale of digital paging and mobile telephone licenses since auctions were authorized by Congress in 1993.

However, it is unclear whether the U.S. treasury will receive the money pledged in FCC spectrum auctions.

Already, start-up personal communications services firms, which cumulatively paid $10 billion in the C-block auction last year, are struggling to stay afloat. Pocket Communications Inc., the second biggest winner in that auction, filed for Chapter 11 bankruptcy last week.

Meanwhile, public stock offerings contemplated by NextWave Telecom Inc. and General Wireless Inc.-the first and third largest C-block bidders-are on hold.

C-block PCS firms, meanwhile, have been critical of the FCC’s rush to auction flexible Wireless Communications Services licenses. The auction kicks off April 15. The companies early on feared the auction of flexible wireless licenses would undercut Wall Street financing of their businesses.

The FCC recently suspended all C- and F- entrepreneur block PCS licensee interest payments until further notice.

The GOP-led Congress and the administration mandated the auction last fall to raise $3 billion as part of the 1997 omnibus appropriations bill.

Hundt, himself critical of budget-driven auction deadlines, nonetheless is opposed to holding spectrum back from the marketplace.

But McCain, according to Belvin, believes auctions shouldn’t be held unless government can maximize spectrum value. She said the FCC should rely on experts to identify spectrum for particular purposes.

McCain, despite concerns about auction licensing, is an avid proponent of competitive bidding. McCain and former Senate majority leader Robert Dole (R-Kan.) unsuccessfully fought to have digital TV licenses auctioned. But the powerful broadcast industry lobby convinced other lawmakers to stick with an FCC plan to give broadcasters a second channel during the transition from analog to digital technology and then require them to return the original channel for auction.

At the same time, McCain has backed setting aside 24 megahertz of TV channels 60-69 for public safety communications and funding the construction of new public safety radio systems with some of the proceeds from the auction of the remaining 36 megahertz.

Belvin said the Commerce Committee will hold a hearing in May on federal-state pre-emption issues ranging from local taxes to antenna siting.

House telecommunications subcommittee Chairman Billy Tauzin (R-La.) also will hold hearings on antenna siting this spring or summer.

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