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SUGRUE: IN THE BELLY OF THE BEAST

WASHINGTON-Compliments and lavish words gushed from the moment word leaked out late last
year that Thomas Sugrue would become the newest in a succession of brave souls to head the Federal Communications
Commission’s embattled Wireless Telecommunications Bureau.

Highly intelligent, experienced, strong managerial
skills, wise in Washington ways and a nice guy to boot-adjectives repeated over and over again from lawyers and
lobbyists to describe the man the wireless industry hoped would lead them to the promised land of real-time
deregulation.

It was almost too much, all the swooning at the prospect of a Sugrue wireless bureau. Sugrue could be
forgiven had he thought this welcome wagon of a greeting was a set-up, especially after several lawmakers grilled him
last week about Phase II wireless E911 implementation. A cruel joke, perhaps? Would he go the way of his
predecessors, who fought valiantly but ultimately were swallowed up by this beauty-turned-beast known as the wireless
bureau?

In reality, the outpouring of goodwill thrown Sugrue’s way was more a reflection of the angst, frustration
and even contempt many in the wireless industry have had for those who have regulated them in recent years.

The
only real question was whether Sugrue’s strong wireline common carrier background and that of his new deputies
would hurt or help a wireless industry dying to escape the clutches of FCC rules it believes are better suited to
monopoly Baby Bells than to competitive mobile phone, paging and dispatch radio operators.

In addition to all the
accolades, how about courage? Who in their right mind would want the job?

The wireless bureau, once the darling
of the Clinton administration for raising billions of dollars from license sales and fueling competition, had fallen from
grace.

The mighty auction machine had lost its luster. Bankruptcies tied up scores of licenses in court. And billions
of dollars, once destined for the U.S. Treasury, vanished into the ether of airwaves bought and left vacant by top C-
block personal communications services licensees.

So when the FCC made it official early last December that
Sugrue would replace the likable but lax Daniel Phythyon as WTB chief, it was indeed a cathartic moment for a
frustrated wireless industry.

A shakeup in the front office that would bring James Schlicting and Diane Cornell-ace
telecom regulators in their own right-further bolstered optimism that-so far as the wireless industry was concerned-it
was, as President Reagan was fond of saying, Morning in America.

So, can Sugrue and his new management team
deliver?

For the time being, the honeymoon the wireless industry is on.

But, in coming months, Sugrue will be
under the gun as he crafts policy on a slew of prickly issues that include local number portability, customer proprietary
network information, calling party pays, digital wiretap, spectrum caps, siting, E911, auctions (and re-auction) and
private wireless licensing.

“I think we want to look at pro-competitive and deregulatory policies,” said
Sugrue in a telephone interview last week.

Regarding one of the most controversial issues Sugrue inherited from
Phythyon-strongest/adequate signal-Sugrue responded, “I think we’re getting close on that. I’m relatively
optimistic.”

And on Senate Commerce Committee Chairman John McCain’s (R-Ariz.) complaints about the
bureau front office being top heavy, not to mention slow and ineffective in keeping rule making and license application
trains running on time, Sugrue observed, “We’re looking at different streamlining
possibilities.”

Meantime, WTB reorganization will continue as a work in progress. WTB Deputy Chief
Schlicting will have oversight of WTB policy and commercial wireless services.

Cornell, WTB associate bureau
chief, will work as a chief of staff to Sugrue. Sugrue said he realized after only a week or so that using Cornell in this
way was necessary to help him stay organized. How’s that for being candid.

Deputy Bureau Chief Gerald Vaughan
will manage auctions and information technology, while Kathleen Ham, another deputy bureau chief, will reign over
public safety and private wireless services.

Wireless lobbyists, for their part, are saying nice things again about the
FCC.

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