HERE'S A CHANCE to be a part of democracy at work. (That is if someone in the new administration is listening. Otherwise, you'll just think you're participating.) The Federal Communications Commission is reviewing Section 20.6 on "spectrum aggregation limits."

This is a cap that restricts the amount of broadband spectrum that a single wireless network provider can own in a geographic area. This range includes the PCS cellular service and any future 3G (third-generation) wireless spectrum that may be licensed -- unless network providers can demonstrate a need for "significant adverse effect on its ability to provide 3G or other advanced mobile services" without a cap waiver.

The FCC is re-examining this rule, which restricts to 45MHz the amount of broadband spectrum that a single entity can own in any geographic area, and is taking comment until April 13. Replies to the comments will be accepted until May 14.

The rule also says that an entity with a controlling interest in one area may have a noncontrolling interest of "up to 5 percent" in another cellular license in overlapping areas.

"The FCC seeks comment on whether the . . . spectrum cap and the cellular cross-interest rule should be eliminated, modified, or retained based on the public interest . . ." and whether the current rule inhibits "the development of advanced wireless services," according to FCC documentation

According to FCC bulletins in the past, the rule is there to "promote competition and protect consumers." Consumer protection, I assume, means protection against higher prices. You can send comments to the Office of the Secretary at www.fcc.gov/osec. Here are the links for filing comments: www.fcc.gov/wtb/csinfo/paper.html and www.fcc.gov/wtb/csinfo/electronic.html.

There are good arguments to be made on both sides of this issue.

Travis Larsen, a representative for the Cellular Telecommunications and Internet Association, articulates as well as anyone I know why the FCC should rescind the rule.

By limiting the amount of spectrum available, Larsen says, the quality of service suffers. The less spectrum for callers, the more likely, for example, that there will be dropped calls. Second, less spectrum means less room for innovative services, he says.

If U.S. companies don't own a large enough spectrum, they will also lack the monetary incentive to devote their resources to creating new services that require more spectrum.

The result will be that countries that do not cap spectrum will design the next generation of services. And if wireless innovation becomes the next launchpad for economic growth, then would we be giving away our chances for growth before the game begins?

Nevertheless, I do not think the FCC should rescind the rules. I think all of the above is outdated thinking. A new day has dawned, and new business models apply.

Something important is happening in business worldwide. Business as usual that says the big guys need to get bigger for all of the above reasons is no longer valid.

Business relationships are forming across disparate, though related industries. I'm not talking cartel here, but because business is both global and technology-intensive, business is also far more capital-intensive. Even the largest enterprises need to pool risk, capital, and customers to survive. Our government should encourage this developmennt.

In Europe, they are calling one such model the Mobile Virtual Network Operator concept. For wireless, that means network, content, and device providers are partnering to deliver the goods. To say no company is an island sounds corny, but the phrase fits very well here.

Building out a 3G network in the United States will cost billions of dollars. Not even the largest enterprises can finance it alone. Yet these companies ultimately want our business and our consumer dollars.

We may be witnessing a new business life-form that has a different way of surviving than older business life-forms. The new model may be an organism with a built-in system of checks and balances that will stop any one component from dominating the others.

Although the arguments put forth by Larsen may be viable in the short term, I believe there is no stopping the evolution of this new business model.

» posted by ITworld staff

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