**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

+----------------------------------+---+------------------------------+
| In the Matter of                 | * | WT Docket No. 02-379         |
|                                  | * |                              |
| Implementation of Section        | ) |                              |
| 6002(b) of the Omnibus Budget    | * |                              |
| Reconciliation Act of 1993       | * |                              |
|                                  |   |                              |
| Annual Report and Analysis of    | * |                              |
| Competitive Market Conditions    | * |                              |
| With Respect to Commercial       | ) |                              |
| Mobile Services                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  |   |                              |
|                                  | * |                              |
|                                  | * |                              |
|                                  | ) |                              |
|                                  | * |                              |
|                                  | * |                              |
+----------------------------------+---+------------------------------+

**EIGHTH REPORT**

**Adopted: June 26, 2003 Released: July 14, 2003**

By the Commission: Chairman Powell issuing a statement; Commissioner
Copps concurring and issuing a statement.

**[Table of Contents]{.underline}**

**[Page]{.underline}**

I. INTRODUCTION [3](#introduction)

A. Background [3](#background)

B. Sources of Information [5](#sources-of-information)

C. Status of Competition [9](#status-of-competition)

D. Structure of Report [10](#structure-of-report)

E. Industry Development [11](#industry-development)

II\. Discussion and ANALYSIS [13](#discussion-and-analysis)

A. Spectrum Allocation [13](#spectrum-allocation)

1\. Current Allocation/Licensing [13](#current-allocationlicensing)

2\. 700 MHz Bands [16](#mhz-bands)

3\. Future Allocation/Licensing [19](#future-allocationlicensing)

B. Network Overview [20](#network-overview)

1\. Network Design [20](#network-design)

2\. Network Technology [21](#network-technology)

C. CMRS Industry [22](#cmrs-industry)

1\. Mobile Telephony Overview and Analysis
[22](#mobile-telephony-overview-and-analysis)

a\. Market Structure [23](#market-structure)

b\. Market Performance [30](#market-performance)

c\. Pricing Data and Trends [44](#pricing-data-and-trends)

d\. Wireless/Wireline Competition [49](#wirelesswireline-competition)

e\. Geographical Comparisons: Urban vs. Rural
[52](#geographical-comparisons-urban-vs.-rural)

2\. Resellers [56](#resellers)

3\. Mobile Data [57](#mobile-data)

a\. Introduction [57](#introduction-1)

b\. CMRS Spectrum: Data-Only [59](#cmrs-spectrum-data-only)

c\. CMRS Networks: Data-Only [60](#cmrs-networks-data-only)

d\. Services, Content, and Applications
[61](#services-content-and-applications)

e\. Devices [76](#devices)

f\. Wi-Fi [79](#wi-fi)

g\. Telemetry and Telematics [82](#telemetry-and-telematics)

4\. Satellite Operators [83](#__RefHeading___Toc44340801)

5\. International Comparisons [85](#international-comparisons)

a\. Performance [85](#performance)

b\. Market Environment [87](#market-environment)

c\. Mobile Data Developments [92](#mobile-data-developments)

III\. CONCLUSION [94](#conclusion)

IV\. ADMINISTRATIVE MATTERS [96](#administrative-matters)

Statement of Chairman Powell

Statement of Commissioner Copps

APPENDIX A: Fixed Wireless Voice and Data Services

APPENDIX B: US Investment in Foreign Mobile Operators

APPENDIX C: Lower 700 MHz Auction #44 Results

APPENDIX D: Mobile Telephony Tables

APPENDIX E: Mobile Data Tables

APPENDIX F: Maps

APPENDIX G: List of NOI Commenters

# INTRODUCTION

## Background 

1.  In 1993, Congress created the statutory classification of Commercial
    Mobile Services[^1] to promote the consistent regulation of mobile
    radio services that are similar in nature.[^2] At the same time,
    Congress established the promotion of competition as a fundamental
    goal for CMRS policy formation and regulation. To measure progress
    toward this goal, Congress required the Federal Communications
    Commission ("FCC" or "Commission") to submit annual reports that
    analyze competitive conditions in the industry.[^3] This report is
    the eighth of the Commission's annual reports[^4] on the state of
    CMRS competition.[^5]

2.  Since the release of the *Seventh Report*, the Commission has
    expanded its efforts to improve the quality and granularity of the
    data used to examine competition in the CMRS industry. In December
    2002, the Commission released a Notice of Inquiry ("*NOI*") seeking
    data and information on the status of competition in the CMRS
    industry.[^6] The questions asked in the *NOI* and the comments
    received are discussed in detail below.[^7]

3.  The statute requiring the annual report on CMRS competition states,

> The Commission shall review competitive market conditions with respect
> to commercial mobile services and shall include in its annual report
> an analysis of those conditions. Such analysis shall include an
> identification of the number of competitors in various commercial
> mobile services, an analysis of whether or not there is effective
> competition, an analysis of whether any of such competitors have a
> dominant share of the market for such services, and a statement of
> whether additional providers or classes of providers in those services
> would be likely to enhance competition.[^8]

4.  With the *Eighth Report*, we continue to comply with each of the
    four statutory requirements for analyzing competitive market
    conditions with respect to commercial mobile services. First,
    Section C.(ix), *infra*, identifies the number of CMRS competitors.
    Second, Section C, *infra*, discusses the Commission's analysis of
    effective competition. Like previous reports, this report addresses
    the third issue of whether any competitor has a dominant market
    share in two main ways. First, the report provides data on the total
    number of subscribers served by the 25 largest carriers, which can
    be used to derive subscribership market share figures for such
    carriers on a nationwide basis.[^9] Second, the report includes
    measures of competition, such as churn,[^10] service quality,
    pricing, and market entry, which provide evidence that no single
    carrier is able to act anti-competitively in the marketplace.[^11]
    These figures indicate that while there are several large,
    established carriers in the CMRS industry, they have no guarantee of
    maintaining their market share, and they are faced with consumers
    that would readily leave carriers that attempted to raise prices or
    diminish service quality. Furthermore, in exercising its forbearance
    authority, the Commission has routinely acknowledged that it has
    chosen not to regulate CMRS providers as dominant carriers.[^12]

5.  In addressing the final statutory requirement to provide a statement
    of whether additional providers would likely enhance competition, we
    conclude that the market, as it is currently structured, is
    competitive,[^13] and we include, as has been done in previous
    reports, an analysis of how entry by new competitors has enhanced
    competition.[^14] Nevertheless, we continue to examine ways to
    eliminate barriers to spectrum access in order to encourage entry
    for new competitors.

## Sources of Information

6.  As mentioned above, the Commission issued an *NOI* in December 2002
    seeking data and information on the status of competition in the
    CMRS industry for this report.[^15] The Commission requested data
    based on several metrics, including service availability,
    subscribership, average revenue per unit ("ARPU"), usage, churn, and
    pricing.[^16] For each of these metrics, it requested data on both
    national and sub-national levels, for different demographic groups,
    and broken down by urban and rural areas.[^17] The *NOI* also sought
    comment on the extent to which these various metrics contribute to
    an analysis of CMRS competition.[^18] In order to enhance our
    analysis of CMRS service availability and competition, the
    Commission asked service providers to submit their coverage maps in
    an electronic, mapable format and to distinguish between the areas
    where they offer coverage to subscribers and the areas where they
    market service to new customers.[^19] The *NOI* also requested input
    on whether there is meaningful competition in rural areas and on how
    the Commission should define "rural" for purposes of its analysis of
    CMRS competition.[^20] Furthermore, the *NOI* asked for information
    on service quality, cost of capital, wireless-wireline competition,
    mobile telephone service resellers, and satellite providers, as well
    as mobile data services, service availability, and pricing.[^21]

7.  Parties that submitted comments in response to the *NOI* included
    regional and national wireless operators, rural telephone companies,
    industry trade groups, technology advocacy consortiums, and
    resellers.[^22] Many commenters stated that the CMRS marketplace is
    competitive and cited the data presented in previous reports as
    evidence of that assertion.[^23] These commenters also noted that
    the publicly-available data on the industry that is included in our
    reports is sufficient for analyzing CMRS competition.[^24]
    Furthermore, many commenters addressed the issue of the extent of
    competition in rural areas, and offered suggestions on how to
    analyze data more effectively and how to define rural for purposes
    of this report; such statements and suggestions have been integrated
    into the *Eighth Report* below.[^25] Other commenters provided input
    on the extent to which mobile satellite providers and mobile
    telephone resellers compete in the CMRS industry, and some parties
    submitted information on networks that providers use and plan to use
    to offer high-speed mobile data services.[^26] On the other hand,
    many of the questions posed in the *NOI* were not directly addressed
    in the comments. For example, the Commission did not receive from
    commenters any new data on subscribership, ARPU, usage, churn, or
    pricing on a national or sub-national level, or broken down by
    demographic groups or urban/rural areas. In addition, service
    providers did not submit maps of their coverage areas or distinguish
    between areas where they provide coverage and areas where they
    market service.

8.  Prior to the *Seventh Report*, the Commission based its analysis of
    competition in the CMRS industry solely on numerous
    publicly-available sources of data on the industry. These sources
    included: company filings with the Securities and Exchange
    Commission ("SEC"), data compiled and released by trade associations
    and by other government agencies, reports by securities analysts and
    other research companies and consultants, company news releases and
    web sites, newspaper and periodical articles, and the Commission's
    Universal Licensing System ("ULS") database. In the *Seventh*
    *Report*, the Commission added two new sources of information: the
    Numbering Resource Utilization / Forecast ("NRUF") database,
    described below, and information submitted at a Public Forum held in
    February 2002. The Public Forum was held in order to examine ways in
    which to better gather and analyze data for its reports, in
    particular data regarding the development of competition in rural
    and underserved areas.[^27] And for the *Eighth Report*, we have
    included the relevant information submitted in response to the
    *NOI*. Nevertheless, we continue to rely primarily on the
    aforementioned publicly-available sources and believe that they,
    when taken together, allow us to analyze the extent of competition
    in the industry on a nationwide basis. Because many of these
    publicly-available sources report national averages that reflect
    trends in the nation as a whole or in urban markets, they may
    provide limited insight into the extent of competition in
    sub-national markets and in rural areas. However, the additional
    sources included in the *Seventh* and *Eighth Reports* -- the NRUF
    data and the information submitted at the Public Forum and in
    response to the *NOI* -- have enabled us to conduct a more granular
    analysis of competition on a sub-national level and on an
    urban/rural basis.

9.  In order to further uphold the integrity of our data on CMRS
    competition, we include, in many places, multiple data sources to
    report on the same metric or depict the same trend. For example,
    this report and previous reports have included data from three
    separate sources -- the U.S. Department of Commerce Bureau of Labor
    Statistics ("BLS"); economic research and consulting firm, Econ One;
    and the Cellular Telecommunications and Internet Association
    ("CTIA") -- on the average price of mobile telephone service, all of
    which have shown the price of service declining.[^28] In addition to
    using multiple sources for many metrics, we also emphasize that some
    of the sources upon which we rely, particularly SEC filings, are
    required by law to be accurate, and are scrutinized by independent
    third parties. The CTIA metrics used in the report are compiled and
    aggregated by an independent third party in a manner that protects
    carrier confidentiality, provides an incentive for carrier
    participation, and maintains the integrity of the results.[^29]
    Furthermore, other carrier-reported data included in the report,
    such as coverage maps, are subject to contractual obligations with
    customers. Because all carrier-reported data is compiled by the
    carriers themselves and typically released in the aggregate to
    protect confidentiality, we are unable to have in-depth knowledge of
    the minutia of such data. However, we believe it is appropriate to
    use these sources in our analysis of CMRS competition for the
    reasons stated above.

10. As mentioned above, the *Seventh Report* integrated a new source of
    data submitted directly to the FCC, the NRUF database.[^30] The NRUF
    data tracks phone number usage by all telecommunications carriers,
    including wireless carriers, in the United States. All mobile
    wireless carriers must report to the FCC which of their phone
    numbers have been assigned to end users, thereby permitting the
    Commission to make an accurate estimate of the total number of
    mobile subscribers. As in the *Seventh Report*, we continue to use
    the NRUF data to determine the total number of mobile telephone
    subscribers and paging subscribers.[^31] In addition, because we
    collect NRUF data on a small, rate center area basis,[^32] we can
    use this information to estimate mobile telephone subscribership
    levels and penetration rates on a regional basis in addition to a
    national basis. In the *Seventh Report*, the Commission therefore
    began reporting mobile telephone penetration rates on an EA basis
    and continues to report them in this manner in this report.[^33]

11. One of the most important metrics that the Commission has tracked
    since 1995 is the number of facilities-based mobile telephone
    carriers providing service in a particular geographic area.[^34] To
    track service launches by broadband Personal Communications Services
    ("broadband PCS" or "PCS") and Specialized Mobile Radio ("SMR")
    operators, the Commission has analyzed publicly-available
    information released by the operators, such as news releases,
    filings with the SEC, coverage maps available on operators' Internet
    sites, and filings with the Commission. The Commission has based its
    analysis of cellular coverage on cellular licensees' service area
    boundary maps, which are filed with the Commission. The Commission
    began tracking service launches on a BTA-by-BTA[^35] basis in 1995,
    but switched to the more detailed, county-by-county basis in the
    *Fifth Report* in an effort to improve accuracy and significantly
    reduce the level of overcounting.[^36] It has derived from this data
    the number of competitors operating in every U.S. county and hence
    the percentage of the U.S. population living in areas with a certain
    number of competitors.[^37] This data has also been used to derive
    the percentage of the U.S. population living in counties with
    digital coverage. As mentioned in previous reports, there are
    several important caveats to note when considering the data. First,
    to be considered as "covering" a county, an operator need only be
    offering any service in a portion of that county. Second, multiple
    operators shown as covering the same county are not necessarily
    providing service to the same portion of that county. Third, the
    figures for POPs[^38] and land area in this analysis include all of
    the POPs and every square mile in a county considered to have
    coverage. Therefore, our analysis overstates to some unknown and
    unavoidable degree the total coverage in terms of both geographic
    areas and population covered. On the other hand, we believe our
    analysis to be the most accurate in the industry today given the
    coverage data that is publicly available.

## Status of Competition

12. Using the various information sources described above -- the
    publicly-available sources used in several previous reports, the
    NRUF database, as well as the data and statements provided at the
    Public Forum and in the *NOI* comments -- we have been able to
    examine in this report several structural and performance measures
    of competition in the CMRS industry. These measures include the
    nature and number of market participants, the geographic extent of
    service deployment, technological improvements and upgrades, price
    competition, investment, usage patterns, churn, subscriber growth,
    and product innovations, among other things. After analyzing these
    various measures, we conclude that there is effective competition in
    the CMRS marketplace.

13. Regarding rural areas specifically, we also conclude that CMRS
    providers are competing effectively in such areas. Moreover, while
    it appears that, on average, a smaller number of operators are
    serving rural areas than urban areas, this difference does not
    necessarily indicate that effective CMRS competition does not exist
    in rural areas.[^39] On the contrary, as discussed in more detail
    below, data and statements presented by Public Forum participants
    and *NOI* commenters provide evidence that, despite the differing
    structure of rural markets, effective CMRS competition does exist in
    rural areas.[^40] Wireless carriers serving rural areas describe the
    competition as "real,"[^41] "significant"[^42] and
    "sufficient."[^43] The most recently released data provided by Econ
    One, which was also included in the *Seventh Report*, showed that
    the average price of mobile telephone service in rural areas appears
    to be very similar to the average price in urban areas.[^44] Indeed,
    at least one *NOI* commenter noted that nationwide and urban price
    trends have acted to constrain prices in rural areas, even where the
    total number of operators may be lower.[^45] Furthermore, in
    addition to competing with each other, CMRS carriers in rural areas
    may also provide competition to incumbent local exchange carriers.
    One commenter that provides mobile telephone services in rural areas
    stated that it "competes with wireline telephone companies as well
    as wireless companies" and that "\[c\]onsumers are enjoying a
    facilities-based competitive alternative to the local service
    formerly offered on a monopoly basis by the ILECs."[^46] In rural
    areas where wireless networks may be an efficient technology for
    providing any type of telephone service, additional CMRS providers
    may enhance not only CMRS competition but wireline competition as
    well, benefiting consumers by increasing customer choice, offering
    innovative services, and introducing new technologies.

14. In preparation for its ninth annual report and analysis of CMRS
    competition, the Commission will be issuing another Notice of
    Inquiry seeking additional and updated data from the public on the
    state of CMRS competition, particularly in rural areas and on a
    sub-national level. With this next Notice, we hope to build on the
    information employed in this year's report and to obtain a wider
    range of facts and opinions from the public comments in order to
    assist in our analysis. We also plan to explore other avenues for
    data collection, such as contract research, for the next
    report.[^47] In addition, for the next report, we will continue
    efforts to improve our approaches to collecting and evaluating the
    various types of data and information that are available in order to
    assess the status of competition in the CMRS industry. In
    particular, we plan to seek comment on the interrelationship among
    dimensions of industry structure, indicators of operator conduct,
    and other relevant measures of market conditions.

## Structure of Report

15. As stated in previous reports, mobile voice and mobile data[^48]
    services are no longer clearly delineated in the marketplace. Many
    mobile voice operators also offer mobile data services using the
    same spectrum, network facilities, and customer equipment.
    Furthermore, many U.S. mobile carriers have integrated the marketing
    of mobile voice and data services. For these reasons, we find it
    reasonable to analyze these services together in the *Eighth Report*
    in a larger, more cohesive section on the CMRS industry as a whole
    (Section II.C). This section includes a sub-section discussing the
    market structure and performance metrics and analyses related to
    mobile telephone operators,[^49] many of which are now relevant to
    both mobile voice and mobile data services.[^50] Section II.C
    includes another sub-section discussing individual mobile data
    services, devices, and related developments.[^51] This sub-section
    also provides information on those mobile data providers that offer
    only mobile data services, instead of both voice and data services,
    in many cases on networks distinct from those traditionally used to
    provide mobile voice.

16. The *Eighth Report* also provides an overview, for background
    purposes, of the spectrum and networks that mobile telephone
    operators currently use to offer both voice and data services, prior
    to the discussion of CMRS industry developments.[^52]

## Industry Development

17. During 2002, the CMRS industry continued to experience increased
    service availability, lower prices for consumers, innovation, and a
    wider variety of service offerings.[^53] The mobile telephony sector
    of CMRS has shown significant growth in spite of the difficult
    general economic environment, and mobile data services have begun to
    play a more significant role in the CMRS industry. In the 12 months
    ending December 2002, the mobile telephony sector generated over
    \$76 billion in revenues,[^54] increased subscribership from 128.5
    million to 141.8 million,[^55] and produced a nationwide penetration
    rate of roughly 49 percent.[^56] One analyst estimates that 11.9
    million, or 8 percent, of the 141.8 mobile telephone subscribers at
    the end of 2002 subscribed to some type of mobile Internet
    service.[^57] An additional 2.3 million consumers subscribed to
    mobile Internet services on data-only mobile devices at the end of
    2002.[^58]

18. To date, 270 million people, or 95 percent of the total U.S.
    population, live in counties with access to three or more different
    operators (cellular, broadband PCS, and/or digital SMR providers)
    offering mobile telephone service, a slight increase from what the
    Commission found in the *Seventh Report*.[^59] More than 236 million
    people, or 83 percent of the U.S. population, live in counties with
    five or more mobile telephone operators competing to offer
    service.[^60] Mobile telephone carriers continued to upgrade their
    networks with next generation technologies that allow them to offer
    mobile data services at higher data transfer speeds typically
    ranging from 30 to 70 kilobits per second ("kbps"), with maximum
    data rates of up to 144 kbps for some carriers. As of March 2003,
    operators were offering services over these next generation networks
    in at least some portion of U.S. counties containing 265 million
    people, or 93 percent of the U.S. population.[^61] Furthermore, the
    average price of mobile telephone service has declined during the
    year since the *Seventh Report*, continuing the trend of the last
    several years.[^62] At the same time, one survey indicates that the
    average revenue per minute of mobile telephone use fell 9 percent
    between 2001 and 2002.[^63]

19. Mobile data providers, which include both mobile telephone carriers
    and companies that offer data-only mobile services, began offering a
    variety of new services to consumers during the past year, including
    downloadable ring tones and graphics, multimedia messaging services
    ("MMS"),[^64] and interactive gaming.[^65] In addition, the more
    established mobile data services, such as text messaging and e-mail,
    continued to grow in popularity.[^66] It is estimated that 20
    percent of all mobile telephone subscribers used text messaging
    services during the fourth quarter of 2002.[^67] Furthermore, while
    the use of paging devices has declined substantially over the past
    four years, we estimate there were 14.1 million paging units in
    service at the end of 2002.[^68]

#  {#section .unnumbered}

# Discussion and ANALYSIS

## Spectrum Allocation

### Current Allocation/Licensing

20. Currently, mobile telephone operators primarily use three types of
    spectrum licenses to provide mobile voice and, in most cases, mobile
    data services:[^69] cellular, broadband PCS, and SMR.[^70] This
    information is provided as a basis for understanding the formation
    of the current industry structure. However, we continue to take
    steps to increase spectrum flexibility and availability.[^71]

21. [Cellular]{.underline} -- The Commission began licensing commercial
    cellular providers in 1982 and completed licensing the majority of
    operators by 1991. The Commission divided the United States and its
    possessions into 734 cellular market areas ("CMAs"), including 305
    MSAs, 428 RSAs, and a market for the Gulf of Mexico.[^72] Two
    cellular systems were licensed in each market area. The Commission
    designated 50 megahertz of spectrum in the 800 MHz frequency band
    for the two competing cellular systems in each market (25 megahertz
    for each system). Initially, cellular systems offered service using
    analog technology, but today most of the service offered using
    cellular spectrum is digital.[^73]

22. [Broadband PCS]{.underline} -- Broadband PCS is similar to cellular
    service, except that broadband PCS systems operate in different
    spectrum bands and have been designed from the beginning to use a
    digital format. Broadband PCS licenses have been assigned through
    auction, beginning in 1995.[^74] The most recent broadband PCS
    auction was completed in 2001.[^75] The Commission has set aside the
    spectrum between 1850 MHz and 1990 MHz for broadband PCS. This
    spectrum includes 120 megahertz used for mobile telephony, divided
    originally into three blocks of 30 megahertz each (blocks A, B,
    and C) and three blocks of 10 megahertz each (blocks D, E, and
    F).[^76] Two of the 30 megahertz blocks (A and B blocks) are
    assigned on the basis of 51 Major Trading Areas ("MTAs").[^77] One
    of the 30 megahertz blocks (C block) and all three of the 10
    megahertz blocks are assigned on the basis of 493 BTAs.[^78]

23. [SMR]{.underline} - The Commission first established SMR in 1979 to
    provide for land mobile communications on a commercial basis. The
    Commission initially licensed spectrum in the 800 and 900 MHz bands
    for this service, in non-contiguous bands, on a site-by-site
    basis.[^79] The Commission has since licensed additional SMR
    spectrum through auctions.[^80] In total, the Commission has
    licensed 19 megahertz of SMR spectrum, plus an additional 7.5
    megahertz of spectrum that is available for SMR as well as other
    services.[^81] While Commission policy permits flexible use of this
    spectrum, including the provision of paging, dispatch, mobile voice,
    mobile data, facsimile, or combinations of these services,[^82] the
    primary use for SMR traditionally has been dispatch services.[^83]
    Dispatch differs from mobile voice communications offered by PCS and
    cellular carriers in that it allows both one-to-one and one-to-many
    communication (including real-time conferencing with groups), and it
    generally does not operate through interconnection with the public
    switched telephone network.[^84] SMR systems have also had the
    ability to offer interconnected service, but until the development
    of digital technologies, analog SMR systems had limited capacity to
    provide mobile telephony. In recent years, however, the nature of
    SMR service has evolved significantly. SMR providers such as Nextel
    Communications, Inc. ("Nextel") and Southern LINC, a unit of energy
    concern Southern Company, have used digital technologies to increase
    spectral efficiency and to become more significant competitors in
    mobile telephony, while also providing dispatch functionality (also
    know as "push-to-talk") as a part of their service offerings.[^85]
    Furthermore, in apparent response to the dispatch functionality of
    SMR services, cellular and broadband PCS carriers have recently
    begun to offer dispatch-like options (*e.g.*, group calling and
    conferencing) as part of their service offerings, particularly for
    businesses.[^86] Some cellular and broadband PCS carriers have said
    that they plan to offer push-to-talk functionality on their networks
    in 2003.[^87] SMR spectrum is also used for certain data-only
    networks.[^88]

24. [Available Licenses]{.underline} -- In every geographical area of
    the country, the Commission initially authorized up to eight
    different mobile telephony licenses (two cellular and six broadband
    PCS), not including additional digital SMR licenses.[^89] Moreover,
    under Commission rules, broadband PCS, cellular, and auctioned SMR
    licensees may, with Commission approval, disaggregate (divide the
    spectrum into smaller amounts of bandwidth) or partition (divide the
    license into smaller geographical areas) their licenses, or both, to
    other entities.[^90] Many licensees hold more than one license in a
    particular market. While no longer in operation, the Commission's
    CMRS spectrum cap molded the current distribution of spectrum
    licenses. Under the spectrum cap, no entity could control more than
    45 megahertz of cellular, broadband PCS, and SMR[^91] spectrum in an
    MSA, or more than 55 megahertz in an RSA.[^92] In November 2001,
    however, the Commission raised the spectrum cap to 55 megahertz in
    all markets, and decided to eliminate the restriction entirely
    effective January 1, 2003.[^93] In addition, the Commission
    restricts an entity from having certain cross-interests in cellular
    licenses on both blocks within an RSA.[^94]

### 700 MHz Bands

25. One of the Commission's primary goals in recent years has been to
    establish service rules in new and reallocated spectrum bands that
    will promote innovative services and encourage the flexible and
    efficient use of the spectrum resource.[^95] In recent years the
    Commission has addressed its statutory directives under Section
    309(j) of the Communications Act by addressing the growing
    complexities of spectrum management using approaches consistent with
    general market-based principles. One example of this is the 700 MHz
    spectrum that is being reclaimed from use by broadcast services in
    connection with the transition of the analog television service to
    digital television. The reclamation of television spectrum has been
    addressed in two parts, primarily as a result of different statutory
    requirements applicable to the two bands and differing degrees of
    incumbency in the two bands.[^96] These two bands are the 698-746
    MHz (known as the "Lower 700 MHz") band and the 746-806 MHz (or
    "Upper 700 MHz") band. The Upper 700 MHz Band is currently used by
    TV stations on Channels 60-69 and comprises 60 megahertz, while the
    Lower 700 MHz Band, which is used by TV stations on Channels 52-59,
    comprises 48 megahertz of spectrum.[^97]

26. Seventy-eight megahertz of the total 108 megahertz of Upper and
    Lower 700 MHz spectrum will generally be open to a broad range of
    flexible uses.[^98] Pursuant to statutory mandate, licenses for this
    spectrum will be assigned through competitive bidding.[^99] These
    bands have many permissible uses: winning bidders may use the
    spectrum for fixed, mobile (including mobile wireless commercial
    services), and broadcast services.[^100] The Commission expects that
    many of the new technologies to be developed and deployed in this
    band will support advanced wireless applications.[^101] However,
    much of the Upper and Lower 700 MHz spectrum is currently encumbered
    by television broadcasters, and may remain so until the end of
    period when broadcasters convert from analog to digital transmission
    systems.[^102] That period is defined by statute.[^103]
    Nevertheless, there may be some portions of these bands that are not
    so encumbered and are available for immediate use by new entrants.

27. The Balanced Budget Act of 1997 and subsequent legislation initially
    directed the Commission to license these reclaimed spectrum bands
    well in advance of the end of the DTV transition period.[^104]
    Pursuant to statutory deadlines established in that legislation, the
    Commission announced that it would conduct auctions of the Upper 700
    MHz band (Auction No. 31) and Lower 700 MHz band (Auction No. 44)
    starting on June 19, 2002.[^105] In response to concerns over this
    schedule and questions about whether the statutory auction deadlines
    that had been enacted in that legislation were "consistent with
    sound telecommunications policy and spectrum management principles,"
    Congress passed, and the President signed into law, the Auction
    Reform Act of 2002.[^106] The Auction Reform Act eliminated these
    statutory deadlines. Further, the Auction Reform Act provided the
    Commission with discretion to "determine the timing of and deadlines
    for the conduct of competitive bidding under \[Section 309(j) of the
    Communications Act of 1934, as amended\], including the timing of,
    and deadlines for, qualifying for bidding; conducting auctions;
    collecting, depositing, and reporting revenues; and completing
    licensing processes and assigning licenses."[^107]

28. The Auction Reform Act ordered the Commission to delay the A, B, and
    E block portion of Auction No. 44 (Lower 700 MHz) and the entire
    Auction No. 31 (Upper 700 MHz), yet it also directed the Commission
    to proceed with an auction of the C and D blocks starting "no
    earlier than August 19, 2002, and no later than September 19,
    2002."[^108] On September 18, 2002, the initial auction of Lower 700
    MHz C and D block licenses (Auction No. 44) closed, raising \$88.7
    million in net bids.[^109] The Commission offered 740 licenses: one
    12 megahertz license in 734 CMAs, and one 6 megahertz license in 6
    Economic Area Groupings ("EAG").[^110] The Commission selected CMAs
    as the license areas in part to address the needs of small,
    regional, and rural carriers.[^111] A total of 102 bidders won 484
    licenses;[^112] 47 of the winning bidders were rural telcos, and
    they won 136 licenses.[^113]

29. On March 4, 2003, the Commission announced that it would reauction
    the licenses that did not have winning bidders in auction 44.[^114]
    On June 13, 2003, the Federal Communications Commission completed
    the auction of 256 licenses in the Lower 700 MHz band C and D blocks
    (Auction No. 49), raising (in net high bids) a total of \$56.8
    million.[^115] In that auction, 35 winning bidders won a total of
    251 licenses.[^116]

30. As required by the Auction Reform Act, we have prepared a report
    announcing when we intend to reschedule the remaining 700 MHz band
    auctions, and submitted the report to Congress on June 19,
    2003.[^117]

### Future Allocation/Licensing

31. As discussed in the *Seventh Report*, U.S. mobile carriers have the
    flexibility to deploy technologies, including those commonly called
    Third Generation or "3G," that will allow them to offer high-speed
    mobile data services using their existing CMRS spectrum.[^118]
    Nevertheless, the Commission has continued its efforts over the past
    year to allocate and license additional spectrum suitable for
    offering advanced wireless services. Since the publication of the
    *Seventh Report*, the Commission, in conjunction with the National
    Telecommunications and Information Administration ("NTIA"),
    allocated 90 megahertz of spectrum that can be used to offer
    advanced wireless, including 3G, services: 1710-1755 MHz, which is
    currently used by the Department of Defense, and 2110-2155 MHz,
    which is currently used by private and common carrier fixed
    microwave licensees and by Multipoint Distribution Service ("MDS")
    licensees.[^119] In November 2002, the Commission released a *Notice
    of Proposed Rulemaking* seeking comment on service rules for
    offering advanced wireless services in these bands, including
    provisions for licensing, operational and technical rules, and for
    competitive bidding.[^120] On February 10, 2003, we released an
    order reallocating 30 megahertz of spectrum from the Mobile
    Satellite Service in the 2 GHz band ("2 GHz MSS") to fixed and
    mobile services that can be used to provide a variety of advanced
    wireless services. With this action, we preserved 40 megahertz of
    spectrum in the 2 GHz band for MSS.[^121]

32. In addition, the Commission in May 2002 implemented service rules
    for 27 megahertz of spectrum in seven different bands that had been
    reallocated for non-government use.[^122] The Commission determined
    that four of these bands -- 1390-1392 MHz, 1392-1395/1432-1435 MHz,
    1670-1675 MHz, and 2385-2390 MHz -- would be open to flexible use
    and licensed by competitive bidding, while the remaining three would
    be licensed for telemetry services on a frequency coordinated
    site-by-site basis.[^123] In April 2003, the Commission auctioned
    the 1670-1675 MHz band as a single, nationwide license, and the
    license was purchased by OP Corporation for \$12.6 million.[^124]

## Network Overview

33. As mentioned above, many mobile telephony carriers use not only the
    same spectrum bands but also the same network design and
    technologies to offer both voice and data services. While different
    carriers have chosen different technology migration paths, which are
    described below,[^125] all are in the process of upgrading their
    networks in order to improve capacity, increase their advanced
    service offerings, and/or provide compatibility for their roaming
    partners' customers. Furthermore, many carriers have continued to
    expand their networks in order to increase their competitiveness
    with more established operators.

### Network Design

34. Cellular, PCS, and digital SMR networks use the same basic design.
    All use a series of low-power transmitters to serve relatively small
    areas ("cells"), and all employ frequency reuse to maximize spectrum
    efficiency.[^126] In the past, cellular and SMR networks used an
    analog technology, while PCS networks were designed from the start
    to use a digital format. Digital technology provides better sound
    quality and increased spectral efficiency than analog technology.
    Competitive forces combined with increased capacity have induced
    companies to offer calling plans with large buckets of relatively
    inexpensive minutes, free enhanced services such as voicemail and
    caller ID, and wireless data and mobile Internet offerings.[^127]
    From a customer's perspective, digital service in the cellular band
    or SMR bands is virtually identical to digital service in the PCS
    band. Digital technology is now dominant in the mobile telephone
    sector, with approximately 88 percent of all wireless subscribers
    using digital service.[^128]

### Network Technology

35. The four main digital technologies used in the United States are:
    Code Division Multiple Access ("CDMA"), Global System for Mobile
    Communications ("GSM"), integrated Digital Enhanced Network
    ("iDEN"), and Time Division Multiple Access ("TDMA"). These four
    technologies are commonly referred to as Second Generation, or "2G,"
    because they succeeded the first generation of analog cellular
    technology, Advanced Mobile Phone Systems ("AMPS").[^129] As
    discussed in the *Seventh Report*, as a result of industry
    developments, this report no longer distinguishes between TDMA and
    GSM networks in its analysis of digital coverage, but considers the
    two as one migration path towards more advanced digital
    capabilities. We recognize that TDMA as currently deployed will
    continue to be used by millions of subscribers for a number of
    years.[^130]

36. Beyond the 2G digital technologies, mobile telephone carriers have
    been deploying next-generation network technologies[^131] that allow
    them to offer mobile data services at higher data transfer speeds
    and, in some cases, increase voice capacity. TDMA/GSM carriers are
    deploying General Packet Radio Service ("GPRS" or "GSM/GPRS"), a
    packet-based data-only network upgrade that allows for faster data
    rates by aggregating up to eight 14.4 kbps channels.[^132] GPRS's
    maximum data throughput rate is 115 kbps, but customers typically
    experience download speeds ranging from 30 to 60 kbps.[^133] After
    rolling out GPRS, most U.S. TDMA/GSM carriers plan to deploy
    Enhanced Data Rates for GSM Evolution ("EDGE") and eventually
    Wideband CDMA ("WCDMA," also known as Universal Mobile
    Telecommunications System, or "UMTS").[^134] EDGE and WCDMA are
    expected to raise peak network speeds to 384-473 kbps and 2-2.4
    Mbps, respectively.[^135]

37. Many CDMA carriers have been upgrading their networks to CDMA2000
    1xRTT (also referred to as "CDMA2000 1X" or "1xRTT"), a technology
    that doubles voice capacity and allows maximum data throughput rates
    of 144 kbps.[^136] Actual download speeds range from 30 to 70
    kbps.[^137] The next step in the CDMA migration beyond 1xRTT is
    CDMA2000 1X EV-DO (evolution-data only, "EV-DO") or 1X EV-DV
    (evolution data and voice, "EV-DV"), which allow maximum data
    throughput speeds of 2.4 and 3.09 Mbps,[^138] respectively, and
    actual speeds ranging from 300 to 700 kbps.[^139]

## CMRS Industry

### Mobile Telephony Overview and Analysis

38. This report defines the mobile telephone sector to include all
    operators that offer commercially available, interconnected mobile
    voice services. These operators provide access to the public
    switched telephone network ("PSTN") via mobile communication devices
    employing radiowave technology to transmit calls. As discussed
    above, providers using cellular radiotelephone, broadband PCS, and
    SMR licenses dominate this sector.[^140] Because these licensees
    offer mobile telephone services that are essentially interchangeable
    from the perspective of most consumers, they are discussed in this
    report as a cohesive industry sector.

39. The discussion below describes the mobile telephone sector as a
    whole and includes sections on market structure, market performance,
    pricing, wireless-wireline competition, and urban-rural comparisons.
    This is followed by discussions of resellers, mobile data services,
    and mobile telephone satellite providers, as well as international
    comparisons.

#### Market Structure

40. In the United States, there are six mobile telephone operators that
    analysts typically describe as nationwide: AT&T Wireless, Sprint
    PCS,[^141] Verizon Wireless, LLC ("Verizon Wireless"),[^142]
    T-Mobile,[^143] Cingular Wireless, LLC ("Cingular Wireless" or
    "Cingular"),[^144] and Nextel. When an operator is described as
    being "nationwide," it does not necessarily mean that the operator's
    license areas, service areas, or pricing plans cover the entire land
    area of the United States. The six mobile telephony carriers that
    analyst reports typically describe as nationwide all offer service
    in at least some portion of the western, midwestern, and eastern
    United States. In addition, each of the six national operators has
    networks covering at least 200 million people, while the next
    largest provider covers less than 60 million people.[^145] In
    addition to the nationwide operators, there are a number of large
    regional players, including ALLTEL Corp. ("ALLTEL"), Western
    Wireless Corp. ("Western Wireless"), United States Cellular Corp.
    ("US Cellular"), and Dobson.

41. Since the end of 1999, carriers have been building nationwide
    footprints[^146] through various forms of transactions.[^147] One of
    the driving forces behind many of these transactions has been the
    desire of large regional carriers to enhance their ability to
    compete with existing nationwide operators that offer attractive
    nationwide pricing plans.[^148] Also, as the Commission has
    previously concluded, operators with larger footprints can achieve
    certain economies of scale and increased efficiencies compared to
    operators with smaller footprints.[^149] More recently, national
    operators have sought to fill in gaps in their coverage areas,[^150]
    as well as to increase the capacity of their existing networks.
    Since the writing of the *Seventh Report*, a number of transactions
    between market participants have been announced. We discuss the
    transactions involving the largest impact, either through the
    exchange of subscribers or spectrum licenses, on the structure of
    the market below. In addition, we discuss some of the carriers that
    have declared bankruptcy and/or announced other restructuring plans
    during the past year.

###### Sales and Swaps

42. *Verizon Wireless/Northcoast Communications* -- On December 19,
    2002, Verizon Wireless announced that it had signed an agreement
    with Northcoast Communications, LLC ("Northcoast") to purchase 50 of
    Northcoast's 56 PCS licenses, as well as related network assets, for
    approximately \$750 million in cash.[^151] The fifty 10-megahertz
    licenses cover roughly 47 million people in parts of the Midwest and
    East Coast, including New York and Boston.[^152] Verizon Wireless
    stated that the additional spectrum would help it to increase
    capacity on its network.[^153] The deal did not include the
    Cleveland market, where Northcoast is currently providing service
    under the brand name "Northcoast PCS."[^154] The Wireless
    Telecommunications Bureau granted consent to the transaction on
    April 8, 2003.[^155]

43. *Triton PCS/Lafayette Communications* -- During 2002, Triton PCS
    announced agreements to acquire substantially all of the spectrum
    licenses of its affiliate, Lafayette Communications
    ("Lafayette").[^156] Triton PCS completed the acquisition of nine
    Lafayette licenses in the third quarter of 2002, paid for with the
    extinguishment of approximately \$22 million in debt that Lafayette
    owed to Triton PCS.[^157] Triton PCS said that the acquisition was
    undertaken to meet the spectrum needs of its current network overlay
    of GSM/GPRS technology.[^158] In the fourth quarter of 2002, Triton
    PCS entered into agreements with Lafayette for the acquisition of
    most of Lafayette's remaining spectrum licenses for approximately
    \$127 million.[^159] The Wireless Telecommunications Bureau granted
    consent to the transactions on April 30, 2003.[^160] During 2001,
    Lafayette had acquired PCS licenses covering a population of
    approximately 6.3 million people in areas of Georgia, South
    Carolina, Tennessee, and Virginia.[^161]

44. *AT&T Wireless/US Cellular* -- On March 10, 2003, AT&T Wireless and
    US Cellular announced that they had signed an agreement to swap
    licenses and assets across 15 states and covering more than 18
    million people.[^162] In this transaction, US Cellular is acquiring
    PCS licenses (but no networks) in 13 states in the Midwest and
    Northeast covering 16.6 million people, as well as \$31 million in
    cash.[^163] AT&T Wireless is acquiring cellular licenses in Florida
    and Georgia, covering about 1.5 million people, as well as network
    facilities and 141,000 customers.[^164] The acquisition fills a gap
    in AT&T Wireless's network[^165] and may reduce the company's
    roaming expenses in Florida.[^166] The deal, pending regulatory
    approval, is expected to close in the second half of 2003.[^167]

###### Joint Ventures

45. *Cingular Wireless/AT&T Wireless* -- As discussed in the *Seventh
    Report*, in January 2002, Cingular Wireless and AT&T Wireless
    announced the formation of an infrastructure joint venture to build
    out a GSM/GPRS network along 3,000 miles of interstate highways
    predominantly in western and midwestern states.[^168] The companies
    have since expanded the venture to include highways in New England,
    increasing the coverage of the joint venture to more than 4,000
    miles of roads.[^169] The companies also recently announced a new
    agreement to reduce roaming costs on each other's networks.[^170]

46. *AT&T Wireless/Sprint PCS* -- In January 2003, AT&T Wireless and
    Sprint PCS signed an agreement through which they will cooperate in
    the construction of new wireless towers.[^171] Under the terms of
    the agreement, the companies will share information about their
    current tower inventories and future construction plans.[^172] This
    includes identifying areas of overlap; determining which company
    will build and maintain the tower; and deciding which will co-locate
    its network facilities on it.[^173] The companies claim that the
    arrangement will enable them to reduce the number of towers needed
    and the associated capital expenditures, thus enhancing their
    wireless footprints faster and at lower cost. [^174]

47. *Cingular Wireless/T-Mobile* -- As mentioned in the *Seventh
    Report*, Cingular Wireless and T-Mobile (then known as VoiceStream)
    announced an infrastructure sharing joint venture in October 2001
    whereby the companies would share their existing GSM networks in
    California, Nevada, and New York.[^175] Since then, in July 2002,
    T-Mobile launched service in California and Nevada (where Cingular
    already offered service), while Cingular launched service in New
    York City (where T-Mobile already offered service). [^176]

###### Restructurings

48. *Leap Bankruptcy* -- On April 13, 2003, Leap Wireless International,
    Inc. ("Leap")[^177] filed a voluntary petition for reorganization
    under Chapter 11 of the U.S. Bankruptcy Code in the United States
    Bankruptcy Court for the Southern District of California.[^178]
    Based on Leap's fiscal 2002 results, the company's net loss for 2002
    was \$664.8 million on revenues of \$618.5 million, with debt of
    almost \$2.5 billion.[^179] The company stated that daily operations
    will continue during reorganization, and that it does not expect to
    implement any organization changes or dismiss employees as a result
    of the filing.[^180] The company also expects that, under any plan
    of reorganization agreed to with its creditors, there will be little
    or no value left in the company for common stockholders.[^181]
    Leap's stock was delisted from the NASDAQ stock exchange in December
    2002.[^182]

49. *Ntelos Bankruptcy* -- Ntelos, Inc. ("Ntelos") filed for Chapter 11
    bankruptcy protection in the U.S Bankruptcy Court for the Eastern
    District of Virginia on March 4, 2003.[^183] Ntelos, which had
    266,000 wireless customers at the end of 2002 in Virginia, West
    Virginia, Kentucky, Tennessee, and North Carolina, had missed
    interest payments of more than \$24 million on loans from commercial
    debt holders in February 2003.[^184] Under the terms of its loan
    agreements, Ntelos had a 30-day grace period before it was
    considered to be in default.[^185] The company does not expect the
    bankruptcy filing to affect its operations.[^186]

50. *iPCS Bankruptcy* -- On February 24, 2003, Sprint PCS affiliate
    AirGate PCS, Inc. ("AirGate") announced that its wholly-owned
    subsidiary, iPCS Inc. ("iPCS") filed a Chapter 11 bankruptcy
    petition in the United States Bankruptcy Court for the Northern
    District of Georgia.[^187] At the time of its acquisition by AirGate
    in November 2001,[^188] iPCS had licenses covering more than 7.4
    million people in Illinois, Michigan, Iowa, and eastern Nebraska,
    and served roughly 30,000 customers.[^189]

51. *NextWave Telecommunications Inc. and NextWave Power Partners, Inc.*
    ("NextWave") --NextWave, a wireless carrier with 95 C, D, E and F
    block PCS licenses covering 174 million POPs, recently announced
    that it will move forward with its bankruptcy reorganization
    efforts.[^190]

###### Withdrawn IPO

52. On January 29, 2003, Verizon announced that Verizon Wireless had
    withdrawn its registration for an initial public offering
    ("IPO").[^191] Verizon Wireless filed the initial registration
    statement on August 24, 2000.[^192] Verizon said that the IPO was no
    longer needed because of strong cash flow at Verizon Wireless and
    its lack of significant funding requirements.[^193]

###### Affiliations

53. Three of the nationwide operators also have extended their coverage
    through contractual affiliations with smaller carriers. These
    affiliations create a "family" of operating companies with much
    closer relationships than those formed by traditional roaming
    agreements.[^194] All of these affiliations were established to
    accelerate the build-out of the larger companies' networks by
    granting smaller affiliates the exclusive right to offer mobile
    services for those companies, in some cases under the larger
    companies' brand names, in selected mid-sized and smaller
    markets.[^195]

54. *AT&T* *Wireless* -- The AT&T Wireless family consists of AT&T
    Wireless, as well as its affiliations with two companies: Triton PCS
    and Edge Wireless, LLC ("Edge").[^196] In the case of Triton PCS,
    AT&T Wireless sold portions of some of its broadband PCS licenses to
    the company in exchange for a minority ownership interest.[^197]
    While Triton PCS is marketed under the brand name SunCom[^198] and
    Edge is marketed under its own name, both companies provide service
    as a "Member of the AT&T Wireless Network." These affiliates, like
    AT&T Wireless, have committed to upgrading their TDMA networks to
    GSM/GPRS.[^199]

55. *Nextel* -- The Nextel family consists of Nextel and Nextel
    Partners, Inc. ("Nextel Partners"). In an arrangement similar to
    that of AT&T Wireless with its affiliates,[^200] in 1999, Nextel
    sold some of its SMR licenses to Nextel Partners in exchange for a
    minority ownership interest in the company.[^201] Nextel Partners is
    building out an iDEN network compatible with Nextel's, and Nextel
    assists Nextel Partners in obtaining terms similar to those Nextel
    receives from vendors for equipment and services.[^202] Both Nextel
    and Nextel Partners market their services under the Nextel brand
    name.

56. *Sprint PCS* -- The Sprint PCS family consists of Sprint PCS and 10
    affiliates.[^203] Each of the affiliates has an agreement with
    Sprint PCS to use the latter's PCS licenses to deploy CDMA
    technology and Sprint PCS-branded service in specific areas of the
    country.[^204] In return, Sprint PCS receives 8 percent of the
    affiliates' local service revenue.[^205] In addition, Sprint PCS
    performs back-office tasks at cost for most of its affiliates,
    giving them the benefits of economies of scale for billing and
    customer service.[^206] Sprint PCS affiliates now provide service to
    more than 2.5 million subscribers.[^207]

#### Market Performance

57. Using the various information sources described in the introduction
    -- the publicly-available sources used in several previous reports,
    the NRUF database, as well as the data and statements provided at
    the Public Forum and in the *NOI* comments -- we have been able to
    examine in this report several structural and performance measures
    of competition in the CMRS industry. Some of the key metrics
    reported by mobile telephone operators, such as subscriber growth,
    average monthly usage per subscriber, and average revenue per
    subscriber, while not individually indicative of competition *per
    se*, demonstrate the increased demand for and reliance placed on
    mobile telephony services over the past year. Moreover, it is the
    totality of the circumstances -- including prices, the number of
    competitors, investment levels, and churn rates, as well as the
    other metrics listed above -- that shows the extent of competition
    in the growing CMRS industry. Continued downward price trends, the
    continued expansion of mobile networks into new and existing
    markets, high rates of investment, and churn rates of about 30
    percent, when considered together with the other metrics,
    demonstrate a high level of competition for mobile telephone
    consumers. We examine these different metrics because each one
    highlights a different aspect of the industry, and collectively
    provide a fuller picture of the state of competition.

##### Subscriber Growth

58. In the *Seventh Report*, in an effort to improve the accuracy of its
    estimate of U.S. mobile telephone subscribership, the Commission
    began analyzing information filed directly with the FCC. This
    information, the NRUF data,[^208] tracks phone number usage
    information for the United States.[^209] All mobile wireless
    carriers must report to the FCC which of their phone numbers have
    been assigned to end-users, thereby permitting the Commission to
    make more accurate estimates regarding subscribership.[^210] In
    previous years, for purposes of this report, the Commission had
    relied on national subscribership data from a highly-respected
    survey conducted by CTIA. [^211] While the Commission, for purposes
    of this report, now uses NRUF data as the basis for its estimate of
    mobile telephone subscribership, we continue to report the CTIA data
    as well for comparison.[^212]

59. As of December 2002, we estimate that there were 141.8 million
    mobile telephone subscribers,[^213] which translates into a
    nationwide penetration rate of roughly 49 percent.[^214] While this
    increase of 13.3 million subscribers[^215] from the estimate of
    128.5 million in 2001 is significant, it is only a 10 percent
    increase from the previous year and continues the leveling off of
    wireless growth the Commission noted in the *Seventh Report*.[^216]

60. CTIA's estimate for year-end 2002 was 140.8 million subscribers, a
    10 percent increase over its estimate of 128.4 million subscribers
    as of year-end 2001.[^217] CTIA's absolute increase of 12.4 million
    subscribers represents the smallest 12-month increase in
    subscribership in the last five years, and the 10 percent increase
    was the smallest growth rate in subscribership since the survey
    began.[^218] The large absolute number of new subscribers indicates
    the continued demand for mobile wireless service. Analysts believe
    that one reason for the slowdown in subscriber additions may be the
    industry's current focus on profitability rather than expansion of
    its subscriber base or revenue growth.[^219]

61. Digital subscribers made up approximately 88 percent of all wireless
    subscribers at the end of 2002, up from 80 percent at the end of
    2001.[^220] During 2002, the number of customers subscribing to
    digital services climbed 21 percent, from approximately 102 million
    to 125 million.[^221] Approximately 17 million mobile telephony
    subscribers are analog only, a drop of 34 percent from 2001.[^222]

##### Regional Penetration Rates

62. NRUF data is collected on a small area basis and thus allows the
    Commission to compare the spread of mobile telephone subscribership
    across different areas within the United States.[^223] EAs, which
    are defined by the Department of Commerce's Bureau of Economic
    Analysis, are particularly well-suited for comparing regional mobile
    telephony penetration rates for two reasons.[^224] First, the
    defining aspect of mobile telephony is, of course, mobility. Each EA
    is made up of one or more economic nodes and the surrounding areas
    that are economically related to the node. The main factor used in
    determining the economic relationship between the two areas is
    commuting patterns, so that each EA includes, as far as possible,
    the place of work and the place of residence of its labor
    force.[^225] Thus, an EA would seem to capture the market where the
    average person would use his or her mobile phone most of the time --
    around work, around home, and all of the places in between. Second,
    wireless carriers have considerable discretion in how they assign
    telephone numbers across the rate centers in their operating
    areas.[^226] In other words, a mobile telephone subscriber can be
    assigned a phone number associated with a rate center that is a
    significant distance away from the subscriber's place of residence
    (but generally still in the same EA).[^227]

63. Regional penetration rates for the 172 EAs covering the 50 United
    States, sorted by EA population density, can be seen in Appendix D,
    Table 3.[^228] The rates range from a high of 62 percent in the
    Atlanta, GA-AL-NC (EA 40) and the Fort Myers-Cape Coral, FL (EA 32)
    EAs, to a low of 11 percent in the Northern Michigan, MI EA (EA 58).
    Forty EAs, with a combined population of over 170 million, have
    penetration rates of over 50 percent. The Anchorage, AK EA (EA 171),
    with the lowest population density, had a penetration rate of 46
    percent, while the Tampa-St. Petersburg-Clearwater, FL EA (EA 34),
    with the highest density, had a penetration rate of 56 percent. As
    previously stated based on an analysis of NRUF data, the national
    penetration rate is 49 percent.

##### Minutes-of-Use

64. Wireless subscribers continue to increase the amount of time they
    communicate using their wireless phones. Average minutes-of-use per
    subscriber per month ("MOUs") continued a rapid rise in 2002, to 492
    minutes, or more than 8 hours for the average subscriber of a
    nationwide operator in the last quarter of the year.[^229]
    Increasing MOUs most likely are a result of the decreasing prices
    and the wider acceptance of and reliance upon wireless
    service.[^230]

65. According to CTIA, MOUs averaged 427 between June and December 2002,
    an increase of 12 percent from 380 average MOUs during the same
    period in 2001, and an increase of 67 percent from an average of 255
    MOUs from the same period in 2000.[^231] Other analysts also report
    higher MOUs in 2002. Paul Kagan and Associates estimated MOUs of 509
    in mid-2002, an increase of 21 percent from 422 in mid-2001.[^232]
    J.D. Power and Associates estimated 541 MOUs, an increase of 28
    percent from 422 a year earlier.[^233]

66. Operators with all-digital networks tended to have the highest MOUs,
    while regional operators, Verizon Wireless, and Cingular, which
    provide service to relatively large numbers of analog subscribers,
    had relatively lower levels.[^234] One analyst claims that this
    trend is due to averaging of much lower-usage analog subscribers in
    the latters' subscriber bases.[^235]

##### Average Revenue Per Unit

67. One financial metric widely used in analyzing the mobile telephone
    sector is average monthly revenue per subscriber (often referred to
    as average revenue per unit, or "ARPU"). CTIA's estimate of ARPU
    decreased almost continuously between December 1988 and December
    1998, when it reached a low of \$39.43.[^236] However, since 1999,
    ARPU has been increasing, rising to \$48.40 in December 2002, a 23
    percent increase during the last four years, but only a rise of 2
    percent from \$47.37 in December 2001. This trend is evident even
    though per-minute prices declined throughout this period.[^237] The
    recent ARPU increases might be due to a variety of factors,
    including increased usage offsetting per-minute price declines, as
    well as the adoption by wireless consumers of higher-priced calling
    plans.[^238]

##### Churn

68. Churn refers to the number of customers an operator loses over a
    given period of time. Mobile telephone operators usually express
    churn in terms of an average percent churn per month. For example,
    an operator might report an average monthly churn of 2 percent in a
    given fiscal quarter. In other words, on average, the operator lost
    2 percent of its customers in each of the quarter's three months. At
    this rate, the operator would lose approximately 24 percent of its
    customers in a single year.[^239] Most carriers report churn rates
    between 1.5 percent and 3 percent per month.[^240] At current rates,
    more than 30 percent of subscribers change service providers each
    year.[^241] Average monthly churn rates for mobile telephone service
    have remained fairly constant over the past three years.[^242]

69. Consistent with findings in previous reports, customers indicated
    cost and network quality as the main reasons for changing
    providers.[^243] A survey conducted in 2002 by the Yankee Group
    research firm found that 26 percent of wireless subscribers claimed
    pricing played the largest role in whether they would switch
    carriers, while 20 percent felt improved coverage was the most
    important issue.[^244] Phone upgrade programs came in third with 14
    percent, and loyalty programs came in fourth with 13 percent of
    survey respondents.[^245] One Yankee Group analyst claimed that it
    only took a 10 to 15 percent price difference to lure wireless
    subscribers to another carrier.[^246]

##### Capital Expenditures

70. Capital expenditures, alternatively called "capital spending" or
    abbreviated to "capex," is the amount of money spent during a
    particular period to acquire or improve long-term assets such as
    property, plant, or equipment.[^247] In the mobile telephone
    industry, capex consists primarily of spending to expand and improve
    the geographic coverage of networks, increase the capacity of
    existing networks so they can serve more customers, and improve the
    capabilities of networks (by allowing higher data transmission
    speeds, for example).[^248] One analyst estimated that the wireless
    industry spent roughly \$25 billion on capex in 2002, a decline of 7
    percent from the \$27 billion spent in 2001, but still 14 percent
    more than the \$22.3 billion spent in 2000, and almost twice as
    much, \$10 billion more, than was spent in 1999.[^249] In fact, in
    2002, carriers spent more on capex than in any other year with the
    exception of 2001.[^250] As one analyst noted, "carriers are still
    investing heavily in their networks."[^251] The analyst attributed
    the recent slowdown in capex spending to smaller subscriber growth,
    near completion of network expansions and upgrades, and lower
    network equipment prices.[^252] Another analyst attributed the
    carriers' recent focus on profitability as contributing to the
    decline in capital spending.[^253]

##### Technology Deployment

71. Of the six nationwide mobile telephone operators, Cingular,
    T-Mobile, and AT&T Wireless use TDMA/GSM as their 2G digital
    technology, Sprint PCS and Verizon Wireless use CDMA, and Nextel
    uses iDEN.[^254]

72. U.S. mobile carriers have continued to deploy next generation
    network technologies over the past year.[^255] At the writing of the
    *Seventh Report*, T-Mobile had deployed GPRS across its entire
    network, AT&T Wireless and Cingular had deployed GPRS in portions of
    their respective networks, and Verizon Wireless had built out 1xRTT
    across portions of its network.[^256] During the past year, AT&T
    Wireless, Cingular, and Verizon Wireless have expanded their
    next-generation network deployments into additional markets.
    Furthermore, Sprint PCS, Monet Mobile Networks ("Monet
    Mobile"),[^257] Western Wireless, US Cellular, and Dobson initiated
    service over upgraded next-generation networks during 2002.[^258]

73. During 2002, AT&T Wireless expanded its GSM/GPRS network from 16
    cities covering 73 million POPs, or 26 percent of the U.S.
    population, to areas covering 181 million POPs, or 63 percent of the
    U.S. population.[^259] AT&T Wireless expects to expand its GSM/GPRS
    network to areas covering 74 percent of the U.S. population by the
    end of 2003.[^260] The company has also been installing EDGE
    equipment and expects to launch service using EDGE technology across
    its entire GSM/GPRS footprint by the end of 2003.[^261] Furthermore,
    AT&T Wireless announced in December 2002 that it plans to launch
    WCDMA in four U.S. markets -- San Francisco, San Diego, Seattle, and
    Dallas -- covering approximately 8 million POPs by the end of
    2004.[^262]

74. During 2002, Cingular Wireless expanded its GSM/GPRS coverage to
    portions of California, Connecticut, New York, and New Jersey, and,
    as of the end of 2002, its GSM/GPRS network was available to 50
    percent of the company's covered POPs.[^263] The company plans to
    deploy GSM/GPRS to 90 percent of its POPs during 2003 and to the
    remaining 10 percent during 2004.[^264] Cingular expects to launch
    service over EDGE networks in selected markets during the third
    quarter of 2003 and to continue deploying EDGE during 2004.[^265]

75. At the writing of the *Seventh Report*, Verizon Wireless had
    upgraded approximately 20 percent of its network coverage area to
    1xRTT[^266] but has since completed 1xRTT upgrades in a total of 900
    towns and cities.[^267] Verizon Wireless also announced in March
    2003 that it expects to launch service over 1xEV-DO networks in
    Washington, D.C. and San Diego during the third quarter of
    2003.[^268]

76. In August 2002, Sprint PCS began offering service using 1xRTT
    technology, which the carrier deployed across its entire network
    footprint.[^269] Sprint PCS reportedly does not expect to build out
    1xEV-DO technology but instead plans to wait until 1xEV-DV is
    available for commercial deployment, possibly in 2005.[^270] On the
    other hand, one of Sprint PCS's affiliates, UbiquiTel, is running a
    trial of 1xEV-DO in Boise, ID and is expected to offer service over
    the network commercially in the future.[^271]

77. Western Wireless, which has used TDMA as its 2G technology, chose to
    upgrade its network to 1xRTT, and has launched service using 1xRTT
    technology in Terry, MT[^272] and is running trials of 1xRTT service
    in Billings, MT and Midland, TX.[^273] In the fourth quarter of
    2002, US Cellular upgraded its Chicago-area network to CDMA
    1xRTT.[^274] Dobson is in the process of overlaying its TDMA network
    and that of its 50 percent owned subsidiary, American Cellular, with
    GSM/GPRS technology.[^275] During the first quarter of 2003,
    American Cellular began offering GSM/GPRS roaming service to
    Cingular customers over its New York network, and Dobson expects to
    begin offering GSM/GPRS service on a roaming basis and for its own
    subscribers in select markets by the end of 2003.[^276] Dobson
    expects to complete these upgrades across its entire network during
    2004.[^277]

##### Coverage by Technology Type

78. To date, 278 million people, or 97 percent of the total U.S.
    population, live in counties where operators offer digital mobile
    telephone service, using CDMA, TDMA/GSM, or iDEN (including their
    respective next generation technologies), or some combination of the
    three.[^278] These counties make up 71 percent of the total land
    area of the United States. To estimate the current levels of
    deployment of the three main digital mobile telephone technologies
    individually, we have prepared maps of each technology, which
    combine the network coverage of all of the relevant operators.[^279]
    We have also prepared maps showing the extent of next generation
    network technology deployment.[^280]

79. CDMA has been launched in at least some portion of counties
    containing 260 million people, or roughly 91 percent of the U.S.
    population, while TDMA/GSM has been launched in at least some
    portion of counties containing 265 million people, or almost 93
    percent of the U.S. population.[^281] To date, digital SMR operators
    have launched iDEN-based service in at least some portion of
    counties containing over 248 million people, or approximately 97
    percent of the U.S. population.[^282]

80. CDMA 1xRTT/1xEVDO has been launched in at least some portion of
    counties containing 260 million people, or roughly 91 percent of the
    U.S. population, while GPRS has been launched in at least some
    portion of counties containing 227 million people, or almost 80
    percent of the U.S. population.[^283]

##### Market Entry

81. To track the level of competition in the mobile telephone sector,
    the Commission compiles a list of counties with some level of
    coverage by mobile telephone providers. This data is based on
    publicly-available sources of information released by the operators
    such as news releases, filings with the SEC, coverage maps available
    on operators' Internet sites, and information filed with the
    Commission in proceedings or with applications.[^284]

82. As previously discussed, there are several important caveats to note
    when considering these data. First, to be considered as "covering" a
    county, an operator need only be offering any service in a portion
    of that county. Second, multiple operators shown as covering the
    same county are not necessarily providing service to the same
    portion of that county. Consequently, some of the counties included
    in this analysis may have only a small amount of coverage from a
    particular provider. Third, the figures for POPs and land area in
    this analysis include all of the POPs and every square mile in a
    county considered to have coverage.[^285] Therefore, this analysis
    overstates the total coverage in terms of both geographic areas and
    populations covered.

83. On the other hand, this county-by-county analysis reflects a
    significant improvement in accuracy. In past editions of this
    report, the Commission provided summaries of estimated coverage by
    BTAs. Starting with the *Fifth Report*, the Commission decided to
    re-estimate and enhance these coverage maps using county boundaries
    in an attempt to provide a more precise picture of network
    deployments. Moreover, while the newer broadband PCS and digital SMR
    entrants have less complete networks, the original cellular licenses
    have extensive networks that provide almost complete coverage of the
    entire land mass of the continental United States.[^286] Cellular
    licensees were originally awarded a geographical area (CMA) as a
    license area, but they only retained that portion of the CMA where
    they had built out and expanded their wireless networks.[^287]

84. To date, 270 million people, or 95 percent of the total U.S.
    population, have three or more different operators (cellular, PCS,
    and/or digital SMR) offering mobile telephone service in the
    counties in which they live.[^288] However, these counties make up
    only 52 percent of the total land area of the United States,
    reflecting the nation's uneven population distribution.[^289] Over
    236 million people, or 83 percent of the U.S. population, live in
    counties with five or more mobile telephone operators competing to
    offer service, while 72 million people, or about 25 percent of the
    population, live in counties with seven or more mobile telephone
    operators competing to offer service. While the growth in the
    percentage of U.S. population living in counties with three or more,
    four or more, five or more, and seven or more providers has slowed,
    the percentage of the population living in counties with six or more
    providers has grown 34 percent over the last year, up from a 14
    percent growth rate between the *Sixth* and *Seventh Reports*.[^290]
    More than 200 million people, or 71 percent of the population, can
    now choose from among six or more different mobile telephone
    operators providing service somewhere in their counties.[^291]

##### Quality of Service

85. Another variable that we examine as part of our assessment of the
    level of CMRS competition is the quality of service that customers
    experience.[^292] In addition to competing on price, in a
    competitive market, firms also compete on the basis of service
    quality. Evidence from the CMRS marketplace shows that carriers
    compete in terms of services quality.[^293] As discussed below,
    market forces have also created an incentive for numerous third
    parties to provide information to consumers seeking information on
    the quality of individual carriers' services.

86. Sections C.(vii), Technology Deployment and C.(ix), Market Entry,
    *supra*, as well as similar sections in previous reports, discuss
    upgrades that carriers have made to their networks that have
    improved service quality.[^294] For instance, carriers' aggressive
    rollout of digital technology has enabled better voice quality and
    additional calling features for consumers, as well as higher
    capacity for operators, thereby allowing more customers to access
    the network and use their phones at the same time.[^295] Industry
    analysts emphasize that carriers are still working to upgrade their
    networks and that their future capital expenditures will be "largely
    related to capacity increases and network quality
    improvements."[^296] Another analyst stated that "carriers are still
    spending heavily in improving the quality of their networks."[^297]
    In a report released in April 2003, the General Accounting Office
    ("GAO") reported that many mobile telephone carriers strive for a 98
    percent call-completion rate, meaning dialed calls would go through
    and not be dropped before they were completed at least 98 percent of
    the time on average.[^298]

87. In addition to the digital and next generation network upgrades that
    carriers are making in order to improve call quality and network
    capacity, some carriers have focused their marketing campaigns on
    distinguishing their products on the basis of quality, instead of on
    other factors such as price or the availability of advanced
    features. Verizon Wireless's "Can You Hear Me Now?" advertising
    campaign, for example, has attempted to emphasize the carrier's
    network availability and reliability. Analysts indicate that these
    types of efforts have been beneficial for carriers, as those who
    have emphasized service quality have at times been more successful
    in gaining subscribers than those with a negative quality
    perception. For example, one analyst reported that Verizon Wireless
    "has been able to post strong subscriber figures largely as a result
    of the popularity of its America's Choice pricing plans ... and its
    'Can You Hear Me Now?' advertising campaign, which highlighted the
    quality of the company's national network."[^299] Another analyst
    stated in February 2003 that it believed the company would "continue
    to invest in its network so as to continue to leverage customer
    perception of a quality and coverage advantage."[^300] This analyst
    also forecast that T-Mobile would see successful sales during the
    2002 holiday season due to a variety of factors, including "improved
    network quality in selected markets."[^301] On the other hand,
    analysts have noted that a negative impression of a carrier's
    service quality can be detrimental to its market share.[^302]

88. In addition to the information presented above on carriers' network
    upgrades and quality-focused marketing efforts, other data suggests
    that most consumers are content with the level of mobile telephone
    service quality that they currently receive. Based on a survey it
    conducted in November 2002, GAO estimated that "about 83 percent of
    mobile telephone consumers were satisfied with their call
    quality."[^303] GAO also estimated that "about 47 percent of adult
    mobile phone users believed their call quality was improving, while
    about 5 percent believed that their call quality was getting
    worse."[^304] GAO also reported that "\[d\]espite the many mobile
    phone customers who appeared to be satisfied with their overall call
    quality, a number of survey respondents reported that they were
    experiencing specific problems."[^305] For example, "about one-third
    of customers could not complete 10 percent or more of their calls
    because they were in a cell where the carrier did not provide
    service."[^306] About 12 percent reported that such a problem
    occurred at least one-third of the time.[^307] In addition, just
    over 20 percent of respondents reported problems "getting a call
    through because \[of a\] fast busy signal or a message that says the
    call failed" or problems "with a call being cut off or dropped" at
    least 10 percent of the time.[^308] When examining consumer
    opinions, it is important to keep in mind that consumer perceptions
    of service quality can change independently of actual changes in
    network performance, as consumers' expectations evolve.

89. It is also apparent that wireless consumers are demanding more
    information about mobile carriers' individual service quality
    levels, and that numerous third parties have been responding to this
    demand by compiling and reporting such information.[^309] There are
    considerable sources of information available to consumers,
    including publications such as *Consumer Reports*, trade
    associations, marketing and consulting firms, and several web sites
    dedicated to giving consumers an overview and comparison of the
    mobile telephone services available in their area.[^310]

#### Pricing Data and Trends

90. As for the last few years, equity analysts and other industry
    observers continue to describe wireless price competition in the
    United States as "intense," "fierce," and "ultra-competitive."[^311]
    While it is difficult to identify sources of information that track
    mobile telephone prices in a comprehensive manner,[^312] these
    claims are supported by a number of reports and other available data
    indicating that the cost of mobile telephony service continues to
    fall. One journalist opined in October 2002 that "there has never
    been a cheaper time to sign up for cellphone service."[^313]

91. According to one economic research and consulting firm, Econ One,
    mobile telephone prices in the 25 largest U.S. cities declined
    roughly 2.9 percent in 2002.[^314] The average cost of monthly
    service[^315] -- which was calculated across four typical usage
    plans (50, 200, 500 and 800 minutes) -- dropped from \$36.77 in
    December 2001 to \$35.70 in December 2002.[^316] Costs dropped the
    most in Tampa (-7.0 percent), Chicago (-6.0 percent), St. Louis
    (-5.4 percent), Detroit (-4.6 percent) and Pittsburgh (-4.4
    percent), while prices increased 1.6 percent in Portland and 0.6
    percent in Denver.[^317] As mentioned in the *Seventh Report*, Econ
    One compared usage plans of 30, 150, 300, and 600 minutes during
    2001 and found the greatest price decline was for 600 minutes of
    airtime; furthermore, usage levels of 150 and 300 minutes saw more
    modest reductions, while the monthly cost of 30 minutes of airtime
    increased 5.9 percent.[^318]

92. Another source of price information is the cellular telephone
    services component of the Consumer Price Index ("Cellular CPI")
    produced by the United States Department of Labor's Bureau of Labor
    Statistics ("BLS").[^319] Cellular CPI data is published on a
    national basis only.[^320] From 2001 to 2002, the annual Cellular
    CPI decreased by 1.0 percent while the overall CPI increased by 1.6
    percent. The Cellular CPI has declined almost 33 percent since 1997
    when BLS began tracking it.

93. As a third pricing indicator, some analysts believe average revenue
    per minute ("RPM") is a good proxy for mobile pricing.[^321] This is
    calculated by dividing a carrier's estimate of ARPU by its estimate
    of MOUs, yielding the revenue per minute that the carrier is
    receiving.[^322] Using its estimates of industry-wide ARPU and MOUs,
    CTIA's survey indicates that RPM fell 9 percent between December
    2001 and December 2002. Since 1994, RPM has fallen from \$0.47 in
    December 1994 to \$0.11 in December 2002, a decline of 76
    percent.[^323]

##### Developments in Pricing Plans

94. The continued rollout of differentiated pricing plans also indicates
    a competitive marketplace. In the mobile telephone sector, we
    observe independent pricing behavior, in the form of continued
    experimentation with varying pricing levels and structures, for
    varying service packages, with various available handsets and
    policies on handset pricing. AT&T Wireless's Digital One Rate
    ("DOR") plan, introduced in May 1998, is one notable example of an
    independent pricing action that altered the market and benefited
    consumers.[^324] Today all of the nationwide operators offer some
    version of DOR pricing plan which customers can purchase a bucket of
    MOUs to use on a nationwide or nearly nationwide network without
    incurring roaming or long distance charges.

95. Another trend in mobile telephone pricing has been the introduction
    of on-network, or "on-net," national pricing plans. These plans are
    similar to DOR plans, with the exception that subscribers incur
    roaming charges when they use their phones off the carrier's network
    ("off-net"). Such plans are usually cheaper, or include more
    minutes, than the initial type of DOR plans.[^325] The advantage of
    the on-net plan to the carrier, of course, is that it allows a
    carrier to recover the cost of its subscribers roaming onto other
    carriers' networks, an expense which the carrier would otherwise
    bear with a DOR pricing plan.[^326] Sprint PCS, which permits
    off-net roaming, has allowed free on-net national roaming with its
    pricing plans for many years. In January 2002, Verizon Wireless
    began to offer its own on-net national plans, under the name
    "America's Choice."[^327] Verizon Wireless was soon followed by AT&T
    Wireless's "National Network" plans in April,[^328] and then
    Cingular's "Preferred Nation" plans in September.[^329] We believe
    that such pricing plans, broadly similar across operators, are the
    results of competitive market forces and competitive conduct.

##### Roaming

96. All mobile calling plans specify a calling area -- such as a
    particular metropolitan area, a state, a region, the carrier's
    entire network, or the entire United States -- within which the
    subscriber can make a call without incurring additional charges.
    When a subscriber exits this area, or "roams," he or she incurs
    additional charges for each minute of use. Sometimes these roaming
    charges go directly to the subscriber's carrier, and sometimes the
    charges are used to pay a carrier other than the subscriber's, on
    whose network the subscriber was roaming.[^330] This source of
    revenue is particularly important to many rural and smaller
    carriers.[^331]

97. CTIA reported that roaming revenues for the mobile telephony
    industry were virtually unchanged over the past year, from \$3.94
    billion in 2001 to \$3.90 billion in 2002.[^332] Roaming revenues as
    a percentage of total service revenue continued to decline, however,
    from 6.1 percent reported in 2001 to 5.1 percent in 2002.[^333] CTIA
    attributes this decline to the growth of DOR plans and the extended
    calling areas established by many of the larger carriers.[^334] It
    may also be the result of declining per-minute roaming rates.[^335]

##### Prepaid Service

98. In the United States, most mobile telephony subscribers pay their
    phone bills after they have incurred charges (known as postpaid
    service). Prepaid service, in contrast, requires customers to pay
    for a fixed amount of minutes prior to making calls. Although
    prepaid plans are considered a good way to increase penetration
    rates,[^336] they typically produce lower ARPUs and higher churn
    rates in comparison to postpaid subscribers.[^337] One provider of
    "prepaid platform services" states that prepaid subscribers use an
    average of 97 minutes a month, compared to almost 500 for the
    average subscriber of a nationwide carrier.[^338]

99. Analysts estimate that 5 to 7 percent of U.S. wireless phone users
    subscribed to prepaid plans in 2002, a slight drop from what the
    Commission found in the *Seventh Report*.[^339] At the end of 2002,
    Verizon Wireless's subscriber base was approximately 6 percent
    prepaid, AT&T Wireless's was 6.5 percent, and Cingular Wireless's
    was 6 percent. T-Mobile had the highest percentage of prepaid
    subscribers of the major carriers, 14 percent, but that was half its
    rate from a year earlier.[^340]

100. In addition to or in place of traditional prepaid offerings, a
     number of carriers have introduced prepaid plans that maintain
     financial ties to the prepaid customer to help reduce churn,
     including Sprint PCS's ClearPay,[^341] T-Mobile's SmartAccess, and
     AT&T's GoPhone programs.[^342] Moreover, Sprint PCS and Nextel have
     partnered with third-party resellers to market prepaid offerings
     aimed at the youth portion of the population.[^343]

#### Wireless/Wireline Competition

101. Once solely a business tool, wireless phones are now a mass-market
     consumer device.[^344] The overall wireless penetration rate
     (defined as the number of wireless subscribers divided by the total
     U.S. population) in the United States is now at 49 percent.[^345]
     Industry survey firm Telephia estimated that 53 percent of the
     total population in 44 major metropolitan areas subscribed to
     wireless service at the end of 2002, with some areas much higher,
     including Greenville, SC (71 percent), St. Louis (69 percent),
     Raleigh, NC (65 percent), Orlando (65 percent), Atlanta (64
     percent), Washington DC (64 percent) and Boston (63 percent).[^346]
     In addition, one study found that 56 percent of households in the
     27 largest U.S. markets use wireless phone service.[^347] Merrill
     Lynch estimated that, as of June 2002, more than 55 percent of
     Americans between the ages of 15 and 59 had wireless phones,
     including 71 percent between the ages of 20 and 34, 69 percent
     between 35 and 39, 68 percent between 40 and 44, and 65 percent
     between 45 and 49.[^348]

##### Wireless Substitution

102. While specific data is largely unavailable, it appears that only a
     small percent of wireless customers use their wireless phones as
     their only phone, and that relatively few wireless customers have
     "cut the cord" in the sense of canceling their subscription to
     wireline telephone service.[^349] There is much evidence, however,
     that consumers are substituting wireless service for traditional
     wireline communications. At a recent Congressional hearing on the
     health of the telecommunications industry, for example, Blake Bath,
     managing director of Lehman Brothers, pointed out that while in
     1996 wireless made up 5 percent of the sector's revenues, it now
     accounts for 30 percent.[^350] Robert Crandall of the Brookings
     Institute, also speaking at the hearing, claimed that wireless "has
     siphoned enormous amounts of traffic from the wireline
     network."[^351] One analyst estimates that wireless has now
     displaced about 30 percent of total wireline minutes.[^352] For the
     average household, wireless represents 27 percent of total
     telecommunications expenditures.[^353]

103. The long distance, local, and the payphone segments of wireline
     telecommunications have all been losing business to wireless
     substitution. Long distance volumes and revenues are down at AT&T,
     MCI, and Sprint as customers shift to wireless services to make
     their calls.[^354] Verizon, SBC, and BellSouth saw business and
     consumer access lines fall 3.6, 4.1, and 3.2 percent, respectively,
     in 2002, for a total decrease of 5.5 million lines, with wireless
     substitution being a significant factor.[^355] Similarly, the
     number of payphones has declined from 2.7 million in the mid-1990s
     to about 1.9 million today, in large part due to wireless
     phones.[^356] Even the prepaid calling card business is suffering,
     as consumers are now "utilizing their wireless phones for the same
     reasons they once used prepaid phone cards."[^357]

104. Certainly, this is due to the declining cost and widespread use of
     wireless service. In fact, a number of analysts argue that wireless
     service is cheaper than wireline. According to Blake Bath,
     "\[w\]ireless pricing is currently below that of wireline."[^358]
     Merrill Lynch claims that, for many wireless customers making a
     long distance call in the evening "using a wireless phone would
     actually be cheaper than using the fixed line phone in most
     cases."[^359] UBS Warburg agrees:

> Why use a pay phone, a calling card, or a hotel phone when prices are
> generally higher on a per-minute basis relative to wireless? Also,
> given that a large number of night and weekend minutes are now
> regularly included in wireless pricing schemes . . ., it is often
> cheaper to use your wireless phone while in your home.[^360]

##### Wireless Alternatives

105. An increasing number of mobile wireless carriers offer service
     plans designed to compete directly with wireline local telephone
     service. The largest of such providers, Leap, under its "Cricket"
     brand, offers mobile telephone service in 40 markets in 20
     states.[^361] At the end of the third quarter of 2002, Leap had
     roughly 1.5 million customers.[^362] Leap's service allows
     subscribers to make unlimited local calls and receive calls from
     anywhere for about \$30 per month.[^363] Leap claims that 26
     percent of its customers do not have a wireline phone at
     home.[^364] As discussed above, Leap states that its bankruptcy
     filing will not interrupt its operations or result in employee
     layoffs.[^365]

106. Other companies offering unlimited local calling plans include:
     Triton PCS in Virginia, North Carolina, South Carolina, Georgia,
     and Tennessee (with more than 200,000 subscribers to its unlimited
     calling plan);[^366] Qwest in Arizona, Colorado, Idaho, Minnesota,
     Montana, Nebraska, New Mexico, Utah, and Wyoming;[^367] ALLTEL in
     Arizona, New Mexico, North Carolina, Nebraska, and Arkansas;[^368]
     MetroPCS in California, Florida, and Georgia;[^369] Northcoast PCS
     in Ohio;[^370] First Cellular of Southern Illinois in
     Illinois;[^371] Kiwi PCS in North Carolina;[^372] Rural Cellular in
     Vermont, New Hampshire, New York, Kansas, Minnesota, Maine, North
     Dakota, and South Dakota;[^373] and Ntelos in Virginia.[^374] In
     addition, for around \$40-\$60 per month, many carriers offer
     regional or national calling plans with 500 or more "anytime"
     minutes and over 3000 night and weekend minutes.[^375]

#### Geographical Comparisons: Urban vs. Rural

107. Since the release of the *Sixth Report*, the Commission has
     attempted to obtain a better understanding of the state of
     competition below the national level, in particular in rural areas.
     The primary difficulty for the Commission in this task is the lack
     of data specific to rural markets. At its Public Forum held in
     February 2002, the Wireless Telecommunications Bureau asked
     participants to address this issue.[^376] The Commission continued
     this inquiry in its *NOI*, where the Commission invited comments on
     a range of rural issues. In our analysis below, we have attempted
     to incorporate commenters' suggestions.

##### Definition of Rural

108. As the Department of Education stated in 1994, "few issues bedevil
     analysts and planners . . . more than the question of what actually
     constitutes 'rural.'"[^377] The difficulties that this question
     brings are evidenced by the fact that within the federal
     government, the term rural has been defined in many different ways.
     The variety of definitions reflects the numerous purposes for which
     the definitions are used throughout the federal government.[^378]

109. The Commission does not have a statutory definition of what
     constitutes a rural area. The Commission has used RSAs as a proxy
     for rural areas for certain purposes, such as the current cellular
     cross-interest rule and the former CMRS spectrum cap, stating that
     "other market designations used by the Commission for CMRS, such as
     \[EAs\], combine urbanized and rural areas, while MSAs and RSAs are
     defined expressly to distinguish between rural and urban
     areas."[^379] In its *NOI*, the Commission asked the public to
     comment on how it should define rural for purposes of this
     report.[^380]

110. A number of commenters advocated the continued use of population
     density to define rural. Fred Williamson and Associates ("FWA"),
     representing a consortium of small wireline telcos in Oklahoma and
     Kansas, stated that "\[p\]opulation density is usually utilized to
     define ruralness."[^381] The South Dakota Telecommunications
     Association ("SDTA") agreed that population density is the best way
     to define ruralness, but advocated 25 persons per square mile as
     the proper breakpoint, rather than the 100 persons per square mile
     the Commission used in the *Seventh Report*.[^382] The Rural
     Telecommunications Group ("RTG") said that the Commission should
     continue to use population density as its "predominant factor,"
     although it supported the Commission's current use of a range of
     measures.[^383] Moreover, RTG said that it was "premature" for the
     Commission to develop a comprehensive definition of rural due to
     the lack of sub-national data.[^384] NTCA advocated the use of
     RSAs, for "consistency and practicality."[^385] As in the Public
     Forum, some *NOI* commenters questioned whether the urban/rural
     distinction is currently meaningful in the context of mobile
     telephony.[^386]

##### Rural Rollout

111. In consideration of commenters' suggestions and given our existing
     data, we continue to believe that our analysis of market entry data
     using a variety of criteria -- EA nodal versus EA non-nodal
     counties,[^387] CMAs, and population density -- is, at the moment,
     the best way to gain some insight into the competitive differences
     within the different geographic areas of the United States.[^388]
     However, we also continue to explore additional methods for
     analyzing rural rollout. For example, in this report we have
     examined an alternative population density breakpoint for the rural
     versus urban split at the suggestion of commenters.

*EA Nodal vs. Non-Nodal Counties*

112. Each EA consists of one or more counties that are "Economic Nodes"
     and the surrounding counties that are economically related to
     it.[^389] An EA may have more than one economic node. The counties
     that are economic nodes are metropolitan areas or similar areas
     that serve as the EA's center(s) of economic activity.[^390] As a
     proxy for urban and rural geographic areas, we have looked at
     counties that make up economic nodes, i.e. nodal counties, versus
     those counties that do not make up economic nodes, i.e. non-nodal
     counties. In comparing those two sets of counties, we find the
     non-nodal counties have an average of 3.2 mobile competitors, while
     the nodal counties have an average of 5.7 competitors.

*MSAs vs. RSAs*

113. In comparing competitive entry in counties that make up RSAs
     compared to counties that make up MSAs, we find that RSA counties
     have an average of 3.3 mobile competitors, while MSAs have an
     average of 5.7 competitors.

*Population Density*

114. In comparing competitive entry in counties with population
     densities of 100 persons per square mile or less to those with
     densities greater than 100, we find that the less densely populated
     counties have an average of 3.3 mobile competitors, while the more
     densely populated counties have an average of 5.6 competitors.

115. If, as one commenter suggested, we use 25 persons per square mile
     as the breakpoint, we find that the less densely populated counties
     have an average of 2.7 mobile competitors, while the more densely
     populated counties have an average of 4.5 competitors. However, we
     note that only 14 million people live in counties with 25 persons
     per square mile or less, while 61 million people live in counties
     with 100 persons per square mile or less.[^391] The 2000 Census
     found that 59 million persons were "rural."[^392] Thus, counties
     with population densities of 25 persons per square mile appear to
     contain only a small subset of the rural population.

116. Consistent with the Commission's findings in the *Seventh Report*,
     these three exercises of defining urban versus rural (EA Nodal vs.
     Non-Nodal Counties / MSAs vs. RSAs / Population Density) continue
     to provide remarkably similar estimates of the average number of
     competitors in urban versus rural markets.[^393] On average, rural
     markets have slightly more than three providers, while urban
     markets have between five and six providers. Even using a narrow
     definition of rural markets, we find that customers have access to
     between 2 and 3 competitors.

117. Some participants and commenters have argued that the total number
     of carriers serving an area is not the best measure of the level of
     competition in that area because only one or two carriers may be
     economically sustainable in that area.[^394] For example, RTG
     stated, "the Commission must ... seriously consider the possibility
     that there may be areas that are so remote and the cost to provide
     coverage so high that only one service provider may be economically
     viable."[^395]

118. Furthermore, FWA claimed that "there is sufficient competition
     among wireless providers in ILEC service areas."[^396] Dobson said
     that "\[r\]ural CMRS carriers face significant competitive
     pressures,"[^397] and argued that the best measure of competition
     is not the number of competitors in a market, but rather the
     pressure carriers feel to offer services and products at
     competitive prices to customers.[^398] NTCA said that "many rural
     customers have access to the same state-of-the-art wireless
     technologies available to their urban counterparts." The most
     recently released data provided by Econ One, which was also
     included in the *Seventh Report*, showed that the average price of
     mobile telephone service in rural areas appears to be very similar
     to the average price in urban areas.[^399] Indeed, at least one
     *NOI* commenter noted that nationwide and urban price trends have
     acted to constrain prices in rural areas, even where the total
     number of operators may be lower.[^400]

119. Moreover, some commenters claim that rural areas are experiencing a
     significant level of wireless substitution for wireline service. In
     a survey of its wireless subscribers within its RSAs, Western
     Wireless found that 23 percent of respondents considered their
     wireless phone to be their primary phone.[^401] FWA reports that
     the telcos it represents are experiencing access line declines, in
     part due to customers utilizing wireless service as the primary
     residential service.[^402] FWA also reports that the toll revenues
     of its clients are declining, in some cases as much as 30 percent,
     due to customers' use of wireless instead of wireline toll
     services.[^403]

*Conclusion*

120. Based on our rollout analysis and information provided by
     commenters and participants at the Public Forum, we conclude that
     CMRS providers are competing effectively in rural areas. While it
     appears that, on average, a smaller number of operators are serving
     rural areas than urban areas, this difference does not necessarily
     indicate that effective CMRS competition does not exist in rural
     areas. On the contrary, data and statements presented by Public
     Forum participants and *NOI* commenters provide evidence that,
     despite the differing structure of rural markets, effective CMRS
     competition does exist in rural areas.[^404]

121. We note, however, that in 2001, the Commission retained the
     cellular cross-interest rule in RSAs to ensure that mergers and
     acquisitions do not diminish competition, concluding that "it
     appears that a combination of interests in cellular licensees in
     rural areas would more likely result in a significant reduction in
     competition."[^405] Nevertheless, the Commission recognized that
     there may be RSAs in which such cross interests would not create a
     significant likelihood of substantial competitive harm, and created
     a waiver process.[^406]

### Resellers

122. Resellers offer service to consumers by purchasing airtime at
     wholesale rates from facilities-based providers and reselling it at
     retail prices.[^407] According to information provided to the FCC
     in its ongoing local competition and broadband data gathering
     program, the resale sector accounts for approximately 5 percent of
     all mobile telephone subscribers.[^408] With the exception of
     Tracfone Wireless Inc., which serves more than 2 million customers
     with prepaid offerings,[^409] there appear to be few large
     resellers of wireless service.[^410] As reported in the *Seventh
     Report*, WorldCom, which at one time claimed to be the largest
     reseller of postpaid wireless services in the United States with
     nearly 2 million customers,[^411] exited the resale business in
     2002.[^412]

123. Two nationwide operators have partnered with third party resellers
     to market prepaid offerings aimed at the youth portion of the
     population. Virgin Mobile USA ("Virgin Mobile"), a joint venture
     between Sprint PCS and Richard Branson's Virgin Group, LLC, was
     launched in July 2002, targeting its prepaid offerings at the youth
     market.[^413] The venture has gained more than 350,000 subscribers
     through January 31, 2003.[^414] Similarly, Nextel, in conjunction
     with an Australia-based company, is offering a prepaid service
     targeted at the teenage market.[^415] The service, under the "Boost
     Mobile" brand name, is available in California and Nevada.[^416]

### Mobile Data

#### Introduction 

124. For purposes of this report, mobile data service is considered to
     be the delivery of non-voice information to a mobile device.
     Two-way mobile data services include not only the ability to
     receive non-voice information on an end-user device but to send it
     from an end-user device to another mobile or landline device using
     wireless technology. While mobile data constituted only 1.7 percent
     of mobile telephone carriers' total ARPU and revenue during 2002,
     the consumer adoption of various data products is growing.[^417]
     One analyst estimates there were 11.9 million mobile telephone
     users who subscribed to some type of mobile data service at the end
     of 2002, up from 7.6 million at the end of 2001.[^418] The
     estimated number of data-only mobile users grew from 1.1 million at
     the end 2001 to 2.3 million at the end of 2002.[^419] Another
     analyst estimates that 20 percent of all mobile telephone
     subscribers used text messaging services during the fourth quarter
     of 2002.[^420]

125. As discussed above, carriers have continued to upgrade their
     networks over the past year with next generation technologies that
     allow for faster mobile Internet access at speeds ranging from 30
     to 70 kbps.[^421] As of March 2003, 265 million people, or 93
     percent of the U.S. population lived in counties where GPRS, 1xRTT,
     and or 1xEV-DO networks had been deployed.[^422]

126. While the sections above discuss the spectrum bands, networks,
     trends, and metrics related to mobile telephone carriers,[^423]
     this section focuses solely on mobile data services. Sections II.b
     and II.c, *infra*, first provide an overview of the spectrum bands
     and networks that are used to provide data-only commercial mobile
     services.[^424] Section II.d then describes each of the individual
     non-voice CMRS services, including details on what each service
     entails, pricing information, and available data on usage,
     subscribership, and ARPU.[^425] This is followed by a discussion of
     the major types of mobile data devices and device features.[^426]
     The mobile data section concludes with an overview of Wi-Fi
     technology and deployment, and significant developments related to
     the telemetry and telematics sectors.[^427]

127. As mentioned above, in the *NOI* the Commission requested
     information from commenters on mobile data, including details on
     the nature of individual mobile data services, on mobile data
     service availability and pricing, and on Wi-Fi deployment.[^428]
     The mobile data-related information received in the comments
     consisted of information on next generation networks that various
     providers use and plan to use to offer mobile data services at
     higher data transfer speeds.[^429] While many of the other issues
     raised in the *NOI* were not directly addressed in the comments, we
     have been able to gather information on mobile data services,
     deployment, and pricing from several publicly-available sources,
     including providers' web sites and news releases, company SEC
     filings, newspaper and periodical articles, NRUF data, and reports
     by securities analysts and other research and consulting firms.
     Given the various sources we have used to examine this segment of
     the CMRS industry, we believe the multitude of mobile data
     services, service providers, pricing plans, and devices available
     to consumers provides evidence that competition for the provision
     of mobile data products is developing successfully. The numerous,
     new mobile data products also represent service innovations that
     CMRS providers are offering in order to compete with each other;
     hence, the existence of these service offerings provides further
     evidence that the CMRS industry is competitive.

#### CMRS Spectrum: Data-Only

128. Section A above discussed the spectrum that mobile telephone
     carriers use to offer both voice and data CMRS services.[^430] Two
     additional spectrum bands -- paging and narrowband PCS -- are used
     by licensees to offer CMRS services that consist only of data
     communications, yet are still interconnected.

129. Spectrum designated for commercial paging is spread across several
     non-contiguous bands: 35-36 MHz, 43-44 MHz, 152-159 MHz, 454-460
     MHz, and 929-931 MHz.[^431] Each license consists of between 20 and
     50 kilohertz[^432] and is designed for one-way communications that
     alert users and provide them the phone number of the person trying
     to reach them.[^433] The Commission first allocated paging spectrum
     in 1949 and licensed the spectrum on a site-by-site basis through
     the mid-1990s.[^434] It began auctioning additional paging licenses
     on a geographic area basis using EAs and MEAs in 2000.[^435] The
     Commission completed its third paging auction, in which 96 bidders
     purchased 2,832 of 10,202 available licenses, on May 28,
     2003.[^436]

130. Narrowband PCS spectrum is located in the 901-902 MHz, 930-931 MHz,
     and 940-941 MHz bands and allows licensees to offer a limited array
     of two-way data services such as text messaging.[^437] The
     Commission first auctioned narrowband PCS spectrum in 1994.[^438]
     Licenses consisted of between 50 and 100 kilohertz each and were
     offered on both a nationwide and regional basis.[^439] The
     Commission is scheduled to begin two auctions of additional
     narrowband PCS spectrum on September 24, 2003.[^440] The first
     auction will consist of licenses covering 48 MTAs and ranging in
     size from 50 to 200 kilohertz.[^441] The second auction will
     include six, 62.5 kilohertz regional narrowband PCS licenses that
     will be auctioned in a combinatorial bidding format.[^442]

#### CMRS Networks: Data-Only

131. In addition to the networks discussed in Section B, *supra*, which
     mobile telephone carriers use to offer both voice and data
     services, mobile carriers operate a number of other types of
     networks in order to provide data-only commercial mobile services.
     First, carriers use paging spectrum to operate networks in order to
     offer traditional one-way paging services.[^443] Some paging
     carriers also operate data networks using narrowband PCS spectrum,
     which allow them to offer two-way messaging services. Narrowband
     PCS networks use the ReFLEX technology protocol, which can transmit
     data at speeds ranging from 3.2 to 25 kbps.[^444] ReFLEX networks
     have been deployed in areas covering over 90 percent of the U.S.
     population.[^445]

132. In addition, several mobile telephone carriers, including AT&T
     Wireless and Verizon Wireless, operate Cellular Digital Packet Data
     ("CDPD") networks on top of their existing mobile telephone
     networks, which they use to provide mobile Internet access services
     at speeds of around 19.2 kbps.[^446] These carriers are in the
     process of upgrading their networks with next generation
     technologies and migrating many of their CDPD customers to these
     next generation networks.[^447]

133. One U.S. carrier, Monet Mobile, currently offers data-only service
     using its CDMA1xEV-DO network and broadband PCS spectrum. In
     October 2002, the carrier began providing mobile Internet access
     service at speeds ranging from 300 to 700 kbps in Duluth, MN.[^448]
     It has since launched the service in six additional markets: Sioux
     Falls, SD; Fargo and Grand Forks, ND; Moorhead and Cloquet, MN; and
     Eau Claire, WI.[^449]

134. Two other carriers, Cingular Wireless and Motient Corp.
     ("Motient"), operate two-way data networks using the 900 MHz SMR
     and 800 MHz SMR spectrum bands, respectively. These networks have
     provided a variety of mobile data services to personal digital
     assistants ("PDAs") and laptops at speeds ranging from 8.6 to 14.4
     kbps.[^450] Cingular Wireless's network, known as the Mobitex
     network, is available in 99 of the 100 largest U.S. metropolitan
     areas and covers 200 million people, or 90 percent of the U.S.
     metropolitan population.[^451] Motient's ARDIS two-way data network
     provides coverage in 520 U.S. towns and cities containing 220
     million people.[^452]

#### Services, Content, and Applications

135. Non-voice services are beginning to play an increasingly important
     role in the CMRS industry. Providers have created and have begun
     offering a variety of specific mobile data services, some of which
     are focused on entertainment, while others are aimed at maintaining
     a constant yet remote connection to work and office life.[^453] The
     mobile data services currently available include paging, text
     messaging, information alerts, ring tones, games, exchanging
     digital photos, web browsing, e-mail, and access to files stored on
     corporate servers. The following sections discuss these individual
     mobile data services and include details on what each service
     entails, service-specific pricing information, and available data
     on usage and subscribership levels.[^454]

136. Pricing for mobile data services varies by service, by provider,
     and, in some cases, by device and by network technology. Some
     mobile telephone carriers offer certain mobile data services on an
     *a la carte* basis in addition to monthly voice service. For
     example, most carriers allow customers to use and pay for text
     messaging without purchasing other mobile data services. Verizon
     Wireless also sells a selection of mobile data applications *a la
     carte* through its "Get It Now" collection of data services, which
     includes ring tones, e-mail, games, and digital photo
     sharing.[^455] These services are sold on a per-use or monthly
     basis, thereby allowing mobile voice customers to purchase them
     individually without paying for a monthly mobile Internet access
     service plan.[^456] Other carriers have taken a different approach
     to mobile data pricing. For example, AT&T Wireless, T-Mobile, and
     Cingular Wireless mobile voice customers who wish to add certain
     mobile data capabilities, such as e-mail, photo sharing, and games,
     must first subscribe to a monthly, megabyte ("MB")-based mobile
     Internet access package.[^457] With these plans, customers pay a
     monthly fee for a certain number of MB to use each month to
     download the applications of their choice. Prices for carriers'
     entry level MB-based data plans run between \$7 and \$10 per
     month.[^458] Finally, Sprint PCS charges \$15 per month, in
     addition to monthly voice service, for unlimited use of a variety
     of mobile data services discussed in detail below.[^459]

137. The mobile data pricing options discussed above are generally
     marketed to customers wishing to use mobile data services on their
     mobile handsets as add-ons to voice service. Many providers also
     offer monthly mobile Internet access service packages designed for
     customers who wish to connect to wireless networks primarily or
     exclusively for data, not voice, use. These customers typically
     access the Internet through a laptop computer with a wireless modem
     card or mobile phone attached, through a PDA with a built-in
     wireless modem or a wireless modem card attached, or via a
     smartphone.[^460] Data-centered pricing plans give subscribers a
     set number of MB to use each month for mobile Internet access. The
     plans range from one MB for approximately \$7 per month, to 20 MB
     for \$34.99 to \$55 per month, to unlimited MB for around \$100 per
     month.[^461] With these plans, customers connect to carriers' next
     generation GPRS or 1xRTT networks, which offer data transfer speeds
     of 30 to 70 kbps.

138. Some providers, including Cingular and AT&T Wireless, do not make a
     distinction on their MB-based pricing plans between accessing the
     mobile Internet from a mobile phone and accessing it from a laptop
     attached to a mobile phone; they offer one set of MB-based pricing
     plans and customers can choose which device to use to consume their
     MB. Cingular's highest level MB-based pricing plan consists of 13
     MB for \$49.99 per month, while AT&T Wireless's includes 8 MB for
     \$19.99 per month.[^462] T-Mobile, on the other hand, offers one
     MB-based plan for Internet access via a mobile phone; another set
     of MB-based plans for access via a smartphone, a PDA, or a mobile
     phone attached to a laptop; and a third set for access via a
     wireless modem card attached to a laptop or PDA. [^463]

139. In addition to mobile telephone carriers, other mobile data
     providers offer mobile Internet access plans for use on PDAs and
     laptop computers. Companies such as Earthlink, Inc. ("Earthlink"),
     GoAmerica, Inc. ("GoAmerica"), Research In Motion, Inc. ("RIM"),
     and Monet Mobile offer enterprise-focused data services -- such as
     e-mail, web, and corporate server access -- using either unlimited
     use or MB-based monthly pricing plans.[^464]

140. We discuss the various ways in which providers price mobile data
     services in order to offer insight into the nature of this segment
     of the CMRS industry and to illustrate the numerous options
     available to consumers from competing firms. The service packages
     described above, as well as most of the individual mobile data
     services described below, have developed so recently, many just in
     the past year, that it is difficult to make historical comparisons
     about them, and there is limited information on the trends related
     to the pricing or packaging of these services.

##### Paging

141. Traditional paging service consists of one-way data communications
     sent to a mobile device that alerts the user when it arrives. The
     communication typically consists of a phone number for the user to
     call, and can also contain other text-based information. Paging
     services are offered by paging carriers as well as by mobile
     telephone carriers. Paging carriers sell paging and messaging, but
     not voice, services using paging and narrowband PCS networks and
     spectrum, and paging/messaging devices or units. Using NRUF data,
     we estimate there were 14.1 million paging units in service at of
     the end of 2002, down 22 percent from 18 million units at the end
     of 2001.[^465] Arch Wireless Communications, Inc. ("Arch Wireless")
     and Metrocall, Inc. ("Metrocall") are the largest paging
     carriers.[^466] Other major paging carriers include SkyTel
     Communications, Inc. and WebLink Wireless, Inc ("WebLink").[^467]

142. Mobile telephone carriers also offer paging services using cellular
     and broadband PCS spectrum, as most digital mobile telephone
     handsets include a paging component and/or Caller ID feature that
     allows users to view the phone number of the person who has called
     them. While paging carriers have faced competition from these types
     of features offered by mobile telephone carriers, traditional
     paging devices are generally less expensive, and paging networks
     have a more powerful signal strength which allows them to provide
     better underground and in-building coverage.[^468] Arch Wireless
     stated in July 2002 that, because of these advantages, the company
     expects paging to remain a viable service in the future, but one
     that will serve a smaller market sector consisting mainly of
     commercial customers such as medical and emergency personnel and
     large industrial companies.[^469] Metrocall commented in October
     2002 that it planned to focus on serving the same type of
     customers.[^470]

##### Text Messaging

143. Text messaging, also called Short Messaging Service ("SMS"),
     provides the ability for mobile telephone users to exchange short
     text messages with other mobile handsets and with e-mail
     addresses.[^471] Text messages are limited to a maximum message
     length ranging from 120 to 500 characters.[^472]

144. Two-way text messaging was introduced in the United States by
     T-Mobile in May 2000.[^473] By the end of 2001, the six nationwide
     mobile telephone carriers, as well as other mobile data providers,
     were offering the service.[^474] During December 2001 and the first
     quarter of 2002, mobile telephone carriers introduced inter-carrier
     interoperability of SMS, allowing subscribers to exchange text
     messages with other carriers' customers.[^475]

145. SMS traffic increased dramatically during 2002. An estimated one
     billion text messages were sent in the United States during June
     2002, up from 30,000 sent during June 2001.[^476] One analyst
     estimates that 20 percent of all U.S. mobile telephone subscribers
     either sent or received a text message during the fourth quarter of
     2002, up from 12 percent during the fourth quarter of 2001.[^477]
     An estimated 28 percent of SMS users were "frequent users," meaning
     they sent or received a message at least once a day.[^478] Among
     adults aged 12 and older, another analyst estimated 19 percent had
     used text messaging services as of February 2003, and 72 percent of
     this group both sent and received messages.[^479] Among young
     adults aged 18 to 24, approximately 45 percent used text messaging
     during the fourth quarter of 2002, up from 22 percent during the
     fourth quarter of 2001.[^480] Many carriers and analysts have
     attributed the growth in text messaging in large part to the
     introduction of inter-carrier interoperability.[^481]

146. Pricing plans for text messaging vary by carrier. However, most
     carriers offer subscribers the option of paying for text messages
     on a per-message basis, or purchasing a package of text messages
     for a monthly fee.[^482] Per-message fees range from 5 to 10 cents
     to send, and zero to 10 cents to receive.[^483] Monthly packages of
     between 100 and unlimited text messages range from approximately
     \$3 to \$8 per month.[^484]

147. In addition to text messaging, many carriers offer instant
     messaging ("IM") services for mobile users. Instant messaging
     services, such as America Online ("AOL") Instant Messenger ("AIM"),
     MSN Messenger, and Yahoo! Messenger, enable users to exchange
     messages with multiple users in a chat-style atmosphere. IM users
     are identified by their IM screen name instead of their phone
     number or e-mail address, and are able to tell whether people from
     their "buddy list" -- a list of other IM users with whom the
     initial user communicates -- are also online. With IM services,
     mobile users can exchange messages with other IM users regardless
     of whether they are on a personal computer ("PC") or a mobile
     phone. However, the various IM services are not interoperable;
     therefore, AIM users can communicate only with other AIM users and
     not with MSN or Yahoo! Messenger users.

148. Many of the major mobile telephone carriers, including Nextel,
     Verizon Wireless, T-Mobile, and AT&T Wireless, offer access to
     AIM.[^485] Some carriers also offer access to Yahoo! or MSN
     Messenger.[^486] IM exchanges are often included in carriers' text
     messaging pricing plans, where one IM message is counted as one
     text message. Nextel offers AIM separately from text messaging and
     charges \$5 per month for unlimited AIM use.[^487]

##### Ring Tones and Personalized Graphics

149. Over the past year, mobile telephone carriers began offering their
     customers a number of new, entertainment-oriented applications and
     services to download and use on their mobile handsets. These
     include ring tones, personalized graphics, games, and the ability
     to take and exchange digital photos.[^488] Ring tone services offer
     users the ability to download pieces of music, ranging from popular
     songs to simple jingles to classical music, which play when the
     phone rings. Some downloadable ring tones are polyphonic, meaning
     they can play up to 16 different sounds, instead of only one,
     simultaneously. Users can also associate specific songs with
     specific incoming calls. With the personalized graphics services,
     subscribers can download wallpaper and screen savers for their
     handset screens, as well as images that can be set to correspond to
     particular incoming calls.

150. There is evidence that ring tones have gained in popularity over
     the past year. One leading U.S. ring tone provider,[^489] Moviso
     LLC ("Moviso"), reported it had 1.5 million downloads during
     December 2002, up from 79,000 during January 2002.[^490] Ring tone
     sales generated an estimated \$1 billion in global revenue during
     2002, and royalties paid to artists or music rights holders totaled
     \$71 million, up 58 percent from the previous year.[^491] Verizon
     Wireless reports that ring tones are the company's most frequently
     downloaded application, and that most of its ring tone customers
     download its most expensive package, a package of 10 songs for
     \$9.99.[^492]

151. Pricing for ring tones and graphics varies by carrier. Some
     carriers require that users subscribe to a monthly mobile Internet
     or text messaging package before the carriers will enable them to
     download these applications. For example, Sprint PCS includes
     access to ring tones and graphics in its \$15 per month mobile
     Internet service plan, Vision, but users must pay additional fees
     to download certain songs and images.[^493] Cingular customers who
     subscribe to a text messaging or mobile Internet package, and
     T-Mobile customers who subscribe to the company's monthly "T-Zones"
     mobile Internet and content package, receive access to downloadable
     songs and graphics, but must also pay a per-song fee for each ring
     tone or image.[^494] Individual ring tone prices range from \$0.99
     with Cingular, AT&T Wireless, and T-Mobile, to \$1.49 with Verizon
     Wireless.[^495] Sprint PCS's Vision ring tones range from \$1.00
     for polyphonic tones to \$3.99 for samples of new and pre-released
     music.[^496] In some cases, carriers may include the ability to
     download a set number of ring tones at no additional cost beyond
     the monthly cost for voice service.

##### Games

152. In addition to text messaging, music, and graphics, another
     entertainment application that all of the six nationwide carriers
     and some smaller operators began offering over the past year was
     mobile gaming. One analyst estimates that 7 million U.S. mobile
     telephone subscribers used mobile phones to play games during
     2002.[^497]

153. Various card, casino, sports, action, adventure, trivia, and puzzle
     games are available for users to download and play locally on their
     handsets or, in some cases, against other players connected to the
     network. Some are based on movies and television shows, such as the
     Lord of the Rings and Top Gun interactive adventure games. However,
     different carriers offer a different selection of games. Some games
     are available from more than one carrier. For example, both Nextel
     and Verizon Wireless offer, among other games, Bowling by JAMDAT
     and ESPN's 2 Minute Drill.[^498] T-Mobile and AT&T Wireless both
     offer Top Gun.[^499] As with many of the other applications
     described above, the ability to download and play games is limited
     to specific handset models; furthermore, certain game features may
     be available only on certain models.[^500]

154. Most carriers offer a per-use, per-month, or unlimited use fee for
     each game. In the example given above, Verizon Wireless and Nextel
     both charge \$5.99 for unlimited lifetime use of Bowling by JAMDAT,
     and Verizon Wireless also offers it for \$2.49 per month.[^501] All
     of the games offered by Nextel are for permanent, unlimited use,
     and per-game costs range from \$4.00 to \$14.00.[^502] Cingular
     charges a \$0.99 per use fee for all of its games.[^503] Other
     carriers, such as T-Mobile and AT&T Wireless, do not charge an
     additional fee for games but require that users subscribe to a
     monthly, MB-based mobile Internet access plan in order to access
     games, and the kilobytes ("kB") used to download games are then
     deducted from the monthly allotment.[^504] If customers choose to
     play a networked game, they must remain online and will continue to
     consume kB as they are playing.

##### Multimedia Messaging Services

155. Over the past year, carriers introduced the ability to exchange
     photo, video, animation, and audio files using a mobile phone.
     These services are often collectively called multimedia messaging
     services ("MMS") because customers are using another medium instead
     of, or in addition to, text to communicate or convey a message.

156. With mobile photo services, users can take, send, download, and
     view digital images using their mobile handsets. They are able to
     send photos to other handsets with image-viewing capabilities or to
     any landline e-mail address. Some carriers also offer the option of
     posting images on a photo sharing web site such as Snapfish.[^505]
     Users can save photos to use as backgrounds on their handset
     screens or for Picture Caller ID.[^506] At least one carrier has
     begun offering its customers the ability to download and view video
     clips sent by friends or family or to view live video from cameras
     at various public locations.[^507] Some carriers also enable
     customers to send selected songs and animation clips to other
     mobile users to convey a message.[^508]

157. MMS services are generally available only on certain mobile handset
     models. Services involving taking and sending photos, for instance,
     require handsets with built-in or attachable digital cameras. As of
     April 2003, at least six major carriers, including five of the six
     nationwide carriers and ALLTEL, and their affiliates were offering
     MMS.

158. In order to access MMS services, many carriers -- including
     Cingular, AT&T Wireless, and T-Mobile -- require that users first
     subscribe to a monthly mobile Internet access plan in addition to
     voice service, and the kB used to upload and download digital photo
     and video files are deducted from the subscriber's monthly
     allotment of MB.[^509] Verizon Wireless, on the other hand, allows
     its customers to access individual MMS services without a monthly
     MB-based mobile Internet access subscription. Its customers can
     instead pay for unlimited monthly use of one of its individual MMS
     applications, such as Snapfish, exego, or Logitech, at prices
     ranging from \$2.99 to \$5.99 per month.[^510] Sprint PCS includes
     the ability to take and send digital photos in its \$15 per-month
     Vision package.[^511]

##### Information Alerts

159. Many mobile data providers offer their text messaging users the
     ability to receive short, text-based, customized information
     alerts, including news updates, weather forecasts, sports scores,
     stock quotes, horoscopes, and traffic information, on their mobile
     devices. Users specify on their carrier's web site which content
     they would like to receive and must own a text messaging-capable
     handset. The range of available content is based on the number and
     type of content providers with whom the carrier has an agreement.
     For example, Verizon Wireless offers information alerts from
     Forbes.com, ABC News, Astrology.com, Fox Sports, the Weather
     Channel, USA Today, and TV Guide.[^512] Pricing for information
     alerts is generally the same as for text messaging.[^513] Some
     carriers require the purchase of a monthly text messaging package
     in order to register to receive information updates, and one
     information update is then counted as one text message.[^514]

##### Web Browsing

160. In contrast to information alerts, which push content to mobile
     users, wireless web services enable users to pull web-based
     information and applications from the Internet to their mobile
     devices. Subscribers who connect to the Internet via a wireless
     modem card attached to a laptop can surf the entire web using
     common PC browsers, such as Internet Explorer or Netscape. Users
     connecting via PDAs or some smartphone models are typically able to
     access most web sites, although some web pages may be difficult to
     view given the smaller screen size and other constraints of such
     devices.[^515]

161. With mobile telephone handsets, web browsing is generally limited
     to the web sites offered by the content providers with whom a
     carrier has a content agreement. Therefore, most mobile telephone
     carriers allow wireless web users to access a variety of popular
     web sites and applications on their mobile handsets but do not
     allow access to the entire web. While the specific sites available
     to users vary by carrier, most carriers offer at least one version
     of the following: news and traffic updates; weather reports; sports
     scores; stock quotes and financial data; movie, flight, and
     restaurant information; and horoscopes. Other applications
     available to wireless web users include shopping on sites such as
     Amazon.com, search engines and portals, and downloadable recipes.
     The content is typically text-based. One analyst estimates that, as
     of February 2003, 21 percent of web-enabled mobile phone users, or
     7.5 percent of all mobile telephone subscribers, were using their
     phones to browse the Internet.[^516]

162. The ways in which carriers charge for wireless web browsing
     parallels the ways in which they charge for many of the other
     mobile data services they offer. For example, the carriers who use
     per-MB pricing plans to offer a selection of mobile data services
     to their mobile telephone customers generally include web browsing
     in that selection, and then deduct the kB used for web browsing
     from their subscribers' monthly allotment of MB.[^517] Sprint PCS
     includes web browsing in its package of services available through
     its \$15 per month Vision mobile data plan.[^518] In addition to
     offering MB-based pricing plans, some carriers also sell web
     browsing for a flat monthly fee, and the minutes used for web
     access are deducted from a subscriber's monthly bucket of voice
     minutes.[^519] Finally, some carriers, such as Verizon Wireless
     with its Get It Now service, sell individual web applications on an
     *a la carte* basis.[^520]

##### E-mail 

163. Most mobile data providers currently offer users the ability to
     access e-mail messages while mobile. E-mail is distinguishable from
     text messaging in that e-mail services do not have the maximum
     character limits that text messaging services do.[^521] Moreover,
     mobile e-mail services allow users to access or to receive
     automatically messages sent to their pre-existing work or personal
     e-mail accounts. Some mobile e-mail services allow users to access
     existing, web-based or POP3[^522] e-mail accounts provided by web
     portals such as Yahoo! or MSN or by ISPs such as Earthlink. Other
     mobile e-mail services give users direct access to their corporate
     or office-based e-mail accounts. Some mobile e-mail services are
     "pushed" or always-on, meaning users will receive their messages
     whenever their device is turned on, while other e-mail services are
     "pulled" and require users to dial-up periodically in order to
     receive their messages.[^523]

164. Many providers offer both the ability to send and receive messages
     from a POP3 account as well as the ability to access corporate
     e-mail accounts. Mobile telephone carriers frequently include POP3
     e-mail access as one of many available applications in a mobile
     Internet access package. For example, subscribers to any of
     T-Mobile's standard, MB-based T-Zones mobile Internet packages can
     access POP3 email accounts from their handsets.[^524] Subscribers
     to one of Verizon Wireless' web browsing service plans can access
     an MSN Hotmail email account.[^525]

165. Carriers typically charge an additional fee to enable users to
     access messages from a corporate email account on a mobile handset.
     For example, subscribers to Cingular Wireless's Xpress Mail Network
     Edition can have messages from a Microsoft Exchange or Lotus Notes
     corporate email account forwarded to a GPRS mobile handset or
     Handspring, Inc. ("Handspring") Treo for an additional \$10 per
     month beyond the price of mobile Internet access. [^526] AT&T
     Wireless's mMode mobile Internet access subscribers can also have
     Microsoft Exchange or Lotus Notes e-mail messages forwarded to a
     mobile device for an additional \$2.99 per month beyond the price
     of mobile Internet access.[^527]

166. BlackBerry e-mail service, which was created by RIM, allows users
     to receive pushed e-mail messages automatically from an existing
     corporate e-mail account on one of RIM's mobile devices.[^528]
     Users can also send, forward, and delete messages, and view
     attachments. BlackBerry service is sold directly by RIM as well as
     by some mobile telephone carriers, such as T-Mobile and Cingular,
     and by other mobile data providers, including GoAmerica and
     Earthlink.[^529] The basic BlackBerry e-mail service typically
     costs \$39.99 per month for unlimited access. Additional
     applications for RIM devices, such as web browsing, corporate
     server access, and in some cases voice, can be purchased for an
     additional monthly fee.[^530] As of March 1, 2003, there were
     534,000 total BlackBerry users, and approximately 10,000
     organizations had integrated BlackBerry into their corporate e-mail
     systems.[^531]

##### Corporate Server Access 

167. Several mobile data providers offer -- either directly to
     individual consumers or to enterprise customers to implement for
     their employees -- the ability to access on a mobile device company
     intranets and files stored on corporate servers. For example,
     Cingular customers who purchase the operator's Data Connect service
     in addition to a basic mobile Internet access plan can establish a
     Virtual Private Network ("VPN") connection to their office server
     to retrieve files and intranet applications from a laptop or PDA
     with a data-capable handset attached.[^532] In addition, RIM offers
     its BlackBerry Enterprise Server customers an add-on product,
     called Mobile Data Service ("RIM MDS"), which allows these
     customers' employees to access, on their RIM devices, files and
     intranet applications stored on corporate servers. RIM MDS also
     enables these users to automatically receive files and information
     on a "pushed" basis instead of having to first dial in to the
     corporate server.[^533] As mentioned in the *Seventh Report*,
     Microsoft Corp. ("Microsoft") became a leading facilitator of
     mobile corporate server access with its releases of the Pocket PC
     2002 PDA operating system and the Pocket PC 2002 Phone Edition
     smartphone operating system in late 2001 and early 2002. Both
     operating system editions allow users of Pocket PC 2002 devices to
     establish a secure VPN connection over the wireless Internet to
     retrieve e-mail messages and files that are stored on corporate
     servers.[^534]

##### Location-Based Services 

168. The Commission's Enhanced 911 rules ("E911") provide that starting
     on October 1, 2001, wireless carriers were required to begin the
     process of providing automatic location identification ("ALI") for
     911 calls, upon request by public safety answering points
     ("PSAPs").[^535] Carriers have begun deploying the technology for
     ALI, called E911 Phase II.[^536] The Commission has granted limited
     waivers allowing delays in initial deployment of Phase II by the
     major national wireless carriers, based on compliance with
     specific, detailed deployment benchmarks.[^537] Similarly, somewhat
     later initial deployment schedules were also set for smaller
     carriers.[^538] In addition, proceedings to enforce the Phase II
     rules and compliance plans have been undertaken by the FCC's
     Enforcement Bureau, in some cases leading to consent decrees that
     established revised Phase II deployment schedules.[^539]

169. Wireless carriers may comply with the Phase II requirements using
     any of several location technologies or combinations of
     technologies.[^540] For example, carriers may employ network-based
     technologies, which require upgrades to carrier networks, or
     handset-based technologies, which require upgrades to both handsets
     and carrier networks. Currently, wireless carriers are primarily
     deploying one of two location technologies, depending upon the
     carrier's air interface technology. Nationwide CDMA carriers Sprint
     PCS and Verizon Wireless, and iDEN carrier Nextel are using
     Assisted GPS ("A-GPS"), a technology that requires handsets
     upgraded to include Global Positioning System ("GPS") location
     capability in addition to network components. [^541] GSM carrier
     T-Mobile, as well as AT&T Wireless and Cingular Wireless, which
     operate with TDMA/GSM networks, are deploying or planning to deploy
     a network-based technology called Time Difference of Arrival
     ("TDOA"), which triangulates the location of handsets based on the
     arrival times of signals from the handset at three or more network
     cell sites equipped with location measurement equipment.[^542] TDOA
     does not require changes to handsets.

170. Phase II E911 deployment began in the fall of 2001 in the state of
     Rhode Island and in individual counties in Illinois and Indiana.
     Sprint PCS began distributing location-capable handsets, with A-GPS
     technology, in October 2001, Verizon in December 2001, and Nextel
     in October 2002. By the end of 2002, Sprint PCS reported selling a
     total of 5.8 million A-GPS-enabled handsets (including 50 percent
     of all handsets sold in the fourth quarter of 2002) and 12
     different handset models. Verizon Wireless reported offering 10
     different A-GPS-enabled handset models, and Nextel said it was
     selling two such handsets.[^543] Each carrier had also deployed
     network equipment and upgrades needed to provide A-GPS. Carriers
     employing the network-based TDOA technology also report substantial
     Phase II deployments. AT&T Wireless had deployed TDOA equipment at
     3,292 cell sites by the end of 2002 and Cingular Wireless at more
     than 2,400 sites.[^544]

171. As a result of these individual carrier deployments, the overall
     deployment of Phase II expanded substantially in 2002.[^545] While
     deployment of Phase II capability by wireless carriers is now well
     underway, actual implementation has been slowed by a variety of
     issues, including carrier delays that have resulted in enforcement
     actions against three of top six wireless carriers, interconnection
     and pricing of necessary wireline carrier facilities and services,
     and delays in upgrades to PSAP facilities and equipment necessary
     for the PSAP to receive and use location information (in some cases
     related to funding issues).[^546]

172. In addition to E911, ALI can be used for a variety of other
     commercial location-based services such as driving directions,
     mobile yellow pages, and the location of retailers, restaurants, or
     movie theaters.

173. Carriers' abilities to obtain and transmit precise location
     information in fulfillment of the Commission's E911 rules may
     trigger privacy considerations. In 1999, Congress adopted the
     Wireless Communications and Public Safety Act ("911 Act") to
     encourage the use of wireless services and to promote public safety
     by providing protection to users' location information and
     specifying the conditions for the release of such information.
     Specifically, Section 5 of the 911 Act amended Section 222 of the
     Communications Act that governs carriers' use or disclosure of
     customer proprietary network information ("CPNI"). Under the 911
     Act, the disclosure or use of wireless location information without
     the express prior authorization of the customer is restricted,
     except in specified emergency situations to respond to a wireless
     user's emergency call or in the transmission of automatic crash
     data.

#### Devices

174. Mobile users can access data services through a variety of devices,
     including those that also have voice capabilities, such as mobile
     telephone handsets and smartphones, as well as devices that only
     offer data capabilities, such as pagers, two-way messaging devices,
     PDAs, and wireless modem cards.[^547] Some PDAs can establish a
     mobile Internet connection with a built-in wireless modem while
     others require the attachment of a wireless modem card or a mobile
     phone. Laptop users can access the Internet while mobile by
     attaching a wireless modem card or mobile telephone to their
     computers. One analyst estimates that, as of the end of 2002, 84
     percent of all mobile data devices were mobile telephone handsets
     or smartphones, and 16 percent were other, non-voice devices.[^548]
     This is a change from the end of 2001 when an estimated 87 percent
     of all mobile data devices were telephone-based, and 13 percent
     were non-voice devices.[^549]

175. During 2002, equipment manufacturers released a number of new
     wireless modem cards and smartphones that connect to mobile
     telephone carriers' higher speed, next generation GPRS and 1xRTT
     networks. For example, the major wireless modem card manufacturers,
     Novatel Wireless, Inc. ("Novatel Wireless") and Sierra Wireless,
     Inc. ("Sierra Wireless"), have released tri-band GSM/GPRS modem
     cards that can be used with PCs and some Pocket PC models and which
     connect to GSM/GPRS networks operating in the 900 MHz, 1800 MHz,
     and 1900 MHz bands.[^550] These companies have also released
     wireless modem cards that work with CDMA 1xRTT networks.[^551] Most
     wireless modem cards made prior to 2002 connected to the Internet
     via CDPD networks.[^552]

176. Equipment providers and mobile operators also launched several new
     smartphone devices during 2002 that work on next generation
     networks. For example, RIM released a new model, the BlackBerry
     6710, that works on GSM/GPRS networks and is available from
     T-Mobile.[^553] The 6710 allows users to access RIM's BlackBerry
     e-mail service as well as make voice calls. RIM has released a CDMA
     1xRTT BlackBerry model as well, the 6750, which Verizon Wireless
     began selling in April 2003.[^554] Since the publication of the
     *Seventh Report*, Sprint PCS, T-Mobile, and AT&T Wireless have
     begun selling next-generation smartphones that run Microsoft's
     Pocket PC Phone Edition operating system and are made by
     manufacturers such as Toshiba and Siemens.[^555] In addition,
     Handspring unveiled both GPRS and 1xRTT versions of its Treo
     smartphone, which runs the Palm operating system.[^556] T-Mobile
     and Cingular sell the GPRS version of the Treo, while Sprint PCS
     sells the 1xRTT version.[^557] Palm has also developed its own
     smartphone device, the Tungsten W, which allows users to make voice
     calls using a hands-free earpiece and runs on AT&T Wireless's
     GSM/GPRS network.[^558] T-Mobile also began offering a new
     smartphone, the Sidekick, which is marketed to mainstream consumers
     rather than enterprise customers and features a rotatable screen, a
     thumb QWERTY keypad, and an attachable camera.[^559] T-Mobile
     offers Sidekick-specific service plans that include 1000 text or
     AIM messages per month as well as unlimited access for one year to
     the following mobile services: web browsing, POP3 e-mail access,
     and digital photo sharing.[^560]

177. The CMRS industry has witnessed a convergence of mobile voice and
     mobile data devices, and many of the same mobile data services are
     currently available on many different types of devices.
     Nevertheless, device categories are limited in the data services
     they are capable of offering, and not all services are available on
     all types of devices. For example, wireless modem cards cannot
     provide voice functionality. Mobile phone handsets and pagers do
     not allow corporate server access. Furthermore, within the general
     categories of devices, specific device models vary in the types of
     services they can provide. As mentioned above, customers must first
     own a phone or other device capable of accessing a specific service
     or set of services before they can purchase and use such
     service(s). For example, most of the mobile phone handsets sold
     today are capable of text messaging, but only a limited number are
     capable of newer, more advanced services such as interactive games.
     It is estimated that 35 percent of all mobile phones in use as of
     February 2003 were capable of web browsing, up from 21 percent in
     November 2002.[^561] And, in order to take and send digital photos,
     users must have devices with built-in or attachable digital
     cameras.

178. Even in the cases where multiple device models offer the same
     service, a range of factors specific to individual device models
     influences how users experience that service, including the size
     and resolution of the device's screen and whether it is color or
     black and white, the type of keypad, the operating system, the
     battery life, and the storage and processing power.

179. One feature that equipment manufacturers have begun to add to many
     new models of mobile devices is Bluetooth connectivity. Bluetooth
     is a technology used to establish wireless connectivity between
     electronic devices that are up to 10 meters apart.[^562] It
     eliminates the need for cables to connect various devices, such as
     mobile phones, PDAs, computers, printers, and digital cameras, to
     one another. One analyst estimates that 35 million Bluetooth
     chipsets had been shipped worldwide as of the end of 2002, up from
     10 million at the end of 2001.[^563] In addition, the Bluetooth
     Special Interest Group ("SIG") estimates that mobile telephones
     constitute two-thirds of all Bluetooth-enabled products.[^564]

#### Wi-Fi

180. Wi-Fi or Wireless Fidelity, also known as the Institute of
     Electrical and Electronics Engineers' ("IEEE") family of 802.11x
     standards, is a technology used to create wireless local area
     networks ("WLANs") with a range of 150 to 250 feet.[^565] Wi-Fi
     operates on an unlicensed basis and allows data transfer speeds of
     up to 11 Mbps for 802.11b and up to 54 Mbps for 802.11a and
     802.11g. Users of mobile devices with Wi-Fi capabilities can
     establish high-speed wireless Internet connections within buildings
     or spaces, commonly called "hot spots," where Wi-Fi technology has
     been deployed. Hot spots typically rely on high-speed landline
     technologies, such as T-1 lines, DSL, or cable modems, to connect
     to the PSTN and Internet. Public hot spots include restaurants,
     coffee shops, hotels, airports, convention centers, and city parks,
     streets, and squares.[^566] The industry estimates there were
     between 3,000 and 4,000 Wi-Fi hot spots at the end of 2002.[^567]
     Over the past year, several major hotel and restaurant chains,
     including McDonalds, Schlotzsky's Deli, Hilton Hotels & Resorts,
     Starwood Hotels, Marriott International, InterContinental Hotels,
     and Omni Hotels, have announced that they plan to make Wi-Fi access
     available to their customers in some or all of their
     locations.[^568]

181. While Wi-Fi itself is not a CMRS service,[^569] it has begun to
     play an increasingly important role in the CMRS industry, and many
     CMRS providers, as discussed below, have recently entered the Wi-Fi
     business. Because the technology allows consumers to obtain
     high-speed wireless Internet connections within certain locations,
     it has the potential to act as both a substitute and a complement
     to data services offered over mobile telephone networks. However,
     several obstacles currently prevent Wi-Fi from competing directly
     with CMRS-based mobile data services. First, roaming among Wi-Fi
     hotspots that are not part of the same network or are maintained by
     different providers can be problematic. Second, frequent handoffs
     are required in order for Wi-Fi users to roam beyond the relatively
     short service radii of individual hotspots. Technical obstacles
     also currently prevent Wi-Fi from connecting seamlessly with wide
     area CMRS networks and therefore acting as a more effective
     complement to such networks. However, carriers and equipment
     providers are working to overcome these obstacles.[^570]

182. There are several emerging business models for Wi-Fi hot spots.
     These include: individuals or companies who install Wi-Fi equipment
     in commercial locations; wholesale aggregators who combine local
     installations to provide a national footprint; major CMRS
     providers; grass roots individuals who offer free or low-cost
     access; and providers of other products, such as McDonald's, that
     offer Wi-Fi in order to sell their primary product.[^571] When a
     Wi-Fi network operator chooses to install hot spot equipment in
     partnership with another commercial entity, the resulting Wi-Fi
     offering typically combines and builds on the special expertise
     derived from each member of the partnership.[^572] Generally
     speaking, hot spot operators are companies that set up and maintain
     Wi-Fi networks in public locations and sell Wi-Fi access to end
     users. In return, hot spot operators share the revenue derived from
     the Wi-Fi access with the hosting business.

183. Over the past year, several mobile telephone carriers have entered
     the hot spot operation business through acquisitions, partnerships,
     or independent deployments. In November 2001, T-Mobile acquired hot
     spot operator, MobileStar, and has since expanded Wi-Fi access to
     1,800 Starbucks coffee shops and 100 American, United, and Delta
     Airlines' airport lounges.[^573] T-Mobile expects to begin offering
     integrated pricing and billing of its Wi-Fi high-speed Internet
     access and GPRS voice and data services during the second half of
     2003.[^574] During the first quarter of 2003, AT&T Wireless and
     Verizon Wireless announced that they had signed roaming agreements
     with hot spot operator, Wayport.[^575] Wayport operates Wi-Fi
     access points in 10 airports and more than 525 hotels.[^576] AT&T
     Wireless has begun reselling Wayport's Wi-Fi access service under
     the brand name GoPort.[^577] AT&T Wireless has also independently
     deployed Wi-Fi access in the Denver International Airport and plans
     to deploy the service at the Philadelphia International Airport;
     these locations have become or will become part of Wayport's hot
     spot network.[^578] Verizon Wireless plans to begin reselling
     Wayport service and to offer complementary access between Wi-Fi
     networks and its wide area CDMA network in the third quarter of
     2003.[^579] Furthermore, Sprint PCS has announced that it is
     pursuing Wi-Fi/mobile network integration and has invested in hot
     spot aggregator, Boingo.[^580] Hot spot aggregators do not deploy
     Wi-Fi infrastructure but instead aggregate disparate hot spots in
     order to allow their subscribers to roam to all of the hot spots
     under its umbrella. As of March 2003, Boingo offered Wi-Fi access
     in over 1,100 hot spots.[^581]

184. In addition to Wi-Fi involvement by mobile telephone carriers,
     Intel, IBM, and AT&T announced in December 2002 that they had
     created a new company, Cometa Networks, which plans to begin
     deploying Wi-Fi access points throughout the top 50 U.S. cities
     during 2003.[^582] The founding companies expect Cometa to equip
     20,000 locations with Wi-Fi access by 2005.[^583] And, in May 2003,
     Verizon began offering Wi-Fi access at 150 pay phones in New York
     City.[^584] The company plans to eventually expand the service to
     1,000 pay phones throughout New York City.[^585]

#### Telemetry and Telematics

185. Telemetry and telematics both involve the use of wireless
     technology to transfer data between systems and devices. Wireless
     telemetry is the monitoring of mobile or fixed equipment in a
     remote location. The most common example of wireless telemetry is
     the remote monitoring of utility meters by utility and energy
     companies, called automatic meter reading ("AMR"). With telematics
     systems, a person in a remote location can access information using
     various wireless technologies. Telematics is most often used to
     describe vehicle navigation systems, such as OnStar, where drivers
     and passengers employ GPS technology to obtain directions, track
     their location, and obtain assistance when a vehicle is in an
     accident.

186. Location-based services first appeared in vehicles as navigational
     devices using GPS technology to determine the vehicle's
     location.[^586] However, OnStar, a wholly owned subsidiary of
     General Motors, Inc. ("GM") formed in 1996, employs both GPS
     technology and terrestrial wireless networks. The basic, original
     OnStar service connects drivers to a live OnStar operator who
     pinpoints the location of the vehicle and provides verbal driving
     directions.[^587] OnStar also offers a variety of other in-vehicle
     communication and location-based, telematics services, including
     remote access to a vehicle's horn, door locks, and headlights;
     automatic alerting of public safety officials if an airbag is
     deployed; roadside assistance; mobile telephone service; and e-mail
     and Internet access.[^588] As of February 2003, OnStar had more
     than 2 million subscribers and was available in 60 vehicle
     models.[^589]

187. As mentioned above, wireless telemetry systems are used mainly for
     AMR, but can also be used to monitor a variety of other fixed and
     mobile machines, including health care equipment, HVAC systems, gas
     and oil pipelines, vending machines, alarm systems, parking meters,
     streetlights, smoke/fire detectors, factory process systems, and
     photocopiers. Businesses and consumers can also employ wireless
     telemetry systems to remotely monitor the location and status of
     vehicles. A few examples of this include LoJack, corporate fleet
     tracking, and remote engine diagnostic systems. LoJack is a system
     used to recover stolen vehicles. Consumers can purchase the LoJack
     VHF transponder unit for their vehicles, and the LoJack Corporation
     and law enforcement agencies maintain the system used to track the
     location of vehicles in the case that they are stolen.[^590] Over
     40,000 stolen vehicles equipped with LoJack have been recovered by
     U.S. law enforcement agencies.[^591]

188. The largest AMR telemetry provider is Itron, Inc. ("Itron").[^592]
     As of the end of 2002, 1,100 utility companies used Itron's
     wireless telemetry technology to collect and analyze meter data at
     24 million gas, electric, and water meters.[^593] Many mobile data
     providers, including WebLink, Arch Wireless, and Cingular Wireless,
     offer a variety of telemetry services, either directly to end users
     or through other telemetry providers who create and maintain
     telemetry systems for end users but rely on the networks of mobile
     data providers.[^594] At least one paging company has stated that
     telemetry services represent a future business opportunity for
     paging carriers, but that greater demand from utility companies for
     wireless technologies must exist in order to generate higher
     equipment volume and lower per-unit equipment costs.[^595] In
     addition, Aeris.net ("Aeris") and NumereX Corp. lease capacity on
     mobile telephone networks to offer telemetry products. Aeris sells
     the use of its network to other telemetry service providers.[^596]

### Satellite Operators

189. As of year-end 2002, a number of carriers were providing mobile
     satellite services ("MSS") in the United States.[^597] For example,
     both Globalstar Telecommunications LTD. ("Globalstar") and Iridium
     Satellite LLC. ("Iridium Satellite") are using Big LEO[^598] MSS
     licenses to offer mobile voice services. [^599] Inmarsat Ltd.
     ("Inmarsat") and Mobile Satellite Ventures ("MSV"), the successor
     to Motient Services Inc. which had previously entered into a joint
     venture with Mobile Satellite Ventures (Canada) Inc. and the
     Canadian licensee of the L-band MSS satellite MSAT-1 (TMI
     Corporation), were also providing voice and data communications via
     satellite at year-end 2002. The companies offer voice and data
     services in fixed and mobile environments. The mobile environment
     consists of a laptop-sized or larger terminal that can be
     transported from one location to another. Another company, ICO,
     launched one satellite to operate in the 2 GHz MSS band in 2001,
     but has not launched commercial service.

190. In 2001, two MSS licensees made proposals to the FCC to integrate
     terrestrial components with their networks using assigned MSS
     frequencies to augment signals in areas where the satellite signal
     is blocked, particularly in urban areas and inside buildings.[^600]
     In response to those filings, the Commission released an NPRM
     seeking comment on different proposals for authorizing the
     provision of terrestrial service on MSS frequencies.[^601] On
     February 10, 2003, the Commission released a Report and Order and
     Notice of Proposed Rulemaking permitting MSS providers in three
     frequency bands, 2 GHz,[^602] Big LEO, and L-Band,[^603] to provide
     an ancillary terrestrial component ("ATC") to their satellite
     systems.[^604] An MSS licensee will be permitted to provide service
     using an ATC provided that the MSS licensee: (1) has launched and
     operates its own satellite facilities; (2) provides substantial
     satellite service to the public; (3) provides integrated ATC; (4)
     observes existing satellite geographic coverage requirements;
     and (5) limits ATC operations only to the authorized satellite
     footprint.[^605] The Commission concluded that permitting MSS ATCs
     in this manner should: (1) increase the efficiency of spectrum use
     through MSS network integration and terrestrial reuse and permit
     better coverage in areas that MSS providers could not otherwise
     serve; (2) reduce costs, eliminate inefficiencies and enhance
     operational ability in MSS systems; (3) provide additional
     communications that may enhance public protection; and (4)
     strengthen competition in the markets served by MSS.[^606]

191. Mobile Satellite Ventures ("MSV") filed comments in response to the
     NOI, indicating that its current service offerings are not
     competitive with terrestrial-based mobile voice and data services
     because of the inability of MSS carriers to provide service in
     urban environments. MSV stated that the inability of MSS providers
     to serve urban environments by offering a terrestrial component has
     prevented them from developing a critical mass of customers.[^607]
     Nevertheless, in our Report and Order released on February 10,
     2003, providing for the authorization of MSS ATC, we noted that
     terrestrial CMRS and MSS ATC are expected to have different prices,
     coverage, product acceptance and distribution. Therefore, the two
     services appear, at best, to be imperfect substitutes for one
     another that would be operating in predominately different market
     segments.[^608] We will continue to monitor this sector as it
     develops.

### International Comparisons

#### Performance

192. The *Seventh Report* and previous reports compared mobile market
     performance in the United States, Western Europe and parts of the
     Asia-Pacific region with regard to mobile penetration, usage, and
     pricing.[^609] These comparisons have shown three consistent
     differences in performance between the U.S. mobile market and
     mobile markets abroad. First, mobile penetration is significantly
     higher in Western Europe and parts of the Asia-Pacific region than
     in the United States. Second, average minutes of use per subscriber
     are significantly higher in the United States than in Western
     Europe and parts of the Asia-Pacific region. Third, revenue per
     minute, a commonly used proxy for pricing, is significantly lower
     in the United States than in Western Europe and parts of the
     Asia-Pacific region.

193. Based on more recent data, it is clear that these three differences
     continued into the year 2002.[^610] Mobile penetration remains
     significantly higher in Western Europe and parts of the
     Asia-Pacific region than in the United States. Mobile penetration
     averaged an estimated 80 percent in Western Europe at the end of
     2002, and ranged from highs of more than 90 percent in Italy and
     Portugal to a low of approximately 63 percent in France.[^611]
     Thus, as in previous years, U.S. mobile penetration at the end of
     2002, at approximately 49 percent, was lower than the lowest mobile
     penetration rate in Western Europe. Japan finished the year with a
     mobile penetration level of 62 percent,[^612] only slightly below
     the low end of the range in Western Europe and significantly higher
     than the U.S. level. South Korea's year-end penetration level was
     within the range of European levels at 68 percent.[^613]

194. Average minutes of use per subscriber continue to be significantly
     higher in the United States than in Western Europe and parts of the
     Asia-Pacific region.[^614] In particular, average MOUs were
     estimated to be approximately 458 per month in the United States in
     the fourth quarter of 2002. [^615] This compares with an average
     across Western Europe of just 116, and with figures in individual
     European countries that ranged from a high of 200 in Ireland to a
     low of 72 in Germany.[^616] MOUs in Japan and South Korea were
     considerably higher than the Western European average, but still
     well below the U.S. figure, at 170 and 296, respectively.[^617]
     MOUs in South Korea are high by global standards.

195. Revenue per minute[^618] in Western Europe averaged nearly \$0.24
     in the fourth quarter of 2002, and ranged from a high of \$0.29 in
     Germany to lows of \$0.19-\$0.20 in France, Italy, Portugal, and
     Ireland.[^619] Average revenue per minute in the United States
     during the same period, at \$0.12, was about half the European
     average and well below the low end of the European range.[^620]

196. The *Seventh Report*[^621] noted that revenue per minute in Japan
     was nearly double the U.S. level in 2001 and was also the highest
     in the group of European and Asian-Pacific countries being
     compared. This pattern persisted in 2002. At \$0.30, revenue per
     minute in Japan was more than double the U.S. figure in 2002, and
     it continued to be higher than revenue per minute in Western
     European mobile markets.[^622] In contrast, revenue per minute in
     South Korea, at \$0.10, was even lower than the U.S. figure.[^623]

#### Market Environment

197. As discussed in the *Seventh Report*,[^624] the explanations
     offered by analysts for the foregoing international differences in
     mobile market performance generally focus on two fundamental
     differences between the mobile market environment in the United
     States and the mobile market environment abroad. The first
     difference relates to the competitive environment in which carriers
     operate, and the second to the use of mobile party pays ("MPP")
     rather than calling party pays ("CPP") for billing mobile calls.

198. A competitive market environment stimulates mobile subscriber
     growth and thereby drives up mobile penetration by exerting
     downward pressure on the pricing of services paid for by
     subscribers. Paradoxically, however, the relatively high levels of
     mobile penetration in Western Europe have not been achieved as the
     result of a more competitive market environment. On the contrary,
     analysts agree that mobile markets in Western Europe are both
     structurally and behaviorally less competitive than the U.S. mobile
     market, and that this is one of the principal reasons that revenue
     per minute is significantly lower, and average mobile usage
     significantly higher, in the United States than in Western
     Europe.[^625]

199. One dimension of market structure is the number of competitors per
     market. European countries have achieved significantly higher
     mobile penetration rates than the U.S. with typically just three to
     four operators per market.[^626] This compares with six national
     operators in the United States and from five to seven or more
     operators in a large percentage of U.S. regional markets.[^627]
     Only 21 percent of the population in Western Europe can choose from
     five mobile operators, whereas 80 percent of the U.S. population
     can choose from five mobile operators and approximately 21 percent
     of the U.S. population can choose from seven or more
     operators.[^628]

200. A second dimension of market structure is the size distribution of
     market shares among competitors. In addition to having a smaller
     number of competitors, European mobile markets are characterized by
     significantly greater inequality of market shares among competitors
     than the U.S. market. In particular, mobile markets in Western
     Europe are typically dominated by the top two mobile operators. The
     two mobile operators with the largest market shares control more
     than 70 percent of all mobile subscribers in virtually all Western
     European mobile markets except the UK, and in the majority of these
     markets they control more than 80 percent of all mobile
     subscribers.[^629] In the United States, by contrast, less than 40
     percent of mobile users subscribe to the services of the number one
     and number two mobile competitors.[^630]

201. The difference in the size distribution of market shares and the
     level of dominance in European mobile markets are important because
     they may affect the competitive interactions among the market
     participants, particularly with regard to pricing behavior.[^631]
     One analysis posits that pricing behavior in some European mobile
     markets is consistent with an "umbrella pricing" model.[^632] Since
     the number one and number two operators in European mobile markets
     that are dominated by the top two competitors have an incentive to
     keep prices high, the pressure to reduce prices depends on how the
     weakest competitors behave. Pricing pressure will come, if at all,
     from the third or fourth largest competitor. However, the weaker
     players are typically unwilling to disturb the pricing framework
     established by the dominant duopoly, preferring instead to operate
     peacefully under the duopoly's "pricing umbrella."

202. As they have in the past, some analysts continue to use the word
     "benign" to characterize the pricing of wireless services in
     European mobile markets.[^633] In contrast, the past pricing
     promotions of some U.S. carriers are characterized as aggressive,
     and the U.S. mobile market is described as having experienced a
     "price war" among the six national competitors.[^634]

203. One analysis highlights the difference between U.S. and European
     mobile pricing by focusing on the comparison with the UK.[^635] The
     UK is widely regarded as the most competitive large mobile market
     in Western Europe. With all four British GSM operators having a
     relatively equal share of total subscribers, the UK is the only
     large European market that is not dominated by the number one and
     number two competitors. Nevertheless, a comparison of selected
     contemporary rate plans offered by Verizon Wireless in the United
     States and Vodafone in the UK finds that the pricing differential
     between the United States and the UK is significant, even allowing
     for the fact that the service bundle offered by Verizon Wireless
     applies to incoming as well as outgoing minutes.[^636]

204. The more aggressive pricing behavior of U.S. mobile operators also
     partly explains why U.S. mobile subscribers use their phones so
     much more than European mobile subscribers. In the United States,
     competitive pressure has induced mobile operators to offer
     progressively larger and larger buckets of minutes, and to include
     virtually unlimited night and weekend minutes and also
     long-distance in their service offerings.[^637] In contrast, the
     bucket plans offered by European mobile operators are not priced as
     attractively as U.S. offerings of comparable size, they generally
     do not include unlimited off-peak minutes, and they are not offered
     by all mobile operators in all Western European markets.[^638]
     Using the Verizon-Vodafone comparison again, one analysis concludes
     that a U.S. mobile subscriber who opts for a large bundle of
     minutes with virtually unlimited night and weekend minutes
     perceives that the incremental price of using a wireless minute is
     virtually free, whereas a mobile subscriber in the U.K. does not
     have the same perception.[^639] Moreover, the incremental price of
     making a wireless call generally compares more favorably to the
     incremental price of making an equivalent landline call in the
     United States than in the U.K.[^640] This analysis indicates that
     the attractive pricing of bucket plans by U.S. mobile operators
     stimulates wireless usage per subscriber, and does so in part by
     encouraging greater substitution of wireless calls for landline
     calls in the United States than is the case in European
     markets.[^641]

205. As noted earlier, the ability of Western European countries to
     achieve significantly higher mobile penetration rates than the
     United States with far higher levels of market concentration and
     far less competitive pressure on pricing may at first glance appear
     paradoxical from the perspective of economic theory. One possible
     explanation for this paradox is that, other things equal, CPP may
     stimulate greater subscriber demand for mobile phone service than
     MPP.[^642] With CPP, the subscriber only incurs airtime charges for
     outgoing calls, while receiving unlimited incoming calls free of
     charge. From the subscriber's point of view, use of CPP makes
     mobile phone service cheaper and more affordable, particularly in
     the case of low-income and low-usage customers.[^643] For this
     reason, CPP is widely regarded as being more conducive to the
     successful promotion of prepaid offerings than MPP.[^644] As noted
     in the *Sixth Report* and *Seventh Report*[^645] the rapid growth
     of prepaid subscribership has been a major driver of mobile
     subscriber growth in most European and some Asian-Pacific markets,
     with prepaid subscribers accounting for a considerably larger share
     of the total mobile subscriber base in many CPP markets than in the
     United States.[^646]

206. In addition to stimulating subscriber growth on the demand side,
     use of CPP may stimulate the supply of mobile phone service by
     strengthening the mobile operator's financial interest in acquiring
     subscribers, particularly prepaid and other low-usage customers who
     don't want to spend much on mobile phone service. The supply-side
     stimulation effect of CPP is the result of the impact of CPP on
     mobile termination rates.

207. Termination rates are the prices that fixed and mobile operators
     charge the operator of the network on which a call originates to
     terminate traffic on their own networks. Despite recent declines
     induced by pressure from European regulators to bring these rates
     more closely into line with costs, mobile termination rates in
     Western Europe remain high, as do the profit margins on mobile
     termination. Recently, fixed-to-mobile termination rates in Western
     Europe have averaged about €0.16 (slightly more than \$0.16) per
     minute, while mobile-to-fixed termination rates are comparatively
     low.[^647] By contrast, mobile termination rates in the United
     States are comparatively negligible at \$0.005 per minute,[^648]
     about the same as the average rates for terminating traffic on
     fixed networks. Mobile termination rates in South Korea are much
     lower than European levels, though still somewhat higher than the
     U.S. average, at about €0.039 per minute.[^649]

208. As explained in the *Seventh Report*,[^650] a widely accepted
     explanation of why mobile termination rates are high in Europe and
     other CPP markets is that CPP confers a form of market power on
     mobile operators with regard to the setting of mobile termination
     charges. Since European mobile subscribers only pay for the calls
     they make, competition among mobile operators to attract and retain
     customers exerts downward pressure on the price of outgoing mobile
     calls but not on mobile termination charges, which are absorbed by
     callers who have little choice but to terminate their calls on the
     mobile network chosen by the mobile subscriber. In contrast, U.S.
     regulatory rules on inter-carrier compensation have kept mobile
     termination charges low, and because U.S. mobile subscribers pay to
     make and receive calls, competition among mobile operators acts to
     constrain the prices of both incoming and outgoing calls.

209. Depending on the operator and the market, termination charges can
     amount to as much as 15 to 35 percent of a European mobile
     operator's revenues.[^651] As discussed in the *Seventh
     Report*,[^652] high mobile termination revenues are another reason,
     apart from differences in the competitive environment, that revenue
     per minute is significantly higher in Western Europe and most other
     CPP markets than in the United States.[^653] Mobile termination
     revenues may stimulate mobile subscriber growth from the supply
     side by helping mobile carriers recover the costs of customer
     acquisition and billing over the lower volumes of sales generated
     by small users. Even if subscribers rarely use their mobile phones
     to make calls, the termination revenues carriers receive on
     incoming calls under CPP may offset acquisition and billing
     expenses by enough to make it worthwhile for mobile carriers to
     compete for the business of such low-volume users.

210. In effect, high termination rates on fixed-to-mobile calls have
     served to promote the development of the mobile telephone industry
     in Europe by directing subsidies from established fixed-line
     services to mobile services.[^654]

211. By stimulating mobile subscriber growth and driving up mobile
     penetration, use of CPP can also affect average mobile usage. For
     example, low MOUs in Europe and other CPP markets are partly
     attributable to the impact of CPP in enabling operators to tap into
     the prepaid market. As noted in the *Sixth Report*,[^655] the
     relatively large share of prepaid subscribers in the European
     mobile subscriber base pulls down measures of MOUs because on
     average European prepaid subscribers use their phones much less
     than postpaid customers. Moreover, because use of CPP also makes
     postpaid offerings more affordable to low-usage customers, even the
     postpaid market in CPP countries appears to be characterized by
     lower average usage than the U.S. market. In Japan and South Korea,
     for example, prepaid subscribers are a tiny fraction of the total
     mobile subscriber base.[^656] Nevertheless, while MOUs in Japan and
     South Korea are higher than the European average, they are still
     lower than the U.S. figure.[^657]

212. There is another, more direct way that use of CPP or MPP can
     influence MOUs, and that is through their impact on incentives to
     use mobile phones.[^658] In theory, MPP creates an incentive for
     wireless subscribers to switch off their mobile phones when not
     placing calls to avoid being charged for incoming calls, and for
     the same reason it also discourages them from giving out their
     mobile phone number. In contrast, CPP theoretically has the
     potential to stimulate mobile usage by increasing the accessibility
     of mobile subscribers to incoming calls, and also by allowing
     mobile subscribers to devote their entire wireless budget to
     outgoing calls.

213. In practice, U.S. mobile operators have managed to counter the
     potentially adverse incentive effects of MPP by introducing bucket
     plans to stimulate usage.[^659] As noted above, progressive
     increases in the size of mobile buckets have been a major driver of
     average mobile usage in the United States. Bucket plans may
     increase the accessibility of mobile subscribers to their friends
     and family in an environment in which they pay for both incoming
     and outgoing calls.[^660] At the same time, high mobile termination
     rates in Europe and other CPP environments may discourage people
     from calling mobile subscribers by increasing the cost of placing
     calls to mobile phones.

#### Mobile Data Developments

214. Mobile telephone carriers in other countries continued to offer
     mobile data services over next generation networks during the past
     year. As mentioned in the *Seventh Report*, NTT DoCoMo launched
     service, which the company calls FOMA (Freedom of Multimedia
     Access), over its WCDMA network in Japan in October 2001 and had
     approximately 105,000 FOMA subscribers as of April 2002.[^661] As
     of March 2003, the number of FOMA subscribers had jumped to
     330,000.[^662] On the other hand, the CDMA carrier in Japan, KDDI,
     had 5.3 million subscribers to its 1xRTT-based services as of
     February 2003.[^663] Data services offered over next generation
     CDMA networks continue to be popular with consumers in South Korea.
     An estimated 47 percent of South Korea's mobile telephone
     subscriber base used services offered over 1xRTT or 1xEV-DO
     networks as of the end of 2002, up from 12 percent at the end of
     2001.[^664]

215. In Europe, Hutchison 3G began offering WCDMA service in Italy and
     the UK during the past year, and the company reported it had 50,000
     subscribers in Italy and 10,000 in the UK as of March 2003.[^665]
     During 2002, many European operators delayed or suspended their
     planned WCDMA deployments; as of February 2003, many were not
     planning to launch WCDMA service until the second half of 2003 or
     2004.[^666] Compared to the United States, mobile data ARPU is
     significantly higher in Europe. An estimated 10 to 20 percent of
     European mobile carriers' total ARPU is derived from data services,
     versus just under one percent in the United States.[^667] This
     development may be the result of a variety of factors, such as
     differences in consumer demand for mobile data products, in
     wireline Internet penetration rates, in the number of competing
     carriers, and in network technology standards. SMS continues to be
     the most frequently used mobile data service in Europe and
     constitutes the bulk of data ARPU; however, other data services are
     gaining in popularity.[^668] According to one estimate, mobile
     users in the UK downloaded 524 million web pages to their handsets
     in January 2003, up 25 percent from December 2002.[^669] Recent
     figures also show that, for several European carriers, sales of
     camera phones, which enable customers to use MMS, were strong
     during the fourth quarter of 2002.[^670]

# CONCLUSION

216. During 2002, the CMRS industry experienced another year of growth,
     demonstrating the continuing demand for and reliance upon mobile
     services. As of December 2002, we estimate there were approximately
     141.8 million mobile telephone subscribers, which translates into a
     nationwide penetration rate of roughly 49 percent.[^671] During
     2002, MOUs increased an estimated 12 percent, while the average
     cost of monthly service in 25 major markets fell 2.9 percent and
     the Cellular CPI declined 1.0 percent.[^672]

217. Several metrics included in the report support our conclusion that
     the CMRS marketplace is effectively competitive. Mobile telephony
     providers continued to build out their networks and expand service
     availability during 2002.[^673] To date, 270 million people, or 95
     percent of the total U.S. population, have three or more different
     operators offering mobile telephone service in the counties in
     which they live. Over 236 million people, or 83 percent of the U.S.
     population, live in counties with five or more mobile telephone
     operators competing to offer service. The average price of mobile
     telephone service continued to decline during 2002, and more than
     30 percent of wireless customers switched providers.[^674]
     Moreover, evidence from industry analysts and marketing campaigns
     indicates that carriers have responded to consumer demands for
     improved service quality and that the majority of consumers are
     satisfied with their mobile telephone service.[^675]

218. In addition, while relatively few wireless customers have "cut the
     cord" in the sense of canceling their subscription to wireline
     telephone service, there is growing evidence that consumers are
     substituting wireless service for traditional wireline
     communications.[^676] One analyst estimates that wireless has now
     displaced about 30 percent of total wireline minutes.[^677]

219. The multitude of mobile data services, service providers, pricing
     plans, and devices available to consumers provides evidence that
     competition for the provision of mobile data products is developing
     successfully. One analyst estimates there were 11.9 million mobile
     telephone subscribers who used some type of mobile data service at
     the end of 2002, up from 7.6 million at the end of 2001. The
     estimated number of data-only mobile users grew from 1.1 million at
     the end 2001 to 2.3 million at the end of 2002.[^678] Furthermore,
     several mobile telephone operators have deployed GPRS, 1xRTT, or
     1xEV-DO networks that allow them to offer mobile Internet access
     services for mobile telephone handsets, PDAs, and/or laptops at
     speeds generally ranging from 30 to 70 kbps.[^679] As of March
     2003, these networks were available in at least some portion of
     U.S. counties covering approximately 265 million people.[^680]
     Furthermore, mobile data providers offer their customers a variety
     of services, both those focused on consumer entertainment and
     others aimed at maintaining a constant yet remote connection to
     work and office life.[^681] One of the most popular mobile data
     services has been text messaging, which approximately 20 percent of
     all mobile telephone subscribers used during the fourth quarter of
     2002.[^682]

220. Using the various data sources and metrics discussed above, we have
     met our statutory requirement to analyze the competitive market
     conditions with respect to commercial mobile services[^683] and
     conclude that effective competition exists in the CMRS marketplace.
     As mentioned above, the Commission will be issuing another Notice
     of Inquiry seeking additional and updated data from the public on
     the state of CMRS competition, particularly in rural areas and on a
     sub-national level, in preparation for its ninth annual report.
     With this next Notice, we hope to build on the information employed
     in this year's report and to obtain a wider range of facts and
     opinions from the public comments in order to assist in our
     analysis. We also plan to explore other avenues for data
     collection, such as contract research, for the next report.[^684]
     In addition, for the next report, we will continue efforts to
     improve our approaches to collecting and evaluating the various
     types of data and information that are available in order to assess
     the status of competition in the CMRS industry. In particular, we
     plan to seek comment on the interrelationship among dimensions of
     industry structure, indicators of operator conduct, and other
     relevant measures of market conditions.

# ADMINISTRATIVE MATTERS

221. This Eighth Report is issued pursuant to authority contained in
     Section 332 (c)(1)(C) of the Communications Act of 1934, as
     amended, 47 U.S.C. § 322 (c)(1)(C).

222. It is ORDERED that the Secretary shall send copies of this Report
     to the appropriate committees and subcommittees of the United
     States House of Representatives and the United States Senate.

223. It is FURTHER ORDERED that the proceeding in the WT Docket No.
     02-379 IS TERMINATED.

FEDERAL COMMUNICATIONS COMMISSION

> Marlene H. Dortch
>
> Secretary

APPENDIX A:

FIXED WIRELESS VOICE AND DATA SERVICES

# Introduction and Overview

In this section, the Commission reviews the current state of the fixed
wireless industry.[^685] The first part of Appendix A provides an
overview of fixed wireless systems. The second part discusses recent
developments in the industry, including the current level of service
deployment and significant policy changes related to spectrum bands used
for fixed wireless service.

Fixed wireless operators have used several spectrum bands, including
Multipoint Distribution Service ("MDS"),[^686] Wireless Communications
Service ("WCS"),[^687] unlicensed spectrum bands, 24 GHz, Local
Multipoint Distribution Service ("LMDS"), and 39 GHz, to offer
point-to-point, high-speed data services. In addition, some licensees of
spectrum bands traditionally used for CMRS have also used that spectrum
to provide fixed wireless services.[^688]

This report groups fixed wireless operators into two major categories:
lowerband providers (800 MHz to 5.8 GHz) and upperband providers (24 GHz
to 39 GHz) due to the similar technical characteristics of the bands
within each category.[^689]

Operators using lowerband spectrum are able to serve a wider geographic
area with a single transmitter than operators using upperband spectrum
(see Figure 1). Lowerband systems generally have a service radius of
five to 35 miles from a central hub, depending on the particular
spectrum band, the power of the transmitter, and the terrain. Upperband
systems, on the other hand, face significant losses of signal strength
due to atmospheric conditions, most notably precipitation (*i.e.*, rain,
snow, and fog).[^690] Therefore, the range of individual transmitters in
the upperbands is approximately two to five miles.

# Recent Developments

## Upperband Operations

As discussed in the *Sixth and Seventh Reports*, all of the major
upperband fixed wireless providers -- Winstar Communications, Inc.
("Winstar"), Teligent, Inc. ("Teligent"), Advanced Radio Telecom
("ART"), and XO Communications, Inc. ("XO") -- filed for bankruptcy
during 2001 and 2002.[^691] In recent months, many have emerged from
bankruptcy with plans to continue providing fixed wireless services but
on a more limited basis. Teligent, which filed for bankruptcy in May
2001, completed its reorganization and exited bankruptcy in September
2002 with a business plan focused on selling transport capacity to other
telecommunications companies wholesale and to multi-location businesses
as well as offering dedicated Internet access to large business
customers.[^692] Teligent has retained its 24 GHz licenses in 74
markets.[^693]

Winstar filed for bankruptcy protection in April 2001 and was acquired
by IDT Corportation ("IDT") in December 2001. IDT holds the former
Winstar's 28 GHz and 39 GHz licenses and has continued to offer many of
the fixed wireless services that Winstar offered before it entered
bankruptcy, including local and long distance telephone service,
high-speed Internet and data services, and Frame Relay Services.[^694]
IDT's Winstar subsidiary currently operates in 22 markets and generated
\$79.6 million in revenue between December 2001 and July 2002.[^695] IDT
changed the name of its Winstar subsidiary to IDT Solutions in March
2003.[^696]

XO entered bankruptcy in June 2002 and completed its reorganization in
January 2003.[^697] The company is primarily a wireline CLEC but also
holds LMDS and 39 GHz licenses covering 95 percent of the population of
the 30 largest U.S. cities, and was able to continue funding its
operations during its bankruptcy proceedings.[^698] XO uses its spectrum
to deploy fixed wireless connections for business customers to whom it
is not cost-efficient to construct a fiber optic connection.[^699]

First Avenue Networks, which purchased Advanced Radio Telecom's ("ART")
39 GHz licenses during ART's 2001 bankruptcy proceedings, now offers
fixed wireless access on a wholesale basis to other carriers.[^700]

## Lowerband Operations

As discussed in the *Seventh Report*, AT&T Wireless and Sprint both
announced in the fall of 2001 that they were terminating their fixed
wireless operations.[^701] And in July 2002, just prior to its
bankruptcy filing, WorldCom Inc. ("WorldCom"), announced that it planned
to discontinue or divest its fixed wireless operations.[^702] The
company announced in May 2003 that BellSouth plans to purchase
WorldCom's fixed wireless assets, including its licenses, for \$65
million.[^703] WorldCom had been offering high-speed, fixed wireless
Internet access service to business customers in 13 U.S. markets using
both MDS and WCS spectrum.[^704]

Despite the reorganizations and service terminations by all of the major
fixed wireless providers,

several smaller fixed wireless operators, including hundreds of
operators using unlicensed spectrum,[^705] continue to provide
high-speed Internet access service, generally in less densely populated
markets across the country and often in a only a few markets apiece.
Most of the companies that use unlicensed spectrum to offer Internet
access are local and regional Internet service providers, also referred
to as wireless ISPs, that offer the service in an average of three
markets apiece.[^706] Many of these carriers are targeting business
customers, while others serve both businesses and residences. Many fixed
wireless operators use lowerband spectrum to offer high-speed Internet
access in rural and underserved areas. For example, Canyon Country
Communications offers Internet access in Page, AZ; Planet Connect offers
fixed wireless service in Bristol, Seymour, Newport, and Greeneville,
TN; and DATACentric sells the service in Lufkin, Conroe, and
Bryan-College Station, TX.[^707]

As mentioned in the *Sixth Report*, the Commission tracks the rollout of
fixed wireless services by providers using lowerband spectrum on a
county-by-county basis. Based on its analysis, the Commission estimates
that there are at least 212 different lowerband operators providing
fixed wireless services in 457 different counties.[^708] These counties
contain 106 million people, or 37.3 percent of the U.S.
population.[^709] This analysis is based on publicly-available
information, such as news articles and operators' press releases, SEC
filings, and web sites. There are several caveats to note when
considering this data. First, in order to be considered as "covering" a
county, an operator need only be offering service in a portion of that
county. Second, the POPs and square mile figures in this analysis
include all of the POPs and all of the square miles in a county
considered to have coverage. Third, all population figures are based on
the 2000 Census. Fourth, because some lowerband carriers serve small and
remote locations and because unlicensed operators provide service
without a license from the Commission, it is difficult to assess
precisely who is operating where. Therefore, the analysis may not
include certain companies that do not make the information on their
fixed wireless offerings easily obtainable or publicly available.

## Spectrum Allocation Proceedings

As mentioned in the *Seventh Report*, the Commission decided to permit
mobile use of the 2500-2690 MHz band by MDS licensees in September
2001.[^710] In March 2003, the Commission initiated a proceeding to
facilitate the provision of fixed and mobile broadband access, as well
as educational services, in the 2500-2690 MHz bands. With this action,
the Commission began a comprehensive examination of the rules and
policies governing these bands in order to provide greater opportunities
for increased access to the spectrum and encourage efficient use of the
spectrum.[^711]

In addition, in November 2002, the Commission announced the reallocation
of 2150-2155 MHz portion of the 2150-2160/62 MDS band for fixed and
mobile services, including new, advanced wireless services that will be
offered over next generation networks.[^712] MDS licensees currently use
this band primarily for the upstream links in two-way, fixed wireless
broadband services.[^713]

APPENDIX B:

U.S. INVESTMENT IN FOREIGN MOBILE OPERATORS

The divestiture of stakes in foreign mobile telephone companies by U.S.
mobile operators, a trend identified in the *Sixth Report*[^714] and the
*Seventh Report*,[^715] continued in the second half of 2002 and in
2003.

SBC Communications shed two of its foreign mobile holdings in the past
year. In November 2002, Canadian telecom conglomerate BCE, Inc. notified
SBC Communications of its intention to exercise its right to buy SBC's
remaining 20 percent stake in BCE mobile subsidiary Bell Canada for
\$3.2 billion.[^716] SBC completed the sale of its interest in Bell
Canada to BCE in December 2002.[^717] The following January, SBC
finalized the sale of its 15 percent equity stake in France's Cegetel
Groupe SA to London-based wireless carrier Vodafone Group plc for
approximately \$2.3 billion in cash.[^718] Cegetel is a joint venture
that owns 80 percent of Societe Francaise de Radiotelephone, the
second-largest wireless provider in France. SBC Communications
subsequently reported that it realized a gain of \$1.6 billion from the
Cegetel sale.[^719]

Western Wireless International Corporation ("WWI"), a subsidiary of
Western Wireless, also divested two of its foreign mobile holdings in
the past year. WWI announced the closing of the sale of its 57.3 percent
interest in Icelandic wireless operator Tal hf to Islandssimi hf in
November 2002.[^720] WWI's net proceeds from the transaction were
expected to total approximately \$28.9 million. In June 2003, WWI
announced its agreement to sell its 19 percent interest in Croation
wireless operator VIPnet d.o.o. to Mobilcom Austria Aktiengesellschaft &
CO KG, the majority owner of VIPnet.[^721] WWI expected that proceeds
from the sale of its interest and related shareholder debt would be \$70
million.

In June 2003, Atlantic West, a 50/50 joint venture between Verizon
Communications and AT&T Wireless, succeeded in its longstanding effort
to sell the U.S. operators' combined 49 percent stake in Czech mobile
operator Eurotel Praha to Czech telephone operator Cesky Telecom, the
owner of the remaining 51 percent stake in Eurotel. As detailed in the
*Seventh Report*,[^722] Atlantic West had reached a preliminary
agreement on the sale with Cesky Telecom for a price of \$1.5 billion in
July 2001, but Cesky Telecom subsequently cut the offered price to \$1.1
billion and negotiations were ultimately abandoned in November 2001
after the parties failed to agree on the purchase price and Atlantic
West rejected Cesky Telecom's latest offer. Negotiations later resumed
and the parties finally reached an agreement this past year. On June 5,
2003, the Board of Directors of Cesky Telecom approved the terms of a
preliminary agreement with Atlantic West to purchase the remaining 49
percent stake that it does not already own in its mobile telephony unit
Eurotel Praha.[^723] The parties agreed on a price of \$1.05 billion to
be paid in cash. In a related move, Eurotel owners declared that a
dividend of \$415 million will be paid prior to the closing of the
transaction. The dividend payment raises the value of the sale to an
estimated \$1.25 billion.[^724]

Verizon announced on June 13, 2003 that it plans to sell its 39.4
percent equity stake in Mexican wireless carrier Grupo Iusacell to Movil
Access, a Mexican company and wireless telecom investor, following
approval of the latter's offer by the Mexican securities
commission.[^725] Movil Access offered to acquire 100 percent of Grupo
Iusacell's stock for \$10 million, plus the assumption of \$814 million
in Iusacell debt.[^726] Vodafone Americas, which owns another 35 percent
equity stake in Grupo Iusacell, is also reported to be planning to
accept the offer. Bell Atlantic Corporation, which later merged with GTE
Corporation to form Verizon, paid \$1 billion for its Iusacell stake in
1993, while Vodafone bought its share in Iusacell for \$973.4 million in
2001[^727]

APPENDIX C:

LOWER 700 MHz AUCTION #44 RESULTS

  -------------------------------------- ---------- -------------- -------------
  **Bidder Name**                        **Total    **Net High     **POPs**
                                         High       Bids (1)**     
                                         Bids**                    

  Aloha Partners, L.P.                   77         \$28,793,380   117,383,349

  Vulcan Spectrum LLC                    24         \$15,075,000   7,236,558

  Cavalier Group, LLC                    7          \$6,472,050    24,617,122

  Union Telephone Company                16         \$4,452,000    2,670,974

  LIN Television Corporation             18         \$4,293,000    7,475,819

  DataCom Wireless, L.L.C.               3          \$3,303,950    11,053,041

  Harbor Wireless, LLC                   14         \$2,836,600    8,487,727

  MilkyWay Broadband, LLC                48         \$2,757,105    10,405,189

  Redwood County Telephone Company       17         \$1,984,500    6,552,179

  David M. Gates                         7          \$1,742,000    3,871,000

  Whidbey Telephone Company              3          \$1,212,100    675,464

  Lynch 3G Communications Corporation    8          \$1,118,000    1,722,987

  Capitol Broadcasting Company, Inc.     12         \$888,000      2,963,816

  Corr Wireless Communications, LLC      9          \$762,000      2,643,203

  PGTV, Inc.                             1          \$740,350      2,097,447

  East Kentucky Network, LLC             9          \$643,000      1,856,852

  Bluegrass Cellular, Inc.               9          \$639,000      1,886,924

  Ronan Telephone Company                3          \$618,000      374,399

  KanOkla Telephone Association, Inc.    4          \$475,150      479,533

  Lexcom Telephone Company               1          \$453,000      914,232

  First Cellular of Southern Illinois    7          \$423,000      1,405,713

  Chariton Valley Communication          6          \$397,800      605,695
  Corporation, Inc.                                                

  Cameron Communications Corporation     6          \$340,000      1,076,431

  Banks Broadcasting, Inc.               2          \$326,400      468,783

  Agri-Valley Communications, Inc.       7          \$320,450      1,253,761

  Blue Valley Tele-Communications, Inc.  2          \$293,250      190,348

  Kennebec Telephone Company, Inc.       11         \$283,400      696,004

  Public Service Wireless Services, Inc. 4          \$250,000      832,638

  SJI, Inc.                              4          \$249,000      828,045

  Lackawaxen Long Distance Company, Inc. 4          \$247,000      826,262

  Citizens Telephone Cooperative         4          \$246,000      723,276

  Nemont Communications, Inc.            2          \$243,950      136,385

  CT Communications, Inc.                3          \$238,000      789,808

  PVT Networks, Inc.                     1          \$231,000      226,366

  Peoples Telephone Cooperative, Inc.    3          \$230,350      904,559

  The Ponderosa Telephone Co.            1          \$219,300      303,190

  Mobius Communications Company          4          \$197,250      282,744

  Grand River Communications, Inc.       8          \$184,000      501,900

  Kaplan Telephone Company, Inc.         2          \$181,500      581,272

  Craw-Kan Telephone Cooperative, Inc.   5          \$172,550      650,983

  Central Wisconsin Communications, Inc. 2          \$167,450      384,203

  Plateau Telecommunications, Inc.       2          \$166,000      370,422

  XIT Telecommunications & Technology,   4          \$159,800      555,697
  Ltd.                                                             

  Dickey Rural Services, Inc.            3          \$143,650      351,093

  Eastern Colorado Wireless Partnership  4          \$143,100      259,898

  Star Wireless LLC                      4          \$137,150      600,171

  Waller, Inc.                           3          \$121,500      518,389

  McElroy Electronics Corporation        2          \$118,300      604,893

  The Tri-county Telephone Association,  2          \$117,750      184,012
  Inc.                                                             

  3G COMM, LLC                           1          \$116,350      315,121

  Glenwood Telephone Membership,         3          \$115,500      253,961
  Corporation                                                      

  Missouri RSA No. 7 L.P. dba            1          \$107,000      157,047
  Mid-Missouri Cellular                                            

  McBride Spectrum Partners I, LLC       4          \$102,505      526,323

  Triangle Communication System, Inc.    3          \$102,000      126,308

  ComSouth Tellular, Inc.                2          \$96,750       432,349

  San Carlos Apache Telecommunications   2          \$96,000       318,457
  Utility, Inc.                                                    

  Allcom Communications, Inc.            1          \$90,000       210,908

  FTC Management Group, Inc.             2          \$90,000       300,683

  Rainbow Telephone Cooperative          3          \$87,750       386,017
  Association, Inc.                                                

  Scott Reiter                           1          \$84,500       433,785

  MTC North, Inc.                        1          \$84,000       374,182

  Northeast Nebraska Telephone Company   2          \$84,000       256,395

  GTC Wireless, Inc.                     2          \$82,500       367,183

  Holland Wireless, L.L.C.               1          \$80,750       316,633

  Poka Lambro Telecommunications, Ltd.   3          \$76,500       256,348

  Swayzee Telephone Company              2          \$73,500       324,177

  Cable & Communications Corporation     4          \$73,015       189,871

  Chequamegon Telephone Cooperative,     2          \$72,000       321,299
  Inc.                                                             

  WSS, L.L.C.                            2          \$69,000       305,276

  North Dakota Network Co.               1          \$67,000       61,933

  Kingdom Telephone Company              1          \$66,000       92,590

  CTC Telcom, Inc.                       2          \$61,500       239,922

  Guadalupe Valley Communications        2          \$61,000       204,342
  Systems, L.P.                                                    

  Star Telephone Company, Inc.           1          \$61,000       180,185

  Webster-Calhoun Cooperative Telephone  2          \$54,750       244,541
  Association                                                      

  BPS Telephone Company                  1          \$50,150       197,439

  BEK Communications Cooperative         2          \$41,250       136,048

  Beulahland Communications, Inc.        1          \$38,350       123,051

  Tri-County Communications, Inc.        1          \$36,000       110,131

  Guam Cellular and Paging               1          \$34,000       133,152

  Advantage Cellular Systems, Inc.       1          \$33,750       150,599

  McDonald County Telephone Company      1          \$33,000       93,482

  Farmers Cellular Telephone, Inc.       1          \$31,450       121,990

  DYCOM Holding, Inc.                    1          \$29,750       115,644

  Alpine Communications, L.C.            1          \$28,900       114,478

  Northern New Mexico Telecom, Inc.      1          \$27,300       22,300

  Arctic Slope Telecommunications and    1          \$26,250       118,282
  Cellular, Inc.                                                   

  Mark Twain Communications Company      1          \$24,000       55,897

  United Telephone Association, Inc.     3          \$23,850       104,466

  Yell County Telephone Company, Inc.    1          \$23,250       104,770

  C&W Enterprises, Inc.                  1          \$22,500       98,458

  City of Ketchikan dba Ketchikan Public 1          \$21,000       68,989
  Utilities                                                        

  Pioneer Telephone Association, Inc.    1          \$20,400       80,134

  West Wisconsin Telcom Cooperative,     1          \$20,250       89,365
  Inc.                                                             

  Montana Spectrum Alliance              1          \$19,550       77,691

  H&B Communications, Inc.               1          \$18,750       82,345

  Farmers Telephone Company, Inc.        1          \$18,000       59,620

  Nortex Communications Company          1          \$18,000       80,087

  S&T Communications Inc                 2          \$17,775       49,224

  Great Plains Communications, Inc       1          \$17,000       35,875

  Panhandle Telecommunication Systems,   1          \$7,700        25,743
  Inc.                                                             

  Blanca Telephone Company               1          \$7,500        27,520
  -------------------------------------- ---------- -------------- -------------

Source: Federal Communications Commission

Notes: (1) As of the close of the auction.

LOWER 700 MHz AUCTION #49 RESULTS

  -------------------------------------- ---------- -------------- -------------
  **Bidder Name**                        **Total    **Net High     **POPs**
                                         High       Bids (1)**     
                                         Bids**                    

  QUALCOMM Incorporated                  5          \$38,036,000   237,029,635

  Aloha Partners II, L.P.                89         \$5,816,590    22,873,669

  Cavalier Group, LLC                    44         \$2,143,050    11,379,618

  LIN Television Corporation             13         \$1,980,000    3,374,467

  Vermont Telephone Company, Inc.        5          \$1,628,600    1,577,173

  D&E Investments, Inc.                  5          \$828,000      1,229,242

  Whidbey Telephone Company              7          \$652,800      1,244,671

  Lynch 3G Comminications Corporation    4          \$620,000      1,053,479

  Lima Directional Paging Co., Inc.      3          \$513,750      587,652

  Banks Broadcasting, Inc.               4          \$513,000      709,789

  Valley Telephone Cooperative, Inc.     3          \$451,350      656,014

  Viacel Corporation                     2          \$403,910      760,069

  AGRI-VALLEY COMMUNICATIONS, INC.       2          \$341,700      678,656

  United Telephone                       10         \$341,250      NA

  BPS Telephone Company                  5          \$300,050      675,436

  Peoples Telephone Cooperative, Inc.    3          \$294,100      491,572

  KM Communications, Inc.                3          \$237,150      286,664

  Adams Telcom, Inc.                     2          \$201,750      415,537

  Westelcom Network, Inc.                2          \$192,000      480,944

  Corr Wireless Communications, LLC      3          \$189,550      640,315

  Delta Media Corporation                4          \$161,200      448,811

  DataCom Wireless, L.L.C.               4          \$139,100      876,163

  WCTA Wireless Inc.                     1          \$133,450      106,046

  David M. Gates                         7          \$123,760      1,240,017

  Pioneer Telephone Cooperative, Inc.    3          \$122,000      281,107

  CAPITOL BROADCASTING COMPANY, INC.     4          \$101,000      663,594

  Grand River Communications, Inc.       4          \$86,700       532,659

  Wireless Network Management            2          \$85,500       187,384

  Kennebec Telephone Company             2          \$57,200       185,826

  Red River Rural Telephone Association, 1          \$43,350       214,745
  Inc.                                                             

  McBride Spectrum Partners II, LLC      1          \$25,350       103,833

  Bluegrass Cellular, Inc.               1          \$25,000       91,545

  Acumen Technologies, Inc.              1          \$11,050       142,982

  RED LAKE BAND OF CHIPPEWA INDIANS      1          \$9,800        65,227

  American Samoa Telecommunications      1          \$6,900        57,291
  Authority                                                        
  -------------------------------------- ---------- -------------- -------------

Source: Federal Communications Commission

Notes: (1) As of the close of the auction.

APPENDIX D:

MOBILE TELEPHONY

**[Table of Contents]{.underline}**

Table 1: CTIA's Semi-Annual Mobile Telephone Industry Survey D-2

Table 2: FCC's Semi-Annual Local Telephone Competition Survey D-3

Table 3: Economic Area Penetration Rates D-4

Table 4: Top 25 Mobile Telephone Operators by Subscribers D-8

Table 5: Estimated Mobile Telephone Rollouts by Number of Launches by
County D-9

Table 6: County Quartiles with Estimated Rollout by at least 3 Mobile
Telephone Providers D-9

Table 7: Mobile Telephone Digital Coverage D-10

Table 8: Change in CPI D-10

Table 9: Average Revenue Per Minute D-11

Table 10: Market Entry Over Time D-11

Table 11: Foreign Holdings of U.S. Mobile Telephone Operators D-12

Table 12: Mobile Performance in Selected Countries D-14

Table 1: CTIA's Semi-Annual Mobile Telephone Industry Survey

  ------ ------------- ------------ -------------- ------------- --------- ----------- --------------- ---------
  Date   Estimated     Year End     Total          Roamer        Cell      Employees   Cumulative      Average
         Subscribers   over Year    Six-Month      Services      Sites                 Capital         Local
                       End          Service        Revenues                            Investment      Monthly
                       Subscriber   Revenues                                           (000s)          Bill
                       Increase     (000s)                                                             

  Jan 85 91,600                     \$178,085                    346       1,404       \$354,760       

  June   203,600                    \$176,231                    599       1,697       \$588,751       
  85                                                                                                   

  Dec 85 340,213       248,613      \$306,197                    913       2,727       \$911,167       

  June   500,000                    \$360,585                    1,194     3,556       \$1,140,163     
  86                                                                                                   

  Dec 86 681,825       341,612      \$462,467                    1,531     4,334       \$1,436,753     

  June   883,778                    \$479,514                    1,732     5,656       \$1,724,348     
  87                                                                                                   

  Dec 87 1,230,855     549,030      \$672,005                    2,305     7,147       \$2,234,635     \$96.83

  June   1,608,697                  \$886,075                    2,789     9,154       \$2,589,589     \$95.00
  88                                                                                                   

  Dec 88 2,069,441     838,586      \$1,073,473    \$89,331      3,209     11,400      \$3,274,105     \$98.02

  June   2,691,793                  \$1,406,463    \$121,368     3,577     13,719      \$3,675,473     \$85.52
  89                                                                                                   

  Dec 89 3,508,944     1,439,503    \$1,934,132    \$173,199     4,169     15,927      \$4,480,141     \$83.94

  June   4,368,686                  \$2,126,362    \$192,350     4,768     18,973      \$5,211,765     \$83.94
  90                                                                                                   

  Dec 90 5,283,055     1,774,111    \$2,422,458    \$263,660     5,616     21,382      \$6,281,596     \$80.90

  June   6,380,053                  \$2,653,505    \$302,329     6,685     25,545      \$7,429,739     \$74.56
  91                                                                                                   

  Dec 91 7,557,148     2,274,093    \$3,055,017    \$401,325     7,847     26,327      \$8,671,544     \$72.74

  June   8,892,535                  \$3,633,285    \$436,725     8,901     30,595      \$9,276,139     \$68.51
  92                                                                                                   

  Dec 92 11,032,753    3,475,605    \$4,189,441    \$537,146     10,307    34,348      \$11,262,070    \$68.68

  June   13,067,318                 \$4,819,259    \$587,347     11,551    36,501      \$12,775,967    \$67.31
  93                                                                                                   

  Dec 93 16,009,461    4,976,708    \$6,072,906    \$774,266     12,805    39,775      \$13,946,406    \$61.48

  June   19,283,306                 \$6,519,030    \$778,116     14,740    45,606      \$16,107,920    \$58.65
  94                                                                                                   

  Dec 94 24,134,421    8,124,960    \$7,710,890    \$1,052,666   17,920    53,902      \$18,938,677    \$56.21

  June   28,154,415                 \$8,740,352    \$1,120,337   19,833    60,624      \$21,709,286    \$52.45
  95                                                                                                   

  Dec 95 33,785,661    9,651,240    \$10,331,614   \$1,422,233   22,663    68,165      \$24,080,466    \$51.00

  June   38,195,466                 \$11,194,247   \$1,314,943   24,802    73,365      \$26,707,046    \$48.84
  96                                                                                                   

  Dec 96 44,042,992    10,257,331   \$12,440,724   \$1,465,992   30,045    84,161      \$32,573,522    \$47.70

  June   48,705,553                 \$13,134,551   \$1,392,440   38,650    97,039      \$37,454,294    \$43.86
  97                                                                                                   

  Dec 97 55,312,293    11,269,301   \$14,351,082   \$1,581,765   51,600    109,387     \$46,057,911    \$42.78

  June   60,831,431                 \$15,286,660   \$1,584,891   57,674    113,111     \$50,178,812    \$39.88
  98                                                                                                   

  Dec 98 69,209,321    13,897,028   \$17,846,515   \$1,915,578   65,887    134,754     \$60,542,774    \$39.43

  June   76,284,753                 \$19,368,304   \$1,922,416   74,157    141,929     \$66,782,827    \$40.24
  99                                                                                                   

  Dec 99 86,047,003    16,837,682   \$20,650,185   \$2,163,001   81,698    155,817     \$71,264,865    \$41.24

  June   97,035,925                 \$24,645,365   \$1,971,625   95,733    159,645     \$76,652,358    \$45.15
  00                                                                                                   

  Dec 00 109,478,031   23,431,028   \$27,820,655   \$1,911,356   104,288   184,449     \$89,624,387    \$45.27

  June   118,397,734                \$30,905,721   \$1,727,058   114,059   186,317     \$99,728,965    \$45.56
  01                                                                                                   

  Dec 01 128,374,512   18,896,481   \$34,110,163   \$2,209,387   127,540   203,580     \$105,030,101   \$47.37

  June   134,561,370                \$36,707,086   \$1,846,267   131,350   186,956     \$118,418,677   \$47.42
  02                                                                                                   

  Dec 02 140,766,842   12,392,330   \$39,801,101   \$2,049,245   139,338   192,410     \$126,922,347   \$48.40
  ------ ------------- ------------ -------------- ------------- --------- ----------- --------------- ---------

Source**:** Cellular Telecommunications and Internet Association,
*Semi-Annual Wireless Industry Survey*
\<http://www.wow-com.com/industry/stats/surveys/\>.

Table 2: FCC's Semi-Annual Local Telephone Competition Survey

![](media/image1.png){width="6.497916666666667in"
height="7.399305555555555in"}

NA -- Not Applicable

\* Data withheld to maintain firm confidentiality.

1/ Carriers with under 10,000 subscribers in a state were not required
to report for that state.

2/ Percentage of mobile wireless subscribers receiving their service
from a mobile wireless reseller.

3/ Subscribers counts for the District of Columbia, Maryland, and
Virginia have been revised for previous periods other than June 2000.

Source: Local Telephone Competition: Status as of December 31, 2002,
Federal Communications Commission, June 2003 (Table 13: Mobile Wireless
Telephone Subscribers).

**Table 3: Economic Area Penetration Rates**

  ----- -------------------------------------------- ------------- ------------ ------------- ---------
  EA    EA Name                                      Subscribers   2000 Census  EA            EA
                                                                                penetration   density
                                                                                rate          

  34    Tampa-St. Petersburg-Clearwater, FL          1,335,363     2,395,997    55.73%        891.0

  10    New York-No. New Jer.-Long Island,           13,607,067    25,712,577   52.92%        890.6
        NY-NJ-CT-PA-MA-VT                                                                     

  12    Philadelphia-Wilmington-Atl. City,           3,857,780     7,309,792    52.78%        778.8
        PA-NJ-DE-MD                                                                           

  161   San Diego, CA                                1,628,114     2,813,833    57.86%        660.5

  64    Chicago-Gary-Kenosha, IL-IN-WI               5,455,054     10,328,854   52.81%        556.5

  55    Cleveland-Akron, OH-PA                       1,983,225     4,692,460    42.26%        427.8

  3     Boston-Worcester-Lawrence-Lowell-Brockton,   4,263,353     7,954,554    53.60%        421.8
        MA-NH-RI-VT                                                                           

  31    Miami-Fort Lauderdale, FL                    3,311,130     5,602,222    59.10%        413.8

  13    Washington-Baltimore, DC-MD-VA-WV-PA         5,003,728     8,403,130    59.55%        402.8

  63    Milwaukee-Racine, WI                         1,056,619     2,255,183    46.85%        366.9

  57    Detroit-Ann Arbor-Flint, MI                  3,794,344     6,963,637    54.49%        364.1

  50    Dayton-Springfield, OH                       451,137       1,133,004    39.82%        318.5

  49    Cincinnati-Hamilton, OH-KY-IN                1,075,343     2,184,860    49.22%        294.1

  11    Harrisburg-Lebanon-Carlisle, PA              498,960       1,125,265    44.34%        292.4

  20    Norfolk-Virginia Beach-Newport News, VA-NC   924,504       1,722,764    53.66%        289.9

  160   Los Angeles-Riverside-Orange County, CA-AZ   9,485,741     18,003,420   52.69%        286.1

  53    Pittsburgh, PA-WV                            1,364,699     2,971,829    45.92%        284.8

  33    Sarasota-Bradenton, FL                       389,839       763,795      51.04%        273.6

  163   San Francisco-Oakland-San Jose, CA           5,126,825     9,111,806    56.27%        271.1

  30    Orlando, FL                                  1,943,099     3,642,540    53.34%        265.8

  40    Atlanta, GA-AL-NC                            3,397,545     5,471,412    62.10%        246.0

  23    Charlotte-Gastonia-Rock Hill, NC-SC          1,071,319     2,031,519    52.73%        240.5

  32    Fort Myers-Cape Coral, FL                    429,957       692,265      62.11%        234.3

  133   McAllen-Edinburg-Mission, TX                 478,031       978,369      48.86%        222.0

  8     Buffalo-Niagara Falls, NY-PA                 583,482       1,507,759    38.70%        212.9

  62    Grand Rapids-Muskegon-Holland, MI            657,141       1,881,991    34.92%        206.8

  170   Seattle-Tacoma-Bremerton, WA                 2,286,128     4,135,291    55.28%        190.4

  51    Columbus, OH                                 974,843       2,349,060    41.50%        190.4

  18    Greensboro-Winston-Salem-High Point, NC-VA   877,273       1,854,853    47.30%        189.1

  19    Raleigh-Durham-Chapel Hill, NC               1,008,819     1,831,510    55.08%        188.4

  164   Sacramento-Yolo, CA                          1,258,188     2,311,567    54.43%        188.1

  172   Honolulu, HI                                 706,712       1,211,537    58.33%        187.2

  65    Elkhart-Goshen, IN-MI                        315,244       936,245      33.67%        185.7

  41    Greenville-Spartanburg-Anderson, SC-NC       631,558       1,248,824    50.57%        183.6

  70    Louisville, KY-IN                            671,230       1,416,914    47.37%        180.9

  83    New Orleans, LA-MS                           881,511       1,725,338    51.09%        171.9

  67    Indianapolis, IN-IL                          1,364,398     3,066,469    44.49%        171.4

  131   Houston-Galveston-Brazoria, TX               3,184,408     5,632,853    56.53%        169.2

  7     Rochester, NY-PA                             466,524       1,493,518    31.24%        167.2

  44    Knoxville, TN                                467,294       983,329      47.52%        165.6

  22    Fayetteville, NC                             258,032       528,224      48.85%        164.6

  56    Toledo, OH                                   575,990       1,294,395    44.50%        163.9

  66    Fort Wayne, IN                               270,422       725,847      37.26%        158.5

  130   Austin-San Marcos, TX                        806,102       1,349,267    59.74%        156.1

  81    Pensacola, FL                                321,837       623,252      51.64%        154.1

  26    Charleston-North Charleston, SC              337,688       587,297      57.50%        149.8

  43    Chattanooga, TN-GA                           320,302       720,375      44.46%        145.3

  45    Johnson City-Kingsport-Bristol, TN-VA        258,641       576,081      44.90%        144.5

  60    Appleton-Oshkosh-Neenah, WI                  163,720       433,250      37.79%        143.6

  82    Biloxi-Gulfport-Pascagoula, MS               181,074       396,754      45.64%        143.5

  84    Baton Rouge, LA-MS                           360,788       739,673      48.78%        140.3

  78    Birmingham, AL                               840,055       1,578,903    53.20%        137.1

  5     Albany-Schenectady-Troy, NY                  477,695       1,171,669    40.77%        134.7

  46    Hickory-Morganton, NC-TN                     199,887       519,208      38.50%        131.9

  42    Asheville, NC                                217,924       444,594      49.02%        128.6

  96    St. Louis, MO-IL                             1,713,867     3,558,651    48.16%        127.0

  24    Columbia, SC                                 470,366       932,115      50.46%        126.0

  52    Wheeling, WV-OH                              98,045        327,645      29.92%        124.5

  15    Richmond-Petersburg, VA                      773,113       1,446,123    53.46%        124.0

  74    Huntsville, AL-TN                            489,343       997,824      49.04%        119.1

  127   Dallas-Fort Worth, TX-AR-OK                  3,939,831     7,645,530    51.53%        119.0

  54    Erie, PA                                     168,550       519,348      32.45%        116.4

  29    Jacksonville, FL-GA                          1,008,013     1,885,190    53.47%        112.5

  14    Salisbury, MD-DE-VA                          133,529       363,970      36.69%        111.2

  102   Davenport-Moline-Rock Island, IA-IL          249,327       558,913      44.61%        108.3

  25    Wilmington, NC-SC                            437,363       878,267      49.80%        107.4

  71    Nashville, TN-KY                             1,173,096     2,444,643    47.99%        105.1

  6     Syracuse, NY-PA                              685,817       1,902,640    36.05%        104.7

  73    Memphis, TN-AR-MS-KY                         869,480       1,882,332    46.19%        103.0

  103   Cedar Rapids, IA                             220,243       384,577      57.27%        101.3

  85    Lafayette, LA                                281,290       601,654      46.75%        100.0

  162   Fresno, CA                                   592,579       1,419,998    41.73%        98.6

  2     Portland, ME                                 318,218       748,817      42.50%        98.6

  17    Roanoke, VA-NC-WV                            372,178       826,284      45.04%        97.8

  158   Phoenix-Mesa, AZ-NM                          1,834,796     3,407,197    53.85%        93.9

  9     State College, PA                            280,918       809,979      34.68%        92.4

  28    Savannah, GA-SC                              321,449       668,214      48.11%        91.9

  101   Peoria-Pekin, IL                             232,899       528,671      44.05%        91.0

  27    Augusta-Aiken, GA-SC                         256,061       604,799      42.34%        89.8

  87    Beaumont-Port Arthur, TX                     213,655       456,637      46.79%        89.2

  99    Kansas City, MO-KS                           1,261,851     2,469,340    51.10%        88.7

  92    Fayetteville-Springdale-Rogers, AR-MO-OK     177,573       405,160      43.83%        88.4

  21    Greenville, NC                               382,332       823,517      46.43%        87.7

  48    Charleston, WV-KY-OH                         404,431       1,199,373    33.72%        85.4

  39    Columbus, GA-AL                              254,726       496,538      51.30%        84.1

  134   San Antonio, TX                              1,013,681     2,141,060    47.34%        83.0

  107   Minneapolis-St. Paul, MN-WI-IA               2,262,258     4,498,286    50.29%        83.0

  47    Lexington, KY-TN-VA-WV                       654,494       1,851,367    35.35%        80.4

  167   Portland-Salem, OR-WA                        1,438,644     2,883,737    49.89%        76.0

  69    Evansville-Henderson, IN-KY-IL               367,147       854,714      42.96%        75.3

  80    Mobile, AL                                   289,482       676,258      42.81%        74.8

  93    Joplin, MO-KS-OK                             102,316       263,904      38.77%        74.7

  68    Champaign-Urbana, IL                         253,397       630,898      40.16%        73.5

  124   Tulsa, OK-KS                                 650,809       1,384,426    47.01%        72.4

  104   Madison, WI-IL-IA                            402,418       933,823      43.09%        71.3

  72    Paducah, KY-IL                               56,042        226,586      24.73%        70.0

  79    Montgomery, AL                               239,775       481,137      49.84%        66.9

  125   Oklahoma City, OK                            774,495       1,698,197    45.61%        65.0

  35    Tallahassee, FL-GA                           334,360       720,434      46.41%        63.5

  38    Macon, GA                                    313,486       768,701      40.78%        62.9

  37    Albany, GA                                   151,812       468,178      32.43%        62.7

  118   Omaha, NE-IA-MO                              492,197       1,044,156    47.14%        62.4

  159   Tucson, AZ                                   495,573       999,882      49.56%        60.0

  97    Springfield, IL-MO                           245,684       517,462      47.48%        58.2

  98    Columbia, MO                                 157,350       369,014      42.64%        58.0

  88    Shreveport-Bossier City, LA-AR               233,657       573,616      40.73%        58.0

  4     Burlington, VT-NY                            186,248       605,393      30.76%        57.6

  89    Monroe, LA                                   149,561       333,519      44.84%        56.1

  106   Rochester, MN-IA-WI                          157,011       318,374      49.32%        55.6

  36    Dothan, AL-FL-GA                             120,426       332,409      36.23%        53.7

  105   La Crosse, WI-MN                             54,764        241,903      22.64%        53.7

  86    Lake Charles, LA                             215,364       536,758      40.12%        52.4

  141   Denver-Boulder-Greeley, CO-KS-NE             2,335,988     3,984,105    58.63%        52.0

  95    Jonesboro, AR-MO                             107,880       303,852      35.50%        51.3

  16    Staunton, VA-WV                              171,964       334,087      51.47%        51.0

  61    Traverse City, MI                            70,091        286,745      24.44%        50.7

  119   Lincoln, NE                                  178,073       379,321      46.95%        50.2

  75    Tupelo, MS-AL-TN                             230,214       625,002      36.83%        49.8

  77    Jackson, MS-AL-LA                            593,570       1,432,518    41.44%        49.7

  94    Springfield, MO                              321,087       859,559      37.35%        48.1

  100   Des Moines, IA-IL-MO                         748,786       1,683,257    44.48%        47.3

  91    Fort Smith, AR-OK                            114,606       329,136      34.82%        46.5

  132   Corpus Christi, TX                           235,222       549,012      42.84%        46.5

  90    Little Rock-North Little Rock, AR            700,992       1,614,850    43.41%        46.1

  166   Eugene-Springfield, OR-CA                    329,133       791,776      41.57%        43.1

  76    Greenville, MS                               97,365        252,280      38.59%        41.0

  117   Sioux City, IA-NE-SD                         91,763        252,656      36.32%        39.5

  152   Salt Lake City-Ogden, UT-ID                  1,009,595     2,088,974    48.33%        35.7

  123   Topeka, KS                                   179,799       454,539      39.56%        35.6

  59    Green Bay, WI-MI                             289,283       671,225      43.10%        34.2

  108   Wausau, WI                                   192,046       487,723      39.38%        34.1

  157   El Paso, TX-NM                               309,851       955,602      32.42%        33.0

  58    Northern Michigan, MI                        30,911        269,986      11.45%        28.5

  169   Richland-Kennewick-Pasco, WA                 275,354       677,674      40.63%        27.7

  137   Lubbock, TX                                  177,227       374,626      47.31%        27.2

  153   Las Vegas, NV-AZ-UT                          898,876       1,709,797    52.57%        23.7

  147   Spokane, WA-ID                               352,752       829,735      42.51%        23.6

  1     Bangor, ME                                   \*            526,106      \*            20.9

  156   Albuquerque, NM-AZ                           454,076       921,086      49.30%        20.9

  122   Wichita, KS-OK                               416,387       1,175,577    35.42%        20.5

  128   Abilene, TX                                  80,260        222,147      36.13%        20.3

  109   Duluth-Superior, MN-WI                       145,751       350,059      41.64%        18.5

  113   Fargo-Moorhead, ND-MN                        161,626       371,691      43.48%        16.4

  155   Farmington, NM-CO                            86,362        193,872      44.55%        16.0

  116   Sioux Falls, SD-IA-MN-NE                     241,324       519,143      46.49%        15.1

  165   Redding, CA-OR                               138,134       336,820      41.01%        14.4

  149   Twin Falls, ID                               71,395        162,397      43.96%        14.1

  150   Boise City, ID-OR                            273,879       574,876      47.64%        13.7

  139   Santa Fe, NM                                 114,412       258,790      44.21%        13.1

  126   Western Oklahoma, OK                         58,060        139,761      41.54%        12.0

  138   Amarillo, TX-NM                              216,278       481,633      44.91%        11.8

  120   Grand Island, NE                             101,188       288,047      35.13%        11.6

  136   Hobbs, NM-TX                                 65,699        190,340      34.52%        11.2

  148   Idaho Falls, ID-WY                           139,264       306,120      45.49%        10.9

  146   Missoula, MT                                 154,364       399,183      38.67%        10.8

  110   Grand Forks, ND-MN                           88,977        230,253      38.64%        10.2

  135   Odessa-Midland, TX                           164,993       388,007      42.52%        10.1

  129   San Angelo, TX                               79,794        202,679      39.37%        10.1

  140   Pueblo, CO-NM                                100,157       279,600      35.82%        8.7

  168   Pendleton, OR-WA                             61,713        200,681      30.75%        8.7

  154   Flagstaff, AZ-UT                             164,921       401,766      41.05%        8.2

  142   Scottsbluff, NE-WY                           24,854        92,360       26.91%        7.8

  151   Reno, NV-CA                                  313,218       670,013      46.75%        7.6

  111   Minot, ND                                    \*            111,195      \*            7.0

  112   Bismarck, ND-MT-SD                           73,115        175,427      41.68%        6.3

  114   Aberdeen, SD                                 \*            82,608       \*            5.4

  143   Casper, WY-ID-UT                             166,979       408,708      40.86%        5.2

  115   Rapid City, SD-MT-NE-ND                      81,387        213,696      38.09%        5.0

  121   North Platte, NE-CO                          \*            61,758       \*            5.0

  144   Billings, MT-WY                              161,907       404,902      39.99%        4.9

  145   Great Falls, MT                              55,629        166,564      33.40%        4.2

  171   Anchorage, AK                                285,300       626,932      45.51%        1.0
  ----- -------------------------------------------- ------------- ------------ ------------- ---------

\* Data withheld to maintain firm confidentiality.

Source: Federal Communications Commission internal analysis based on
preliminary year-end 2002 filings for Numbering Resource Utilization in
the United States. Density is persons per square mile.

Table 4: Top 25 Mobile Telephone Operators by Subscribers

(in thousands)

  ----- --------------------- --------- ---------------------- ------------
        Year-End 2001                   Year-End 2002          

        Operator              Total     Operator               Total

  1     Verizon Wireless      29,398    Verizon Wireless       32,491

  2     Cingular Wireless     21,596    Cingular Wireless      21,900

  3     AT&T Wireless         18,047    AT&T Wireless          20,900

  4     Sprint PCS            13,555    Sprint PCS             14,760

  5     Nextel                8,667     Nextel                 10,612

  6     VoiceStream           6,993     T-Mobile               9,913

  7     ALLTEL                6,683     ALLTEL                 7,600

  8     US Cellular           3,461     US Cellular            4,103

  9     Western Wireless      1,177     Leap Wireless          1,512

  10    Leap Wireless         1,119     Western Wireless       1,197

  11    Qwest                 1,114     Qwest                  1,034

  12    Telecorp              1,018     Centennial (1)         897

  13    Centennial            827       Nextel Partners        877

  14    CenturyTel            797       Triton PCS             830

  15    Dobson Comm.          700       Dobson Comm.           768

  16    Triton PCS            686       Rural Cellular         722

  17    American Cellular     657       American Cellular      690

  18    Rural Cellular        647       Alamosa PCS            622

  19    Price Wireless        570       AirGate                589

  20    Nextel Partners       516       US Unwired             561

  21    Alamosa PCS           503       Broadwing              470

  22    Broadwing             462       Midwest Wireless       300

  23    AirGate               453       Horizon PCS            271

  24    PrimeCo               385       Ntelos                 267

  25    PR. Tel. Co.          327       Southern LINC          260
  ----- --------------------- --------- ---------------------- ------------

Sources: For 2001, see *Seventh Report*, at 13094. For 2002, publicly
available company documents such as operators' news releases and filings
made with the Securities and Exchange Commission. Southern LINC,
*Frequently Asked Questions* (visited May 29, 2003)
\<http://www.southernlinc.com/faqs.asp\>. Midwest Wireless, *Midwest
Wireless and DTN Market Access Team Up to Deliver Commodity Quotes to
Wireless Phones*, News Release, May 27, 2003.

Notes

\(1\) As of Nov. 30, 2002.

Table 5: Estimated Mobile Telephone Rollouts

by Number of Launches by County

  ------------- ----------- ------------- --------- ------------ ---------
  Total Number  Number of   POPs          \% of     Square Miles \% of
  of Providers  Counties    Contained in  Total US  Contained in Total US
  in a County               Those         POPs      Those        Square
                            Counties (1)            Counties     Miles

  3 or More     2232        270,233,931   94.7%     1,861,820    51.6%

  4 or More     1674        254,738,264   89.3%     1,301,067    36.1%

  5 or More     1211        235,569,285   82.6%     940,523      26.1%

  6 or More     789         202,753,811   71.1%     642,426      17.8%

  7 or More     259         72,474,947    25.4%     230,073      6.4%
  ------------- ----------- ------------- --------- ------------ ---------

Table 6: County Quartiles with Estimated Rollout by at least 3 Mobile
Telephone Providers

  ------------ ---------- ----------- ----------- ------------- ------------- -----------
  County       Total      Number of   Percent of  Total POPs in POPs in       Percent of
  Quartile     Number of  Counties    Counties in Quartile      Counties with Quartile
  Based on     Counties   with at     Quartile    Counties (1)  at least 3    POPs with
  Population   (2)        least 3     with at                   Providers     at least 3
                          Providers   least 3                                 Providers
                                      Providers                               

  1st Quartile 805        781         97.0%       234,640,253   232,508,956   99.1%

  2nd Quartile 805        659         81.9%       31,425,466    26,141,620    83.2%

  3rd Quartile 804        527         65.6%       14,135,298    9,490,930     67.1%

  4th Quartile 805        263         32.7%       5,029,499     1,988,010     39.5%
  ------------ ---------- ----------- ----------- ------------- ------------- -----------

Source: Federal Communications Commission estimates based on publicly
available information.

Notes:

(1) POPs from the 2000 Census.

(2) United States and Puerto Rico

Table 7: Mobile Telephone Digital Coverage

  ------------------ --------------- ---------- -------------- ------------
  Technology         POPs in Those   \% of      Square Miles   \% of Total
                     Areas (1)       Total POPs Contained in   Square Miles
                                     (2)        Those Counties 

  CDMA               259,854,520     91.1%      1,849,933.6    51.3%

  TDMA / GSM         265,342,450     93.0%      1,928,473.1    53.5%

  iDEN               248,006,454     86.9%      1,295,614.2    35.9%

  Total Digital      277,586,564     97.3%      2,573,948.1    71.4%
  ------------------ --------------- ---------- -------------- ------------

Source: Federal Communications Commission estimates based on publicly
available information.

Notes:

Broadband PCS and digital SMR licensees are analyzed by county; cellular
licensees are analyzed by cellular market areas ("CMAs").

POPs from the 2000 Census.

**Table 8: Change in CPI**

  ------ ------- -------- ---------- -------- ----------- -------- ----------- -------- ----------- --------
         CPI              Cellular            All                  Local                Long        
                          CPI                 Telephone            Telephone            Distance    
                                              CPI                  CPI                  Telephone   
                                                                                        CPI         

         Index   Annual   Index      Annual   Index Value Annual   Index Value Annual   Index Value Annual
         Value   Change   Value      Change               Change               Change               Change

  1997   100              100                 100                  100                  100          

  1998   101.6   1.6%     95.1       -4.9%    100.7       0.7%     101.6       1.6%     100.5       0.5%

  1999   103.8   2.2%     84.9       -10.7%   100.1       -0.6%    103.4       1.8%     98.2        -2.3%

  2000   107.3   3.4%     76         -10.5%   98.5        -1.6%    107.7       4.1%     91.8        -6.5%

  2001   110.3   2.8%     68.1       -10.4%   99.3        0.8%     113.3       5.2%     88.8        -3.3%

  2002   112.1   1.6%     67.4       -1.0%    99.7        0.4%     118.5       4.5%     84.9        -4.4%

                                                                                                    

  1997           12.1%               -32.6%               -0.3%                18.5%                -15.1%
  to                                                                                                
  2002                                                                                              
  ------ ------- -------- ---------- -------- ----------- -------- ----------- -------- ----------- --------

Source: Bureau of Labor Statistics.

**Table 9: Average Revenue Per Minute**

  ------------ ------------- ------------- ---------------- ---------------
               Average Local Minutes of    Average Revenue  Annual Change
               Monthly Bill  Use Per Month Per Minute       

  1993         \$61.49       140           \$0.44           

  1994         \$56.21       119           \$0.47           8%

  1995         \$51.00       119           \$0.43           -9%

  1996         \$47.70       125           \$0.38           -11%

  1997         \$42.78       117           \$0.37           -4%

  1998         \$39.43       136           \$0.29           -21%

  1999         \$41.24       185           \$0.22           -23%

  2000         \$45.27       255           \$0.18           -20%

  2001         \$47.37       380           \$0.12           -30%

  2002         \$48.40       427           \$0.11           -9%
  ------------ ------------- ------------- ---------------- ---------------

Source: *See* Appendix D, Table 1, at D-2 (ARPU); *Dec 2002 CTIA
Survey*, at 208 (minutes of use).

**Table 10: Market Entry Over Time**

  -------------- --------------- -------------- ------------ --------------
                 Percent of                                  
                 Total US POPs                               
                 Covered                                     

  Total Number   Eighth Report   Seventh Report Sixth Report Fifth Report
  of Providers                                               
  in a County                                                

  3 or more      94.7%           94.1%          90.8%        87.8%

  4 or more      89.3%           88.7%          84.4%        79.8%

  5 or more      82.6%           80.4%          75.1%        68.5%

  6 or more      71.1%           53.1%          46.7%        34.6%

  7 or more      25.4%           21.2%          11.9%        4.4%
  -------------- --------------- -------------- ------------ --------------

Source: FCC estimates

Table 11: U.S. Mobile Telephone Operators'

Holdings in Foreign Mobile Operators

+------------+-------------+-------------+------------+-------------+
| **         | **Country** | **Su        | *          | **Ownership |
| Operator** |             | bscribers** | *Venture** | (%)**       |
|            |             |             |            |             |
|            |             | **(Brand    |            |             |
|            |             | name)**     |            |             |
+------------+-------------+-------------+------------+-------------+
| SBC        | Denmark     | 1.975       | Tele       | 41.6        |
|            |             | million     | Danmark    |             |
+------------+-------------+-------------+------------+-------------+
|            | Belgium     | 4.07        | Belgacom   | 17.5        |
|            |             | million     |            | (controls   |
|            |             |             |            | 24.36%      |
|            |             | (Proximus)  |            | through     |
|            |             |             |            | investment  |
|            |             |             |            | in Tele     |
|            |             |             |            | Danmark,    |
|            |             |             |            | which owns  |
|            |             |             |            | 16.5% of    |
|            |             |             |            | Belgacom)   |
+------------+-------------+-------------+------------+-------------+
|            | South       | 6.395       | Telkom     | 18          |
|            | Africa      | million     | SA(owns    |             |
|            |             | (Vodacom)   | 50% of     |             |
|            |             |             | Vodacom)   |             |
+------------+-------------+-------------+------------+-------------+
|            | Mexico      | 20.067      | America    | 8           |
|            |             | million     | Movil      |             |
+------------+-------------+-------------+------------+-------------+
| BellSouth  | Uruguay     | 143,000     | Abiatar    | 46          |
|            |             |             |            |             |
|            |             | (Movicom)   |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Guatemala   | 193,000     | BellSouth  | 60          |
|            |             |             | Guatemala  |             |
+------------+-------------+-------------+------------+-------------+
|            | Nicaragua   | 201,000     | Nicacell   | 89          |
+------------+-------------+-------------+------------+-------------+
|            | Ecuador     | 632,000     | Otecel     | 89.4        |
+------------+-------------+-------------+------------+-------------+
|            | Panama      | 335,000     | BellSouth  | 43.7        |
|            |             |             | Panama     |             |
+------------+-------------+-------------+------------+-------------+
|            | Brazil (Sao | 1.669       | BCP        | 45.4        |
|            | Paulo)      | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Brazil      | 1.005       | BCP        | 47.1        |
|            | (northeast) | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Venezuela   | 3.107       | Telcel     | 78.2        |
|            |             | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Argentina   | 1.32        | Movicom/   | 65          |
|            |             | million     |            |             |
|            |             |             | BellSouth  |             |
+------------+-------------+-------------+------------+-------------+
|            | Chile       | 1.032       | BellSouth  | 100         |
|            |             | million     | Chile      |             |
+------------+-------------+-------------+------------+-------------+
|            | Columbia    | 1.349       | Celumovil  | 66          |
|            |             | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Peru        | 530,000     | Tele 2000  | 97.4        |
+------------+-------------+-------------+------------+-------------+
|            | Denmark     | 1.103       | Sonafon    | 46.5        |
|            |             | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Israel      | 2.53        | Cellcom    | 34.7        |
|            |             | muillion    |            |             |
+------------+-------------+-------------+------------+-------------+
| AT&T       | Canada      | 3.356       | Rogers     | 34.3        |
|            |             | million     | Wireless   |             |
+------------+-------------+-------------+------------+-------------+
|            | Taiwan      | 4.341       | FarEasTone | 22.7        |
|            |             | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Slovakia    | 1.298       | EuroTel    | 24.5        |
|            |             | million     | Bratislava |             |
+------------+-------------+-------------+------------+-------------+
|            | India       | 1.204       | IDEA       | 33          |
|            |             | million     | Cellular   |             |
+------------+-------------+-------------+------------+-------------+
|            | India       | 1 million   | BPL        | 49          |
|            |             |             | Cellular   |             |
|            |             | (BPL        |            |             |
|            |             | Mobile)     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Antigua &   | NA          | Antigua    | 85          |
|            | Barbuda     |             | Wireless   |             |
+------------+-------------+-------------+------------+-------------+
|            | Bermuda     | NA          | Telecomm   | 60          |
|            |             |             | unications |             |
|            |             |             | Limited    |             |
+------------+-------------+-------------+------------+-------------+
|            | Dominica    | NA          | Wireless   | 100         |
|            |             |             | Ventures   |             |
+------------+-------------+-------------+------------+-------------+
|            | St. Lucia   | NA          | Wireless   | 69          |
|            |             |             | Ventures   |             |
+------------+-------------+-------------+------------+-------------+
|            | St. Vincent | NA          | Wireless   | 100         |
|            | &           |             | Ventures   |             |
|            | Grenadines  |             |            |             |
+------------+-------------+-------------+------------+-------------+
| Verizon    | Italy       | 19 million  | Omnitel    | 23.1        |
|            |             |             | Pronto     |             |
|            |             |             | Italia     |             |
+------------+-------------+-------------+------------+-------------+
|            | Slovakia    | 1.298       | EuroTel    | 24.5        |
|            |             | million     |            |             |
|            |             |             | Bratislava |             |
+------------+-------------+-------------+------------+-------------+
|            | Greece      | 2.514       | STET       | 17.5        |
|            |             | million     | Hellas     |             |
+------------+-------------+-------------+------------+-------------+
|            | Indonesia   | 1.823       | Ex         | 23.1        |
|            |             | million     | celcomindo |             |
+------------+-------------+-------------+------------+-------------+
|            | Japan       | 3.849       | Tu-Ka      | 2.7-5       |
|            |             | million     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | New Zealand | 1.229       | Telecom    | 21.5        |
|            |             | million     | New        |             |
|            |             |             | Zealand    |             |
+------------+-------------+-------------+------------+-------------+
|            | Philippines | NA          | BayanTel   | 19.4        |
|            |             |             | (owns      |             |
|            |             | (Extelcom)  | 46.6%      |             |
|            |             |             | stake in   |             |
|            |             |             | wireless   |             |
|            |             |             | provider   |             |
|            |             |             | Extelcom)  |             |
+------------+-------------+-------------+------------+-------------+
|            | Argentina   | 1.006       | CTI        | 65.3        |
|            |             | million     | Holdings   |             |
|            |             |             |            |             |
|            |             | (CTI Movil) |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Canada      | 2.996       | TELUS      | 23.7        |
|            |             | million     | C          |             |
|            |             |             | orporation |             |
+------------+-------------+-------------+------------+-------------+
|            | Venezuela   | 2           | CANTV      | 28.5        |
|            |             | .561million |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Taiwan      | 6.24        | Taiwan     | 13          |
|            |             | million     | Cellular   |             |
|            |             |             | C          |             |
|            |             |             | orporation |             |
+------------+-------------+-------------+------------+-------------+
|            | Dominican   | 550,000     | CODETEL    | 100         |
|            | Republic    |             |            |             |
+------------+-------------+-------------+------------+-------------+
| Western    | Ireland     | 145,000     | Meteor     | 81          |
| Wireless   |             |             |            |             |
| Int        |             |             |            |             |
| ernational |             |             |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Austria     | 318,000     | tele.ring  | 99.5        |
+------------+-------------+-------------+------------+-------------+
|            | Slovenia    | NA          | Western    | 100         |
|            |             |             | Wireless   |             |
+------------+-------------+-------------+------------+-------------+
|            | Georgia     | NA          | MagtiCom   | 14.5        |
+------------+-------------+-------------+------------+-------------+
|            | Ghana       | NA          | Western    | 56.7        |
|            |             |             | T          |             |
|            |             |             | elesystems |             |
+------------+-------------+-------------+------------+-------------+
|            | Cote        | NA          | CORA de    | 40          |
|            | d'Ivoire    |             | Comstar    |             |
+------------+-------------+-------------+------------+-------------+
|            | Bolivia     | NA          | NuevaTel   | 71.5        |
+------------+-------------+-------------+------------+-------------+
|            | Haiti       | NA          | COMCEL     | 51          |
+------------+-------------+-------------+------------+-------------+
| Nextel     | Canada      | NA          | NII        | 36          |
| Int        |             |             | Holdings   |             |
| ernational |             |             |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Japan       | NA          |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Argentina   | NA          |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Brazil      | NA          |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Mexico      | 517,000     |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Peru        | NA          |            |             |
+------------+-------------+-------------+------------+-------------+
|            | Philippines | NA          |            |             |
+------------+-------------+-------------+------------+-------------+

Sources: Publicly available information such as operators' news
releases, web sites and filings with the Securities and Exchange
Commission. Subscriber figures for a number of foreign affiliates are
from Linda Mutschler, *Global Wireless Matrix 4Q02*, Merrill Lynch
Global Securities Research, Apr. 2, 2003.

Table 12: Mobile Performance in Selected Countries

+-----------+---------+------------+-----------+----------+-----------+
| Country   | CPP or  | P          | Share of  | MOUs     | Revenue   |
|           |         | enetration | Prepaid   |          | per       |
|           | MPP     | (%)        | (%)       |          |           |
|           |         |            |           |          | Minute    |
|           |         |            |           |          | (\$)      |
+-----------+---------+------------+-----------+----------+-----------+
| **USA**   | **MPP** | **49**     | **5**     | **458**  | **0.12**  |
+-----------+---------+------------+-----------+----------+-----------+
| *         | **MPP** | **37**     |           | **270**  | **0.11**  |
| *Canada** |         |            |           |          |           |
+-----------+---------+------------+-----------+----------+-----------+
| **UK**    | **CPP** | **85**     | **69**    | **132**  | **0.22**  |
+-----------+---------+------------+-----------+----------+-----------+
| **        | **CPP** | **72**     | **54**    | **72**   | **0.29**  |
| Germany** |         |            |           |          |           |
+-----------+---------+------------+-----------+----------+-----------+
| **Italy** | **CPP** | **93**     |           | **121**  | **0.20**  |
+-----------+---------+------------+-----------+----------+-----------+
| *         | **CPP** | **63**     |           | **156**  | **0.20**  |
| *France** |         |            |           |          |           |
+-----------+---------+------------+-----------+----------+-----------+
| **        | **CPP** | **85**     |           | **146**  | **0.24**  |
| Finland** |         |            |           |          |           |
+-----------+---------+------------+-----------+----------+-----------+
| **Japan** | **CPP** | **62**     | **3**     | **170**  | **0.30**  |
+-----------+---------+------------+-----------+----------+-----------+
| **South   | **CPP** | **68**     | **1**     | **296**  | **0.10**  |
| Korea**   |         |            |           |          |           |
+-----------+---------+------------+-----------+----------+-----------+
| **Au      | **CPP** | **68**     |           | **173**  | **0.16**  |
| stralia** |         |            |           |          |           |
+-----------+---------+------------+-----------+----------+-----------+

Sources: Linda Mutschler, *Global Wireless Matrix 4Q02*, Global
Securities Research, Merrill Lynch, Apr. 2, 2003; Linda Mutschler, *The
Next Generation VII*, Global Securities Research, Merrill Lynch, Feb.
21, 2003.

APPENDIX E:

MOBILE DATA

**[Table of Contents]{.underline}**

Table 1: Text Messaging and IM Services E-2

Table 2: Mobile Internet Access Services E-3

Table 3: Mobile Data Service Availability by Device E-5

Table 1: Text Messaging and IM Services

+---------+----+------+-------------------+-------------------------+
| **Pro   | *  |      | **Monthly Price   | **IM Service\           |
| vider** | *P |      | for Messaging     | (included unless        |
|         | er |      | Packages**        | otherwise noted)**      |
|         | -M |      |                   |                         |
|         | es |      |                   |                         |
|         | sa |      |                   |                         |
|         | ge |      |                   |                         |
|         | ** |      |                   |                         |
+---------+----+------+-------------------+-------------------------+
|         | Se | Rec  |                   |                         |
|         | nd | eive |                   |                         |
+---------+----+------+-------------------+-------------------------+
| Verizon | 1  | 2¢   | \$2.99 for 100    | AOL IM\                 |
| W       | 0¢ |      |                   | MSN Messenger (offered  |
| ireless |    |      | \$3.99 for 200    | through Mobile Web      |
|         |    |      |                   | plan)                   |
|         |    |      | \$7.99 for 600    |                         |
+---------+----+------+-------------------+-------------------------+
| C       | 1  | 10¢  | \$2.99 for 100    |                         |
| ingular | 0¢ |      |                   |                         |
| W       |    |      | \$5.99 for 250    |                         |
| ireless |    |      |                   |                         |
|         |    |      | \$9.99 for 500    |                         |
+---------+----+------+-------------------+-------------------------+
| T       | 5¢ | 5¢   | \$2.99 for 500    | AOL IM                  |
| -Mobile |    |      |                   |                         |
+---------+----+------+-------------------+-------------------------+
| AT&T    | 1  | Free | \$1.99 for 25     | AOL IM\                 |
| W       | 0¢ |      |                   | Yahoo! Messenger        |
| ireless |    |      | \$4.99 for 100\   |                         |
|         |    |      | received messages |                         |
|         |    |      | free              |                         |
+---------+----+------+-------------------+-------------------------+
| Nextel  | 1  | 10¢  | \$5.00 for 300    | AOL IM (\$5 per month   |
|         | 0¢ |      |                   | for unlimited use)      |
|         |    |      | \$9.00 for 1000   |                         |
|         |    |      |                   |                         |
|         |    |      | \$10.00 for       |                         |
|         |    |      | unlimited text,   |                         |
|         |    |      | AIM, and web use  |                         |
+---------+----+------+-------------------+-------------------------+
| Sprint  | NA | NA   | \$15 per month    |                         |
| PCS     |    |      | for all PCS       |                         |
|         |    |      | Vision            |                         |
|         |    |      | applications      |                         |
+---------+----+------+-------------------+-------------------------+

Sources:

Text Messaging: Verizon Wireless, *Mobile Messenger Service: Overview*
(visited Jan. 17, 2003)
\<http://www.verizonwireless.com/jsp/mobilemessenger/index.jsp\>;
Cingular Wireless, *Text Messaging Pricing* (visited Jan. 23, 2003)
\<http://www.cingular.com/beyond_voice/tm_pricing\>; T-Mobile, *2-Way
Text Messaging* (visited Jan. 24, 2003)
\<http://www.t-mobile.com/2waytxt/\>; AT&T Wireless, *Phone Fun
Messaging* (visited Jan. 27, 2003)
\<http://www.attws.com/personal/txt_msg/messaging/text\>/; Sprint PCS
Vision, *How Can I Use It?* (visited Jan. 28, 2003)
\<http://www.pcsvision.com/howcan.html\>; Sprint PCS, *PCS Service
Plans: Select Your Plan* (visited Jan. 28, 2003)
\<http://www1.sprintpcs.com/explore/servicePlansOptionsV2/PlansOptions.jsp\>;
Nextel, *Nextel Mobile Messaging* (visited Feb. 4, 2003)
\<http://www.nextel.com/services/mobilemessaging/index.shtml\>.

IM: Verizon Wireless, *Mobile Messenger Service: Instant Messaging*
(visited Jan. 17, 2003)
\<http://www.verizonwireless.com/jsp/mobilemessenger/instantmessaging.jsp\>;
T-Mobile, *2-Way Text Messaging* (visited Jan. 24, 2003)
\<http://www.t-mobile.com/2waytxt/\>; AT&T Wireless, *Phone Fun Instant
Messaging* (visited Jan. 27, 2003)
\<http://www.attws.com/personal/txt_msg/messaging/instant/\>; Nextel,
*Nextel Mobile Messaging* (visited Feb. 4, 2003)
\<http://www.nextel.com/services/mobilemessaging/index.shtml\>.

Table 2: Mobile Internet Access Services

  --------------- ------------------ ------------- ------------ --------------- -------------- --------------
  Carrier/        Plan               Network       Data, or     Measure-ment    Service        Device
  Provider                                         Voice                        Specific?      Specific?
                                                   Add-On?                                     

  **Verizon       **Express Network  **1xRTT**     **Add-on**   **Minutes**                    **1xRTT phone,
  Wireless**      Buckets**                                                                    Thera
                                                                                               smartphone**

                  **Express Network  **1xRTT**     **Data**     **MB**          **Internet     **1xRTT phone,
                  Per-MB**                                                      Access**       Aircard 555
                                                                                               card, or Thera
                                                                                               smartphone**

                  **Express Network  **1xRTT**     **Data**     **Unlimited**   **Internet     
                  Unlimited**                                                   Access**       

                  **Mobile IP**      **2G**        **Data**     **Unlimited**   **Internet     **CDPD
                                                                                Access**       wireless modem
                                                                                               card**

                  **Mobile Web**     **2G**        **Add-on**   **Minutes**     **Text, IM,    **Web enabled
                                                                                Web, E-mail**  phone**

                  **Mobile Web       **2G**        **Add-on**   **Minutes**     **Text, IM,    **Kyocera
                  Plus**                                                        Web, E-mail**  smartphone**

                  **Get It Now**     **2G with     **Add-on**   **Minutes**     **Ring tones,  **Get It
                                     BREW**                                     Games, Web,    Now-enabled
                                                                                MMS**          phone**

  **Cingular      **Wireless         **2G**        **Add-on**   **Minutes**     **Info alerts, **Web enabled
  Wireless**      Internet**                                                    Web**          phone**

                  **Wireless         **GPRS**      **Add-on or  **MB**          **Internet     **GPRS phone
                  Internet Express**               data**                       access**       or Treo
                                                                                               smartphone**

  **Nextel**      **Web**            **2G**        **Add-on**   **Unlimited or  **Info         **Web enabled
                                                                minutes**       alerts**       phone**

                  **Premium Web**    **2G**        **Add-on**   **Unlimited or  **IM, Web,     **Web enabled
                                                                minutes**       E-mail**       phone**

                  **Full Service     **2G**        **Add-on**   **Unlimited or  **Text, IM,    **Web enabled
                  Package**                                     minutes**       Web, E-mail    phone**
                                                                                (corp)**       

                  **Packetstream**   **2G**        **Data**     **MB**          **Internet     **Phone or
                                                                                access**       iM1100 card**

                  **Packetstream     **2G**        **Data**     **Unlimited**   **Internet     **Phone or
                  Gold**                                                        access**       iM1100 card**

                  **Dial-Up          **2G**        **Add-on**   **Minutes**     **Web, E-mail, **Phone
                  Service**                                                     web, Corp      connected to
                                                                                server**       PC or PDA**

  **T-Mobile**    **T-Zones**        **GPRS**      **Add-on**   **MB**          **Web, Ring    **GPRS phone**
                                                                                tones, Games,  
                                                                                MMS, E-mail    
                                                                                (POP3)**       

                  **T-Zones Pro**    **GPRS**      **Add-on**   **MB**          **Web, Ring    **GPRS phone**
                                                                                tones, Games,  
                                                                                MMS, E-mail    
                                                                                (corp)**       

                  **T-Mobile         **GPRS**      **Data**     **MB**          **Internet     **GPRS phone
                  Internet**                                                    Access**       or modem card
                                                                                               attached to PC
                                                                                               or PDA**

                  **Sidekick plans** **GPRS**      **Add-on**   **Voice minutes **Text, IM,    **Sidekick
                                                                Unlimited       MMS, Web,      smartphone**
                                                                data**          E-mail**       

  **AT&T          **mMode**          **GPRS**      **Add-on or  **MB**          **Games, MMS,  **GPRS phone**
  Wireless**                                       data**                       Ring tones,    
                                                                                Web, E-mail**  

  **Sprint PCS**  **PCS Vision**     **1xRTT**     **Add-on**   **Unlimited**   **Text, Ring   **1xRTT
                                                                                tones, MMS,    phone**
                                                                                Web, E-mail    
                                                                                (corp)**       

                  **Vision for       **1xRTT**     **Data**     **MB\           **Internet     **1xRTT phone,
                  laptops and PDAs**                            Unlimited**     access**       smartphone, or
                                                                                               wireless modem
                                                                                               card**

  **Go America**  **Data -- All      **Mobitex/\   **Data**     **Unlimited**   **Web,         **RIM 950,
                  RIM**              GPRS**                                     BlackBerry     857, 957\
                                                                                email**        RIM 5810**

                  **Data -- RIM      **GPRS**      **Data (must **MB:           **Web\         **RIM 5810**
                  5810**                           purchase sep Unlimited:**    BlackBerry     
                                                   voice                        email**        
                                                   plan)**                                     

                  **Data & Voice --  **GPRS**      **Data with  **Unlimited:\   **BlackBerry   **RIM 5810**
                  RIM 5810**                       voice**      MB:\            email\         
                                                                Minute:**       Web\           
                                                                                Voice**        

                  **Data -- GPRS**   **GPRS**      **Data**     **MB**          **Internet     **G100 GPRS
                                                                                access**       card for
                                                                                               laptops and
                                                                                               Pocket PCs**

                  **Data -- 1xRTT    **1xRTT**     **Data**     **MB**          **Internet     **Aircard 555
                  (offered by                                                   access**       card for
                  Earthlink)**                                                                 laptops**

  **Earthlink**   **Internet access  **2G - CDPD** **Data**     **Unlimited**   **Internet     **Certain
                  for PDAs**                                                    access**       PDAs - Monthly
                                                                                               prices vary by
                                                                                               PDA**

                  **Internet access  **Mobitex**   **Data**     **Unlimited**   **BlackBerry   **RIM 950,
                  for RIM**                                                     email, web     857, 957**
                                                                                access is      
                                                                                extra**        

                  **Data -- 1xRTT    **1xRTT**     **Data**     **MB**          **Internet     **Aircard 555
                  (same as above)**                                             access**       card for
                                                                                               laptops**
  --------------- ------------------ ------------- ------------ --------------- -------------- --------------

Sources: The information in the table is a sample of mobile Internet
access services offered by selected mobile data providers in March 2003
and should not be considered an exhaustive list. The information was
taken from company web sites, news releases, and newspaper and
periodical articles.

Table 3: Mobile Service Availability by Device\*

  ---------------- ---------- ---------- ------------ ---------- ----------
  Application/     Type of                                       
  Feature          Device                                        

                   Pager      Mobile     Smartphone   PDA        Laptop
                              Phone                              

  **Voice**                   ****      ****                   

  **Paging**       ****      ****      ****                   

  **Text           ****      ****      ****        ****      
  Messaging**                                                    

  **Information    ****      ****      ****                   
  Alerts**                                                       

  **Ring tones &              ****      ****                   
  Graphics**                                                     

  **Games**                   ****      ****                   

  **Images &                  ****      ****        ****      ****
  Video**                                                        

  **Web Browsing              ****      ****                   
  -- Limited**                                                   

  **Web Browsing -                       ****        ****      ****
  Complete**                                                     

  **E-mail --                 ****      ****        ****      ****
  POP3**                                                         

  **E-mail --                            ****        ****      ****
  corporate**                                                    

  **Corporate                            ****        ****      ****
  server access**                                                

                                                                 

  **QWERTY                               ****        ****      ****
  Keypad**                                                       

  **Color**                   ****      ****        ****      ****
  ---------------- ---------- ---------- ------------ ---------- ----------

\* The above table provides an overview of the applications and features
that are available on at least one model of the device categories
included in the table. It is not meant to imply that the marked
applications and features are available on every model within the device
category.

Sources: The information was taken from company web sites, news
releases, and newspaper and periodical articles in February and March
2003.

APPENDIX F:

MAPS

**[Table of Contents]{.underline}**

Map 1: Mobile Telephone Operator Coverage Estimated by County
\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-2

Map 2: A-Side Cellular
Coverage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
F-3

Map 3: B-Side Cellular
Coverage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
F-4

Map 4: Mobile Telephony Penetration Estimated by Economic
Area\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-5

Map 5: Estimated Rollout with Any Digital
Coverage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-6

Map 6: Estimated Rollout with CDMA-Based
Coverage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
F-7

Map 7: Estimated Rollout with TDMA/GSM-Based
Coverage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
F-8

Map 8: Estimated Rollout with iDEN-Based
Coverage\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\....
F-9

Map 9: Estimated Rollout of GPRS, CDMA2000 1xRTT, and 1xEV-DO
Networks\...\...\...\...\...\...\...\...\...\...\...\...\...\.... F-10

Map 10: Lowerband Fixed Wireless Internet Access Rollout Estimated by
County\...\...\...\...\...\...\...\...\...\...\...\...\...\...\... F-11

Table 1: Geographic Licensing
Schemes\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-12

Map 11: Basic Trading
Areas\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-13

Map 12: Major Trading
Areas\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\.....
F-14

Map 13: Cellular Market
Areas\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-15

Map 14: Economic
Areas\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...\...
F-16

**Map 1**

![](media/image2.png){width="6.646527777777778in"
height="8.608333333333333in"}

**Map 2**

![](media/image3.png){width="6.49375in" height="8.403472222222222in"}

**Map 3**

![](media/image4.png){width="6.49375in" height="8.403472222222222in"}

**Map 4**

![](media/image5.png){width="6.649305555555555in"
height="8.608333333333333in"}

**Map 5**

![](media/image6.png){width="6.718055555555556in"
height="8.733333333333333in"}

**Map 6**

![](media/image7.png){width="6.705555555555556in"
height="8.705555555555556in"}

**Map 7**

![](media/image8.png){width="6.7in" height="8.709722222222222in"}

**Map 8**

![](media/image9.png){width="6.705555555555556in"
height="8.705555555555556in"}

**Map 9**

![](media/image10.png){width="6.55in" height="8.483333333333333in"}

**Map 10**

![](media/image11.png){width="6.594444444444444in"
height="8.541666666666666in"}

Table 1: Geographic Licensing Schemes

  ------------------------------- ----------------- ----------------------
  Geographic Licensing Schemes    Number of Market  Note
                                  Areas             

  **Basic Trading Areas (BTAs)**  **493**           **BTAs make up MTAs**

  **Major Trading Areas (MTAs)**  **51**            

  **Cellular Market Areas         **734**           **Also known as MSAs
  (CMAs)**                                          and RSAs**

  **Economic Areas (EAs)**        **175**           
  ------------------------------- ----------------- ----------------------

**Map11**

![](media/image12.png){width="6.49375in" height="8.403472222222222in"}

**Map 12**

![](media/image13.png){width="6.49375in" height="8.403472222222222in"}

**Map 13**

![](media/image14.png){width="6.49375in" height="8.403472222222222in"}

**Map 14**

![](media/image15.png){width="6.49375in" height="8.403472222222222in"}

APPENDIX G:

LIST OF COMMENTERS

[Comments]{.underline}

3G Americas LLC

CDMA Development Group

Cellular Telecommunications & Internet Association

Dobson Communications Corporation

Fred Williamson & Associates, Inc.

John A. Ball

Mobile Satellite Ventures Subsidiary LLC

Montana Telecommunications Association

National Telecommunications Cooperative Association

Rural Telecommunications Group

[Reply Comments]{.underline}

CDMA Development Group

Fred Williamson & Associates, Inc.

South Dakota Telecommunications Association

T-Mobile USA, Inc.

Virgin Mobile USA, LLC

Western Wireless Corporation

[*Ex Parte* Filings]{.underline}

Rural Telecommunications Group

Consumers Union

**SEPARATE STATEMENT OF**

**CHAIRMAN MICHAEL K. POWELL**

*Re: Annual Report and Analysis of Competitive Market Conditions With
Respect to Commercial Mobile Services (Eighth Report)*

The annual analysis of the CMRS market demonstrates how a lighter
regulatory hand has ushered in innovation and technological advancement,
and the power of facilities-based competition into the marketplace.
Today 95% of American consumers now have three or more choices in
wireless providers, and a stunning 71% have six or more choices. And
with this wealth of choices have come lower per minute prices and more
innovative services. The conclusion is inescapable: the wireless
industry is highly competitive. The Report, however, notes that rural
areas have fewer competitors than urban areas. I look forward to working
with my colleagues to develop policies that will enhance the
effectiveness of competition in rural areas by removing unnecessary
regulatory barriers to facilitating the deployment and delivery of
spectrum-based services in these areas. This is the most comprehensive
wireless competition report that the Commission has ever produced and I
applaud the efforts of the Wireless Bureau to update, verify, and
diversify our data to better capture the state of the marketplace.

**CONCURRING STATEMENT OF**

**COMMISSIONER MICHAEL J. COPPS**

*RE: Implementation of Section 6002(b) of the Omnibus Budget
Reconciliation Act of 1993; Annual Report and Analysis of Competitive
Market Conditions With Respect to Commercial Mobile Services.*

Congress requires the Commission annually to "review competitive market
conditions with respect to commercial mobile services" and "include in
its annual report an analysis of those conditions," in order to perform
an "analysis of whether or not there is effective competition." I
believe that the Commission could do far better. The Report's contains
insufficient data. Much of the limited data included are unverifiable
and are derived from sources with a stake in the outcome of our
determination. And the Commission does not establish any standard for
determining when "effective competition" exists or even to define what
"effective competition" is. These problems leave the Report vulnerable
to the charge of being results-oriented, and mean that the hard and good
work of the Commission's staff is underutilized.

The limited data that we do have show that in urban areas wireless
prices are dropping and carriers are expanding their networks. That's
great news, and I believe that better data and a better standard for
analyzing this data would yield results that would show that in many
areas the competition that characterizes the wireless market is
something to strive for as the FCC pursues wireline competition policy.
But half of the country is still served by three or fewer competitors.
And one quarter of all US counties have two or fewer competitors.

In this context, and because we need the ability to analyze competition
changes if wireless mergers occur, the nature and sources of our data
trouble me, especially in the Enron era, when the use of hard to verify
corporate data and Wall Street analysts' reports is under close
scrutiny. The Report is largely based on unverified corporate press
releases and advertisements, surveys conducted by industry lobbying
organizations, unverified Wall Street analysts' reports that may be
influenced by the stock holdings of those analysts' firms, SEC filings
that are not designed for this purpose, and newspaper reports.

I believe that the Commission must gather more independent, verified
data to do its job effectively. But the Commission does not gather any
of its own data for this report. To their credit, our staff recognized
the natural limitations of its data sources and generated some creative
solutions to counteract a subset of the inadequacies of the publicly
available sources. For instance, this year's Report was improved by data
from the Number Resource Utilization/ Forecast ("NRUF") database and the
ULS Database. Using these new sources of information, aside from
strengthening the integrity of the Report, underscores the reliability
and utility of data directly collected by the FCC, as opposed to data
generated by interested parties. But FCC-collected data is just not
available for most of the critical questions the Report addresses.

This year the Commission staff also tried to gather more information
through a NOI that asked for more data from our licensees. But as the
Report states, the Commission did not receive from licensees any new
data on subscribership, ARPU, usage, churn, or pricing, or maps of their
coverage areas. In other words, we asked industry to help us with our
effort and they said "no."

If industry will not assist us in this effort, I believe that the
Commission has a responsibility to contract with outside, independent
researchers to gather the following data. First, we need independent
data on wireless prices. We currently have no pricing data at all on
smaller markets, and rely instead on pricing in the most competitive,
biggest markets as a proxy for the least competitive, smallest markets.
This does not make sense. Second, we need reliable data on the number of
competitors in various markets. Today we treat an entire county as
served by a company if that company advertises that they serve any part
of the county, even just a highway skirting the edge of a county. We say
that consumers in a county have two competitors to choose from even if
the service areas of those competitors don't overlap at all in the
county. Again, this does not make sense. Third, we need independent,
annual data on quality of service. Quality of service, price and
investment are three critical indicia of competition, and we need to
understand all three. Specifically, we need data on dropped calls,
service unavailability, and poor connections. Without this basic
information, the Commission cannot make conclusions on competition that
withstand scrutiny.

I am not alone in thinking that we must improve. In April, the GAO
released a report that found that the Commission does not gather any
data on call quality despite its importance to consumers. The GAO Survey
states that the Commission must begin to include quality of service
analysis in it's competition report and that "\[d\]ata sources other
than consumer surveys would be useful in assessing the extent of mobile
phone quality problems; however, these data were either not available or
were of limited usefulness because they were not collected
systematically." I share the GAO's broad concern that our data
collection is inadequate and that we should make data on call quality
available to this public. If it is somehow too financially burdensome on
the Commission to gather adequate data, we should explain our plight to
Congress and ask for the needed budget resources. But this is too
important to ignore.

In considering the benefits of a more comprehensive and intensive data
gathering effort, I also want to note that the British regulatory agency
gathers far more information for the benefit of its wireless consumers
than does the FCC. While I am not at this time suggesting that we should
follow OFTEL's practice of requiring licensees to submit reports, as
part of its ongoing monitoring of competition in the British wireless
industry, OFTEL conducts quarterly surveys of mobile phone users. OFTEL
has used the information it collects on network performance and other
factors to determine whether there is effective competition among
carriers. We should find a way to gather similar data. If this is
somehow too financially burdensome on the Commission, we should explain
our plight to Congress and ask for the needed budget resources.

I also believe that we must establish a definition of "effective
competition" and a standard for determining when such competition
exists. How can we do the job Congress gave us without doing so?
Admirably, the Report includes a long list of possible indicia of
competition, including price, expansion of networks, investment levels,
churn, quality of service, subscriber growth, usage rates, and ARPU. But
merely listing possible relevant areas of inquiry is far different from
having a rigorous method of determining whether current market
characteristics mean that there is adequate competition. We don't say
whether one factor is more important than another, how they relate to
each other, or whether regional differences matter at all in the overall
competitive determination. Without more rigor, without an articulated
"effective competition" standard, the Report is of limited use in
providing an analytically solid foundation for Commission or
Congressional action.

Without adequate data and without a clear explanation of how we
determine adequate competition, I cannot support the reasoning contained
in this item, and must only concur in the result. I do want to thank the
Wireless Bureau staff, however, for another fine job this year. They
work hard, and do good work with the resources they have. The report is
very important, and your work is very important, which is why I focus so
much on it every year. Thank you.

[^1]: Commercial Mobile Services came to be known by the Commission as
    the Commercial Mobile Radio Services, or "CMRS." CMRS includes a
    large number of terrestrial services and some mobile satellite
    services. *See* 47 C.F.R. § 20.9(10).

[^2]: The Omnibus Budget Reconciliation Act of 1993, Pub. L. No. 103-66,
    Title VI, § 6002(b), amending the Communications Act of 1934 and
    codified at 47 U.S.C. § 332(c). As in the past, this report bases
    its analysis on a consumer-oriented view of wireless services by
    focusing on specific product categories, regardless of their
    regulatory classification. In some cases, this includes an analysis
    of offerings outside the umbrella of "services" specifically
    designated by the Commission as CMRS. However, because providers of
    these other services can compete with CMRS providers, the Commission
    believes that it is important to consider them in the analysis. As
    the Commission said, paraphrasing the Department of Justice/Federal
    Trade Commission guidelines on merger review, "When one product is a
    reasonable substitute for the other in the eyes of consumers, it is
    to be included in the relevant product market even though the
    products themselves are not identical." Application of Echostar
    Communications Corporation, General Motors Corporation, and Hughes
    Electronics Corporation (Transferors) and Echostar Communications
    Corporation (Transferee), *Hearing Designation Order*, 17 FCC Rcd
    20559, 20606 (2002).

[^3]: 47 U.S.C. § 332(c)(1)(C).

[^4]: *See* Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *First Report*, 10 FCC Rcd 8844 (1995) ("*First Report*");
    Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Second Report*, 12 FCC Rcd 11266 (1997) ("*Second
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Third Report*, 13 FCC Rcd 19746 (1998) ("*Third
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Fourth Report*, 14 FCC Rcd 10145 (1999) ("*Fourth
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Fifth Report*, 15 FCC Rcd 17660 (2000) ("*Fifth
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Sixth Report*, 16 FCC Rcd 13350 (2001) ("*Sixth
    Report*"); Implementation of Section 6002(b) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, *Seventh Report*, 17 FCC Rcd 12985 (2002) ("*Seventh
    Report*"). The reports can also be found on the FCC's website at
    \<http://wireless.fcc.gov/cmrs-crforum.html\>.

[^5]: This report, like the others before it, discusses CMRS as a whole
    because Congress called on the Commission to report on "competitive
    market conditions with respect to commercial mobile services." 47
    U.S.C. § 332(c)(1)(C). Any individual proceeding in which the
    Commission defines relevant product and geographic markets, such as
    an application for approval of a license transfer, may present facts
    pointing to narrower or broader markets than any used, suggested, or
    implied in this report.

[^6]: Implementation of Section 6002(B) of the Omnibus Budget
    Reconciliation Act of 1993, Annual Report and Analysis of
    Competitive Market Conditions with Respect to Commercial Mobile
    Services, WT Docket No. 02-379, *Notice of Inquiry*, 17 FCC Rcd
    24923 (2002) ("*NOI*").

[^7]: *See* Section B, Sources of Information, *infra.*

[^8]: 47 U.S.C. § 332 (c)(1)(C).

[^9]: *See* Appendix D, Table 4, at D-8.

[^10]: "Churn" refers to the number of customers an operator loses over
    a given period of time. *See* Section C.(v), Churn, *infra.*

[^11]: *See* Sections C.(v), Churn; II.c, Pricing Data and Trends; and
    C.(ix), Market Entry, *infra. See Seventh Report*, at 13007-13016.

[^12]: Implementation of Sections 3(n) and 332 of the Communications
    Act, GN Docket No. 93-252, *Second Report and Order*, 9 FCC Rcd
    1411, 1478 (1994); *see also*, 2000 Biennial Regulatory Review,
    *Report and Order*, 16 FCC Rcd 10647, 10653 (2001) (Commission
    determined that its forbearance analysis regarding the public
    interest need for complete detarrifing of international
    interexchange services by non-dominant carriers is applicable to
    CMRS providers of international interexchange services);
    Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, *Report and Order*, 15 FCC Rcd 13523 (2001)
    (In declining to adopt interconnection rule, the Commission
    acknowledged that it has not regulated CMRS providers as dominant
    carriers.).

[^13]: *See* Section C, Status of Competition, *infra.*

[^14]: *See Seventh Report*, at 13095; *Sixth Report*, at 13456; *Fifth
    Report*, at 17757-17758.

[^15]: *See* Section A, Background, *supra*.

[^16]: *NOI*, at 24927-24936.

[^17]: *Id.*, at 24927-24940.

[^18]: *Id.*, at 24926.

[^19]: *Id.*, at 24927-24930.

[^20]: *Id.*, at 24936-24937. *See also*, Facilitating the Provision of
    Spectrum-Based Services to Rural Areas and Promoting Opportunities
    for Rural Telephone Companies To Provide Spectrum-Based Services, WT
    Docket No. 02-381, *Notice of Inquiry*, 17 FCC Rcd 25554 (2002)
    ("*Rural NOI*") (Commission sought comment on whether and how it
    could modify its policies to promote the further development and
    deployment of spectrum-based services in rural areas).

[^21]: *NOI*, at 24926, 24940-24941, 24942-24948.

[^22]: *See* Appendix G for a list of parties that filed comments in
    response to the *NOI*.

[^23]: *See* Cellular Telecommunications & Internet Association, *NOI*
    *Comments*, at ii, 4-5 (filed Jan. 27, 2003) ("*CTIA Comments*");
    Dobson Communications Corporation, *NOI* *Comments*, at 3 (filed
    Jan. 27, 2003) ("*Dobson Comments*"); T-Mobile USA, Inc., *NOI*
    *Reply Comments*, at 1-2 (filed Feb. 11, 2003) ("*T-Mobile Reply
    Comments*"); South Dakota Telecommunications Association, *NOI*
    *Reply Comments*, at 5 (filed Feb. 11, 2003) ("*SDTA Reply
    Comments*").

[^24]: *See* *CTIA Comments*, at ii, 4-5; *Dobson Comments*, at 3;
    *T-Mobile Reply Comments*, at 1-2; *SDTA Reply Comments*, at 5.

[^25]: *See* Section II.e, Geographical Comparisons: Urban vs. Rural,
    *infra.*

[^26]: Information from these comments is included in the report in the
    following sections: 4, Satellite Operators; 2, Resellers; 3, Mobile
    Data; and 2, Network Technology, *infra*.

[^27]: *See* Wireless Telecommunications Bureau Announces Agenda and
    Speakers For Public Forum For The 7^th^ Annual Commercial Mobile
    Radio Services Competition Report, *Public Notice*, DA 02-422 (rel.
    Feb. 25, 2002). *See* FCC, *Commercial Mobile Radio Services (CMRS)
    Competition Report Public Forum,*
    \<http://wireless.fcc.gov/cmrs-crforum.html\> for access to
    participants' presentations and forum transcript. The direct link to
    the forum transcript is
    \<http://wireless.fcc.gov/services/cmrs/presentations/020228.pdf\>
    ("*Transcript*"). Forum participants not only provided additional
    data, including data on the average price of mobile telephone
    service in rural areas, but also presented suggestions on how to
    analyze data more effectively. Research organizations and agencies
    offered insight into the methodologies they use to gather and
    analyze data, and the wireless carriers offered anecdotes on the
    competitive pressures that their companies face. The Commission
    incorporated these data, suggestions, and insights into the *Seventh
    Report*. For instance, the *Seventh Report* included an analysis of
    the average number of providers operating in urban versus rural
    areas, using three different proxies for urban and rural geographic
    areas: Metropolitan Statistical Area ("MSA") and Rural Service Area
    ("RSA") counties, Economic Area ("EA") nodal and non-nodal counties,
    and counties with population densities above and below 100 persons
    per square mile. *See Seventh Report*, at 13022-23. For a
    description of nodal counties, *see* note Error: Reference source
    not found. As stated in the *Seventh Report*, the Commission does
    not have a statutory definition of what constitutes a rural area.
    However, it analyzed market entry using these three criteria in
    order to gain insight into the competitive differences within
    different geographic areas of the United States. *See Seventh
    Report*, at 13022. Section II.e, Geographical Comparisons: Urban vs.
    Rural, *infra*, includes the same type of analysis for this year's
    report.

[^28]: *See* Section II.c, Pricing Data and Trends, *infra.*

[^29]: For example, *see* note Error: Reference source not found,
    *infra*, for a discussion of data reported by CTIA.

[^30]: *See* Section C.(i), Subscriber Growth, *infra*, for a further
    discussion of NRUF data*.*

[^31]: *See* Sections C.(i), Subscriber Growth and C.(i), Paging,
    *infra*, for a detailed discussion. *See Seventh Report*, at 13005,
    13049.

[^32]: Rate centers are the geographic areas used by local exchange
    carriers as the primary basis for the determination of toll rates.
    *See* Harry Newton, [Newton's Telecom Dictionary: 16^th^ Expanded &
    Updated Edition]{.smallcaps}, CMP Books, July 2000, at 732.

[^33]: *See* Section C.(ii), Regional Penetration Rates, *infra*. EAs,
    which are defined by the Department of Commerce's Bureau of Economic
    Analysis, are particularly well-suited for comparing regional mobile
    telephony penetration rates for two reasons. First, the defining
    aspect of mobile telephony is, of course, mobility. Each EA is made
    up of one or more economic nodes and the surrounding areas that are
    economically related to the node. The main factor used in
    determining the economic relationship between the two areas is
    commuting patterns, so that each EA includes, as far as possible,
    the place of work and the place of residence of its labor force.
    Thus, an EA would seem to capture the market where the average
    person would use his or her mobile phone much of the time -- around
    work, around home, and all of the places in between. Second,
    wireless carriers have considerable discretion in how they assign
    telephone numbers across the rate centers in their operating areas.
    In other words, a mobile telephone subscriber can be assigned a
    phone number associated with a rate center that is a significant
    distance away from the subscriber's place of residence (but
    generally still in the same EA). *See Seventh Report*, at 13005.

[^34]: *See* Sections C.(ix), Market Entry and C.(viii), Coverage by
    Technology Type, *infra.*

[^35]: Basic Trading Areas ("BTAs") are Material Copyright (c) 1992 Rand
    McNally & Company. Rights granted pursuant to a license from Rand
    McNally & Company through an agreement with the Federal
    Communications Commission. BTAs are geographic areas drawn based on
    the counties in which residents of a given BTA make the bulk of
    their shopping goods purchases. Rand McNally's BTA specification
    contains 487 geographic areas covering the 50 states and the
    District of Columbia. For its spectrum auctions, the Commission
    added additional BTA-like areas for: American Samoa; Guam; Northern
    Mariana Islands; San Juan, Puerto Rico; Mayagüez/Aguadilla-Ponce,
    Puerto Rico; and the U.S. Virgin Islands.

[^36]: BTAs can be sub-divided into counties. The United States is made
    up of approximately 3,200 counties versus 493 BTAs.

[^37]: For a complete list of cellular and PCS licenses on a
    county-by-county basis, *see* FCC Wireless Telecommunications
    Bureau, *Broadband PCS Data*,
    \<http://wireless.fcc.gov/services/broadbandpcs/data/\>; FCC
    Wireless Telecommunications Bureau, *Cellular Services Data*,
    \<http://wireless.fcc.gov/services/cellular/data/\>.

[^38]: POPs is an industry term referring to population, usually the
    number of people covered by a given wireless license or footprint.
    One "POP" equals one person.

[^39]: *See* Section II.e, Geographical Comparisons: Urban vs. Rural,
    *infra*; *Seventh Report*, at 13024.

[^40]: *See* Section II.e, Geographical Comparisons: Urban vs. Rural,
    *infra. See also, Rural NOI*, at ¶ 25 ("\[I\]t may be economically
    inefficient, and thus harmful to consumers, to require for each
    wireless service the same number of competitors in urban and rural
    areas. This appears to be true, for example, with regard to mobile
    telephony.")

[^41]: *See Seventh Report*, at 13024.

[^42]: *Dobson Comments*, at 2.

[^43]: Fred Williamson and Associates, *NOI* *Reply Comments*, at 2
    (filed Feb. 11, 2003) ("*FWA Reply Comments*").

[^44]: *See Seventh Report*, at 13022-13024.

[^45]: Dobson Communications Corporation ("Dobson") stated, "Clearly, if
    price is an indicator of the level of competition, the price
    reductions spawned by wireless competition in urban markets have
    come to rural areas." *Dobson Comments*, at 3. Dobson also explained
    at the Public Forum that "small market carriers ... are subject to
    the same competitive pressures of large market carriers. Because of
    national advertising and the Internet, consumers all over the
    country are educated about nationwide rate plans and services
    enabled by digital technology." *Transcript*, at 115.

[^46]: Western Wireless Corporation, *NOI* *Comments*, at 6 (filed Feb.
    3, 2003).

[^47]: The scale and scope of such collection efforts will be dependent
    upon the availability of funding and the discretion of the
    Commission.

[^48]: For purposes of this report, mobile data service is considered to
    be the delivery of non-voice information to a mobile device. Two-way
    mobile data services include not only the ability to receive
    non-voice information on an end-user device but to send it from an
    end-user device to another mobile or landline device using wireless
    technology.

[^49]: For purposes of this report, the Commission defines mobile
    telephone operators as carriers that provide mobile voice and, in
    most cases, mobile data services using cellular, broadband PCS, and
    SMR spectrum.

[^50]: *See* Section 1, Mobile Telephony Overview and Analysis, *infra.*

[^51]: *See* Section 3, Mobile Data, *infra.*

[^52]: *See* Sections A, Spectrum Allocation and B, Network Overview,
    *infra.*

[^53]: "Increased service availability" refers to the increase in the
    population living in counties served by 3 or more, 4 or more, 5 or
    more, 6 or more, and 7 or more CMRS providers. *See* Section C.(ix),
    Market Entry, *infra.*

[^54]: *See* Appendix D, Table 1, at D-2.

[^55]: *See* Section C.(i), Subscriber Growth, *infra*.

[^56]: *Id.*

[^57]: Luiz Carvalho *et al.*, *A Look at Wireless Data: Don't Short
    SMS*, Morgan Stanley, Equity Research -- Wireless Telecom Services,
    Mar. 2, 2003, at 3 ("*Morgan Stanley Wireless Data Report*"). *See*
    Section II.a, Mobile Data Introduction, *infra*, for a further
    discussion.

[^58]: *See* Section II.a, Mobile Data Introduction, *infra.*

[^59]: *See* Appendix D, Table 5, at D-9; *Seventh Report*, at 13094.

[^60]: *See* Appendix D, Table 5, at D-9.

[^61]: *See* Section C.(viii), Coverage by Technology Type, *infra.*

[^62]: *See* Section II.c, Pricing Data and Trends, *infra*, for a
    detailed discussion of price competition.

[^63]: *Id.*

[^64]: Services involving the exchange of photo, video, animation, and
    audio files using a mobile phone are often collectively called MMS
    because customers are using another medium instead of or in addition
    to text to communicate or convey a message.

[^65]: *See* Section II.d, Services, Content, and Applications, *infra.*

[^66]: *Id.*

[^67]: *See* Section C.(ii), Text Messaging, *infra.*

[^68]: *See* Section C.(i), Paging, *infra.*

[^69]: *See* Section 1, Mobile Telephony Overview and Analysis, for a
    discussion of mobile voice services; and Section 3, Mobile Data, for
    a discussion of mobile data services.

[^70]: *See* Appendix F, Table 1 and Maps 11-14, at F-12 -- F-16, for
    descriptions and maps of various geographical licensing schemes
    employed by the Commission.

[^71]: *See*, *e.g.*, Promoting Efficient Use of Spectrum Through
    Elimination of Barriers to The Development of Secondary Markets,
    *Report and Order and Further Notice of Proposed Rulemaking*, FCC
    03-113 (adopted May 15, 2003).

[^72]: Under the original cellular licensing rules, one of the two
    cellular channel blocks in each market (the B block) was awarded to
    a local wireline carrier, while the other block (the A block) was
    awarded competitively to a carrier other than a local wireline
    incumbent. After awarding the first 30 MSA licenses pursuant to
    comparative hearing rules, the Commission adopted rules in 1984 and
    1986 to award the remaining cellular MSA and RSA licenses through
    lotteries. By 1991, lotteries had been held for every MSA and RSA,
    and licenses were awarded to the lottery winners in most instances.
    In some RSA markets, however, the initial lottery winner was
    disqualified from receiving the license because of a successful
    petition to deny or other Commission action. Implementation of
    Competitive Bidding Rules to License Certain Rural Service Areas,
    *Report and Order*, 17 FCC Rcd 1960, 1961-1962 (2002). In 1997, the
    Commission auctioned cellular spectrum in areas unbuilt by the
    original cellular licensees. *See* FCC, *Auction 12: Cellular
    Unserved* (visited Apr. 12, 2002)
    \<<http://wireless.fcc.gov/auctions/12/>\>. In 2002, the Commission
    auctioned three RSA licenses where the initial lottery winner had
    been disqualified. *See* FCC, *Auction 45: Cellular RSA* (visited
    Jun. 7, 2002)
    \<[http://wireless.fcc.gov/auctions/45/](http://wireless.fcc.gov/auctions/12/)\>.

[^73]: *See* Section C.(i), Subscriber Growth, *infra*.

[^74]: The first auction was for two license blocks of 30 megahertz
    each. *FCC Grants 99 Licenses For Broadband Personal Communications
    Services In Major Trading Areas,* News Release, FCC, Jun. 23, 1995.
    The Commission has had five additional broadband PCS auctions. *See*
    FCC, *Auctions Home* (visited Apr. 29, 2003)
    \<http://wireless.fcc.gov/auctions/\>. Three licenses were also
    awarded as part of a pioneer preference program in 1994. *Three
    Pioneer Preference PCS Applications Granted*, News Release, FCC,
    Dec. 14, 1994.

[^75]: *See* *Sixth Report*, at 13368. *See* *also,* Disposition of Down
    Payment and Pending Applications By Certain Winning Bidders in
    Auction No. 35; Requests for Refunds of Down Payments Made In
    Auction No. 35, *Order and Order on Reconsideration*, 17 FCC Rcd
    23354 (2002); and *Federal Communications Commission v. NextWave
    Personal Communications, et al*., 537 U.S. 293 (2003).

[^76]: The Commission's broadband PCS allocation includes 20 megahertz
    of spectrum at 1910 MHz - 1930 MHz for unlicensed broadband PCS.

[^77]: Major Trading Areas are Material Copyright (c) 1992 Rand McNally
    & Company. Rights granted pursuant to a license from Rand McNally &
    Company through an arrangement with the Federal Communications
    Commission. Rand McNally's MTA specification contains 47 geographic
    areas covering the 50 states and the District of Columbia. For its
    spectrum auctions, the Commission has added three MTA‑like areas:
    Guam and the Northern Mariana Islands, Puerto Rico and the U.S.
    Virgin Islands, and American Samoa. In addition, Alaska was
    separated from the Seattle MTA into its own MTA‑like area. MTAs are
    combinations of two or more BTAs. *See* note Error: Reference source
    not found for a description of BTAs.

[^78]: In June 1998, broadband PCS C block licensees were permitted to
    elect to disaggregate their licenses and return 15 megahertz of C
    block spectrum to the Commission. As a result, a number of licensees
    elected to disaggregate some or all of their licenses, creating some
    BTAs with seven broadband PCS spectrum licenses. *See* Amendment of
    the Commission's Rules Regarding Installment Payment Financing for
    Personal Communications Services (PCS) Licensees, *Second Report and
    Order and Further Notice of Proposed Rule Making*, 12 FCC Rcd 16436
    (1997); Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees, *Order on Reconsideration of the Second Report and
    Order*, 13 FCC Rcd 8345 (1998). In August 2000, the Commission
    decided to reconfigure each 30 megahertz C block license available
    for auction, beginning with Auction No. 35, into three 10 megahertz
    licenses. Amendment of the Commission's Rules Regarding Installment
    Payment Financing for Personal Communications Services (PCS)
    Licensees, *Sixth Report and Order and Order on Reconsideration*, 15
    FCC Rcd 16266, 16267 (2000).

[^79]: The "900 MHz" SMR band refers to spectrum allocated in the
    896-901 and 935-940 MHz bands; the "800 MHz" band refers to spectrum
    allocated in the 806-824 and 851-869 MHz bands. *See* 47 C.F.R.
    § 90.603; *see also* 47 C.F.R. § 90.7 (defining "specialized mobile
    radio system").

[^80]: The Commission has held multiple auctions for SMR licenses. FCC,
    *FCC Auctions* (visited Mar. 7, 2002)
    \<http://wireless.fcc.gov/auctions/\>.

[^81]: There are five megahertz in the 900 MHz band (200 paired channels
    x 12.5 kHz/channel). *See* 47 C.F.R. § 90.617, Table 4B. There are
    21.5 megahertz in the 800 MHz band: 14 megahertz in the 800 SMR
    Service (280 paired channels x 25 kHz/channel) and 7.5 megahertz in
    the 800 MHz General Category (150 paired channels x 25 kHz/channel).
    *See* 47 C.F.R. § 90.615, Table 1 (SMR General Category) and 47
    C.F.R. § 90.617, Table 4A (SMR Service). In 2000, the Commission
    amended its rules to allow Business and Industrial/Land
    Transportation licensees in the 800 MHz band to use their spectrum
    for CMRS operations under certain conditions. Implementation of
    Sections 309(j) and 337 of the Communications Act of 1934 as Amended
    Promotion of Spectrum Efficient Technologies on Certain Part 90
    Frequencies; Establishment of Public Service Radio Pool in the
    Private Mobile Frequencies Below 800 MHz; Petition for Rule Making
    of The American Mobile Telecommunications Association, *Report and
    Order and Further Notice of Proposed Rule Making*, 15 FCC Rcd 22709,
    22760-61 (2000). This could make up to five megahertz of additional
    spectrum available for digital SMR providers: 2.5 megahertz in the
    Industrial/Land Transportation Category (50 paired channels x 25
    kHz/channel) and 2.5 megahertz in the Business Category (50 paired
    channels x 25 kHz/channel). *See* 47 C.F.R. § 90.617, Tables 2A and
    3A.

[^82]: *Principles for Reallocation of Spectrum to Encourage the
    Development of Telecommunications Technologies for the New
    Millennium,* Policy Statement*,* 14 FCC Rcd 19868 (1999); *see also*
    Applications of Various Subsidiaries and Affiliates of Geotek
    Communications, Inc., Debtor-In-Possession, Assignors, and
    Wilmington Trust Company or Hughes Electric Corporation, Assignees,
    For Consent to Assignment of 900 MHz Specialized Mobile Radio
    Licenses, *Memorandum Opinion and Order*, 15 FCC Rcd 790, 802
    (2000).

[^83]: Dispatch services allow two-way, real-time, voice communications
    between fixed units and mobile units (*e.g.*, between a taxicab
    dispatch office and a taxi) or between two or more mobile units
    (*e.g.*, between a car and a truck). *See Fifth Report*, at
    17727-17728, for a detailed discussion. A number of providers
    continue to provide both commercial and private dispatch services at
    800 MHz, 900 MHz, 220 MHz, 217-219 MHz, and 450-470 MHz. *See*
    Applications of Motorola, Inc.; Motorola SMR, Inc.; and Motorola
    Communications and Electronics, Inc. Assignors; and FCI 900, Inc.,
    Assignee, For Consent to Assignment of 900 MHz Specialized Mobile
    Radio Licenses, *Order*, 16 FCC Rcd 8451 (2001) ("*Motorola
    Order*"). Dispatch and SMR are often used interchangeably, although
    SMR refers to specific spectrum ranges.

[^84]: *See* The Strategis Group, [The State of the SMR Industry: Nextel
    and Dispatch Communications]{.smallcaps} (Sept. 2000), at 57; The
    Strategis Group, [U.S. Dispatch Markets]{.smallcaps} (Jan. 2000),
    at 1. *See also* *Motorola Order*, at 8457.

[^85]: According to Nextel, "\[We are\] referred to as an 'SMR provider'
    . . ., although \[our\] services compete directly with and are
    regulated virtually identically to those of cellular and PCS
    providers." Nextel, Automatic and Manual Roaming Obligations
    Pertaining to Commercial Mobile Radio Services, WT Docket No.
    00-193, *Comments*, at note 4 (filed Jan. 5, 2001). However, in
    comparison with cellular and broadband PCS providers, digital SMR
    providers are more focused on the business than the individual
    consumer market. *See,* *e.g.,* Nextel Communications, Inc., SEC
    Form 10-Q, Nov. 14, 2000, at 16.

[^86]: *Id*., at 8462-8463.

[^87]: Yukari Iwatani, *Wireless Companies Turn to Walkie-Talkie
    Technology*, [Reuters]{.smallcaps}, Mar. 6, 2003; Elizabeth V.
    Mooney, *Carriers Up On Cash Flow, Push-To-Talk*, [RCR Wireless
    News]{.smallcaps}, Feb. 24, 2003, at 12.

[^88]: *See* Section II.c, CMRS Networks: Data-Only, *infra.*

[^89]: Some areas may have fewer than eight active licenses because
    certain auction winners or licensees have defaulted on payments to
    the Commission, because some licensees did not meet their buildout
    requirements, because some licensees returned their licenses, or
    because some licenses remained unsold in an auction.

[^90]: 47 C.F.R. § 24.714 (PCS); 47 C.F.R. § 22.948 (cellular); 47
    C.F.R. §§ 22.948, 90.813, and 90.911 (auctioned SMR). As a result of
    partitioning and disaggregation, there often are more than eight
    cellular and broadband PCS licenses in a market.

[^91]: No more than 10 megahertz of SMR spectrum was attributable to an
    entity under the cap. 47 C.F.R. § 20.6(b).

[^92]: 47 C.F.R. § 20.6(a).

[^93]: 2000 Biennial Regulatory Review Spectrum Aggregation Limits For
    Commercial Mobile Radio Services, *Report and Order*, 16 FCC Rcd
    22668 (2001), *petitions for reconsideration pending* ("*Spectrum
    Cap Order*"). The increase to 55 megahertz took effect February 13,
    2002. *See* 67 Fed. Reg. 1626 (Jan. 14, 2002). All license transfers
    are still subject to review by the Commission to determine whether
    they are in the public interest. *Spectrum Cap Order*, at
    22670-22671.

[^94]: *Spectrum Cap Order*, at 22669-22670.

[^95]: *See*, *e.g.*, 47 U.S.C. § 309(j)(3)(D) (Commission to promote
    efficient and intensive use of the electromagnetic spectrum).

[^96]: Reallocation and Service Rules for the 698-746 MHz Spectrum Band
    (Television Channels 52-59), GN Docket No. 01-74, *Notice of
    Proposed Rulemaking*, 16 FCC Rcd 7278, 7282 (2001).

[^97]: The Commission has allocated 24 megahertz of the Upper 700 MHz
    band for use by public safety entities, pursuant to Section 337(a)
    of the Communications Act. 47 U.S.C. § 337(a).

[^98]: *See* Reallocation and Service Rules for the 698-746 MHz Spectrum
    Band (Television Channels 52-59), GN Docket No. 01-74, *Report and
    Order*, 17 FCC Rcd 1022 (2002) ("*Lower 700 MHz Report and Order*");
    Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions
    to Part 27 of the Commission's Rules, WT Docket No. 99-168, *Third
    Report and Order*, 16 FCC Rcd 2703 (2001); Service Rules for the
    746-764 and 776-794 MHz Bands, and Revisions to Part 27 of the
    Commission's Rules, WT Docket No. 99-168, *Second Memorandum Opinion
    and Order*, 16 FCC Rcd 1239 (2001); Service Rules for the 746-764
    and 776-794 MHz Bands, and Revisions to Part 27 of the Commission's
    Rules, WT Docket No. 99-168, *Memorandum Opinion and Order and
    Further Notice of Proposed Rulemaking*, 15 FCC Rcd 20845 (2000);
    Service Rules for the 746-764 and 776-794 MHz Bands, and Revisions
    to Part 27 of the Commission's Rules, WT Docket No. 99-168, *Second
    Report and Order*, 15 FCC Rcd 5299 (2000) ("*Upper 700 MHz Second
    Report and Order*")*.*

[^99]: *See* *Lower 700 MHz Report and Order*, at 1024; *Upper 700 MHz
    Second Report and Order*, at 5301-2.

[^100]: *Id.*

[^101]: *Lower 700 MHz Report and Order*, at 1032.

[^102]: *Id.*, at 1028.

[^103]: *See* 47 U.S.C. § 309(j)(14)(A)-(B).

[^104]: Balanced Budget Act of 1997, Pub. L. No. 105-33, 111 Stat. 251 §
    3003 (1997) (adding new Section 309(j)(14) to the Communications Act
    of 1934, as amended); § 3007 (uncodified; reproduced at 47 U.S.C.
    § 309(j) note 3); Consolidated Appropriations Act, 2000, Pub. L. No.
    106-113, 113 Stat. 2502, App. E, § 213, 145 Cong. Rec. H12493-94
    (Nov. 17, 1999) ("Consolidated Appropriations Act"); 47 U.S.C. §
    309(j)(14)(C)(ii).

[^105]: Later, on May 24, 2002, the Commission announced that Auction
    No. 31 was postponed until January, 2003. Auction of Licenses in the
    747-762 and 777-792 MHz Band (Auction No. 31) Postponed Until
    January 14, 2003; Auction of Licenses in the 698-746 MHz Band
    (Auction No. 44) Will Proceed As Scheduled, *Public Notice*, FCC
    02-158, Report No. AUC-02-31-F (Auction No. 31) and AUC-02-44-D
    (Auction No. 44) (rel. May 24, 2002).

[^106]: Auction Reform Act of 2002, Pub. L. No. 107-195, 116 Stat. 715
    ("Auction Reform Act").

[^107]: 47 U.S.C. § 309(j)(15), as added by the Auction Reform Act.

[^108]: 47 U.S.C. § 309(j)(15)(C)(iii), as enacted by the Auction Reform
    Act.

[^109]: FCC, Auction 44: Lower 700 MHz Band, *Factsheet* (visited Mar.
    11, 2003) \<http://wireless.fcc.gov/auctions/44/factsheet.html\>.

[^110]: *Id.*

[^111]: *Lower 700 MHz Report and Order*, at 1061-1062.

[^112]: FCC, Auction 44: Lower 700 MHz Band, *Factsheet* (visited Mar.
    11, 2003) \<http://wireless.fcc.gov/auctions/44/factsheet.html\>.

[^113]: Based on data available at the Commission's Auction Form 175
    database, *available at*
    \<[http://auctionfiling.fcc.gov/form175/index.htm](http://auctionfiling.cc.gov/form175/index.htm)\>
    (last visited Mar. 12, 2002) ("*Form 175 Database*").

[^114]: Auction of Licenses in the Lower 700 MHz Band Scheduled for May
    28, 2003, *Public Notice*, DA 03-567 (rel. Mar. 4, 2003).

[^115]: Lower 700 MHz Band Auction Closes, *Public Notice*, DA 03-1978
    (rel. Jun. 18, 2003).

[^116]: *Id.*

[^117]: Auction Reform Act of 2002, *Report To Congress*, FCC 03-138
    (rel. Jun. 19, 2003).

[^118]: *See Seventh Report*, at 13040. *See* Section 2, Network
    Technology, *infra*, for a discussion of next-generation network
    technologies.

[^119]: Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, ET Docket No. 00-258, *Second Report
    and Order*, 17 FCC Rcd 23193 (2002).

[^120]: Service Rules for Advanced Wireless Services in the 1.7 GHz and
    2.1 GHz Bands, WT Docket No. 02-353, *Notice of Proposed
    Rulemaking*, 17 FCC Rcd 24135 (2002).

[^121]: Amendment of Part 2 of the Commission's Rules to Allocate
    Spectrum Below 3 GHz for Mobile and Fixed Services to Support the
    Introduction of New Advanced Wireless Services, including Third
    Generation Wireless Systems, ET Docket No. 00-258, *Third Report and
    Order, Third Notice of Proposed Rulemaking and Second Memorandum
    Opinion and Order*, 18 FCC Rcd 2223 (2003), *recon. pending*.

[^122]: Amendments to Parts 1, 2, 27 and 90 of the Commission's Rules to
    License Services in the 216-220 MHz, 1390-1395 MHz, 1427-1429 MHz,
    1429-1432 MHz, 1432-1435 MHz, 1670-1675 MHz, and 2385-2390 MHz
    Government Transfer Bands, WT Docket No. 02-8, *Report and Order*,
    17 FCC Rcd 9980 (2002).

[^123]: *Id*., at 9983.

[^124]: 1670-1675 MHz Band Auction Closes, *Public Notice*, DA 03-1472
    (rel. May 2, 2003).

[^125]: *See* Section 2, Network Technology, *infra.*

[^126]: PCS, digital SMR, and cellular networks are all "cellular"
    systems, since all divide service regions into many small areas
    called "cells." Cells can be as small as an individual building or
    as large as 20 miles across. Each cell is equipped with its own
    radio transmitter/receiver antenna. Service regions are divided into
    cells so that individual radio frequencies may be used over and over
    again in different cells ("frequency reuse"), allowing for more
    calls in the system. When a person makes a call on a wireless phone,
    the message is transmitted to the nearest antenna, which connects
    with the local wireline phone network or another wireless operator.
    When a person is using a wireless phone and approaches the boundary
    of one cell, the wireless network senses that the signal is becoming
    weak and automatically hands off the call to the antenna in the next
    cell. *See Sixth Report*, at 13361, note 55.

[^127]: *See Sixth Report*, at 13361.

[^128]: *See* Section C.(i), Subscriber Growth, *infra*.

[^129]: *See* note Error: Reference source not found for a discussion of
    the cellular analog requirement and its sunset.

[^130]: *See* *Seventh Report*, at 13011.

[^131]: For purposes of this report, all of the network technologies
    beyond 2G that carriers have deployed, as well as those that they
    plan to deploy in the future, are generally referred to as
    "next-generation network technologies." The International
    Telecommunication Union ("ITU") has defined 3G network technologies
    as those that can offer maximum data transfer speeds of 2 megabits
    per second ("Mbps") from a fixed location, 384 kbps at pedestrian
    speeds, and 144 kbps at traveling speeds of 100 kilometers per hour.
    *See Fifth Report*, at 17695. There is ambiguity among other
    industry players, however, as to which network technologies
    constitute 3G and which constitute interim technologies, often
    labeled "2.5G." *See Seventh Report*, at 13038. Therefore, the
    *Eighth Report* uses a more general label to describe all of the
    technologies beyond 2G.

[^132]: *See Seventh Report*, at 12990. This upgrade is also labeled
    GSM/GPRS because many TDMA/GSM carriers are upgrading their TDMA
    markets with GSM and GPRS simultaneously.

[^133]: *Id.*, at 13042-13043. T-Mobile USA, Inc. ("T-Mobile")
    advertises GPRS speeds of 56 kbps but also reports that its average
    GPRS user gets speeds around 40 kbps. AT&T Wireless Services, Inc.
    ("AT&T Wireless") reports that, during times of high usage, its GPRS
    users can download data at 20 to 30 kbps. 3G Americas states that
    GPRS's average, customer-experienced throughput is 30 to 40 kbps.
    *See* T-Mobile, *T-Mobile Internet Overview* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tmobile_internet/\>; *U.S. Carriers' New
    Wireless Networks Said to Barely Match Dial-Up Speeds,* CTIA Daily
    News, Dec. 6, 2002 (citing [ZDNet News]{.smallcaps}); 3G Americas
    LLC, *NOI* *Comments*, at 7 (filed Jan. 27, 2003) ("*3G Americas
    Comments*").

[^134]: *See* Section C.(vii), Technology Deployment, *infra.*

[^135]: *3G Americas Comments*, at 7. *See Seventh Report*, at 13044.

[^136]: *See Seventh Report*, at 12990.

[^137]: *Id.*, at 13042-13043. 3G Americas reports that 1xRTT's
    customer-experienced data rate is 30 to 70 kbps. *3G Americas
    Comments*, at 7. Sprint PCS reports its mobile data customers using
    its 1xRTT network get average speeds of 50-70 kbps. Sprint Corp.,
    SEC Form 10-K, Mar. 7, 2003, at 4.

[^138]: *See Seventh Report*, at 12990; CDMA Development Group, Inc.,
    *NOI Comments*, at 6 (filed Jan. 27, 2003) ("*CDG Comments*").
    CDMA2000 1xEV-DV provides a simultaneous voice and data upgrade and
    allows maximum data transfer speeds of 3.09 Mbps. *CDG Comments*, at
    6.

[^139]: *Monet Launches 1x EV-DO Service,* News Release, Monet Mobile
    Networks, Nov. 4, 2002.

[^140]: *See* 47 C.F.R. §§ 22.900, 24.200, 90.601.

[^141]: Sprint PCS is a division of Sprint Corp. ("Sprint"). *See*
    Sprint Corp., SEC Form 10-K, Mar. 4, 2002, at 3.

[^142]: Verizon Wireless is a joint venture of Verizon Communications,
    Inc. ("Verizon") and Vodafone Group PLC ("Vodafone"). Verizon owns
    55 percent of Verizon Wireless, and Vodafone owns 45 percent. *See*
    Verizon Communications, Inc., SEC Form 10-K, Mar. 20, 2002, at 10.

[^143]: T-Mobile USA, formerly known as VoiceStream Wireless Corp., is a
    wholly-owned subsidiary of Deutsche Telekom AG ("Deutsche Telekom").

[^144]: Cingular Wireless is a joint venture of SBC Communications, Inc.
    ("SBC") and BellSouth Corporation ("BellSouth"). *See* *Sixth
    Report*, at 13363-64.

[^145]: Colette M. Fleming *et al.*, *Wireless 411*, UBS Warburg, Equity
    Research, Jan. 22, 2003, at 15 ("*Wireless 411*").

[^146]: Generally, "footprint" is an industry term of art referring to
    the total geographic area in which a wireless provider offers
    service or is licensed to offer service.

[^147]: The Commission must consent to the transfer of control or
    assignment of all spectrum licenses used to provide wireless
    telecommunications services. 47 C.F.R. § 1.948.

[^148]: *See Fifth Report*, at 17699 (For a complete discussion of the
    motivations for this phenomenon, *see Fourth Report*, at
    10159-10160).

[^149]: *See Seventh Report*, at 12997. However, as we note in Section
    C.(ix), Market Entry, *infra*, slightly less than 50 percent of the
    geographic area of the country still is served by two or fewer
    carriers. Based in part on that statistic, in the *Rural NOI*, the
    Commission asked whether the use of small geographic licensing areas
    stimulates competition in the provision of wireless services to
    rural populations. It also asked if there was any evidence that
    smaller geographic areas will result in more rapid deployment of
    services and whether rural carriers are better positioned to serve
    the needs of rural America than nationwide carriers. *Rural NOI*, at
    ¶ 19.

[^150]: For a more complete discussion of the motivations for this
    phenomenon, s*ee Fourth Report*, at 10159-10160.

[^151]: *Verizon Wireless to Purchase From Northcoast Communications
    Spectrum Licenses Covering 50 U.S. Market*, News Release, Verizon
    Wireless, Dec. 19, 2002.

[^152]: *Id.*

[^153]: *Id.*

[^154]: *See* Northcoast, *Coverage Area* (visited Jun. 23, 2003)
    \<http://www.northcoastpcs.com/NewFiles/Coverage%20Area.html\>. Of
    the other five licenses, one was already being transferred to Triton
    PCS, Inc. ("Triton PCS") (*see* Application #0000967526, submitted
    July 7, 2002); the other four licenses were "closed" licenses from
    Auction 35, and as such Verizon Wireless was not eligible at that
    time to purchase them, if the company did want them (callsigns
    WPTS936, WPTS938, WPTS939, and WPTS941). *See* FCC, *Auction 35: C
    and F Block Broadband PCS Fact Sheet* (visited Mar. 17, 2003)
    \<http://wireless.fcc.gov/auctions/35/factsheet.html\>.

[^155]: Applications of Northcoast Communications, LLC and Cellco
    Partnership d/b/a Verizon Wireless For Consent to Assignment of
    Licenses, *Memorandum Opinion and Order*, DA 03-1102 (rel. Apr. 8,
    2003).

[^156]: Triton PCS holds a 39 percent interest in Lafayette. Triton PCS,
    Inc., SEC Form 10-K, Mar. 22, 2002, at 9.

[^157]: *Triton PCS Third-Quarter EBITDA Rises to a Record \$50.5
    Million EBITDA Margin Soars to 27.1%*, News Release, Triton PCS,
    Oct. 23, 2002; Triton PCS, Inc., SEC Form 10-K, Mar. 25, 2003, at 6.
    The Commission granted consent to the license transfers in September
    2002. Wireless Telecommunications Bureau Grants Consent To Assign C,
    E And F Block Broadband PCS Licenses, *Public Notice*, DA 02-2313
    (rel. Sept. 18, 2002); Wireless Telecommunications Bureau Assignment
    of Authorization and Transfer of Control Applications Action,
    *Public Notice*, DOC-226335 (rel. Sept 18, 2002).

[^158]: Triton PCS, Inc., SEC Form 10-K, Mar. 25, 2003, at 35.

[^159]: *Id.*

[^160]: Wireless Telecommunications Bureau Grants Consent to Assign C
    Block Broadband PCS Licenses, *Public Notice*, DA 03-1451 (rel. Apr.
    30, 2003).

[^161]: Triton PCS, Inc., SEC Form 10-K, Mar. 22, 2002, at 9.

[^162]: *AT&T Wireless, U.S. Cellular Swap Wireless Licenses, Markets*,
    News Release, AT&T Wireless, Mar. 10, 2003.

[^163]: Colette Fleming *et al.*, *US Cellular and AT&T Wireless Swap
    Properties*, UBS Warburg, Equity Research, Mar. 11, 2003, at 2.

[^164]: *Id.*

[^165]: *AT&T Wireless, U.S. Cellular Swap Wireless Licenses, Markets*,
    News Release, AT&T Wireless, Mar. 10, 2003.

[^166]: "\[US Cellular\] management said that the Florida markets
    involved in this transaction have \[AT&T Wireless\] markets
    surrounding it and that \[AT&T Wireless\] was a large contributor to
    the properties' revenues. \[US Cellular\] also said that the level
    of roaming in these markets was above the company average of roughly
    10% -12%." Colette Fleming *et al.*, *US Cellular and AT&T Wireless
    Swap Properties*, UBS Warburg, Equity Research, Mar. 11, 2003, at 2.

[^167]: *AT&T Wireless, U.S. Cellular Swap Wireless Licenses, Markets*,
    News Release, AT&T Wireless, Mar. 10, 2003.

[^168]: *See* *Seventh Report*, at 13001. The Wireless
    Telecommunications Bureau granted consent to the transaction on
    February 12, 2003. Wireless Telecommunications Bureau Grants Consent
    for the Full and Partial Assignment and Transfer of Control of
    Licenses to Implement GSM Corridor, LLC Joint Venture, *Public
    Notice*, DA 03-418 (rel. Feb. 12, 2003).

[^169]: *AT&T Wireless and Cingular Wireless Complete Joint Venture*,
    News Release, AT&T Wireless, Mar. 13, 2003.

[^170]:
    > *AT&T Wireless and Cingular Wireless Strike Accord Designed To
    > Lower Costs, Improve Quality and Encourage Expansion Of GSM/GPRS
    > Coverage Nationwide*, News Release, AT&T Wireless, Mar. 17, 2003.

[^171]: *AT&T Wireless and Sprint to Cooperate in the Construction of
    New Wireless Towers*, News Release, AT&T Wireless, Jan. 28, 2003.

[^172]: *Id.*

[^173]: *Id.*

[^174]: *Id.*

[^175]: *See Seventh Report*, at 13001.

[^176]: *T-Mobile Launches Wireless Service in California and Nevada*,
    News Release, T-Mobile, July 18, 2002; *Cingular Wireless Debuts in
    New York City*, News Release, Cingular, July 11, 2002.

[^177]: *See* Section C.(ii), Wireless Alternatives, *infra*, for a
    discussion of Leap's service offerings.

[^178]: *Leap Moves to Reorganize Capital Structure*, News Release,
    Leap, Apr. 14, 2003. On May 23, 2003, Leap filed its amended Plan of
    Reorganization with the bankruptcy court.

[^179]: Leap Wireless International, Inc., SEC Form 10-K/A, Apr. 16,
    2003, at 56-57. Debt level is as of December 30, 2002.

[^180]: *Leap Moves to Reorganize Capital Structure*, News Release,
    Leap, Apr. 14, 2003.

[^181]: *Id.*

[^182]: *Leap Files for Chapter 11 Bankruptcy*, [San Diego
    Daily]{.smallcaps}, Apr. 14, 2003; Mike Dano, *Rollercoaster
    Continues for Carriers*, [RCR Wireless News]{.smallcaps}, Dec. 16,
    2002, at 1.

[^183]: *NTELOS Takes Another Step Toward Comprehensive Financial
    Restructuring Plan*, News Release, Ntelos, Mar. 4, 2003.

[^184]: *NTELOS in Active Discussions with Debtholders*, News Release,
    Ntelos, Feb. 18, 2003.

[^185]: *Id.*

[^186]: *NTELOS Takes Another Step Toward Comprehensive Financial
    Restructuring Plan*, News Release, Ntelos, Mar. 4, 2003.

[^187]: *AirGate PCS Subsidiary iPCS, Inc. Files Chapter 11
    Reorganization Proceeding*, News Release, AirGate, Feb. 24, 2003.

[^188]: *See* *Seventh Report*, at 12999.

[^189]: *AirGate PCS, Inc. Announces Stockholder Approval of Merger With
    iPCS, Inc*., News Release, AirGate, Nov. 27, 2001; *AirGate PCS,
    Inc. Completes Merger With iPCS, Inc.; Combined Company Guidance
    Provided for First Fiscal Quarter of 2002*, News Release, AirGate,
    Nov. 30, 2001.

[^190]: Mary Greczyn, *Nextwave Seeks Court Approval for Partnership to
    Buy Spectrum*, [Communications Daily]{.smallcaps}, Jun. 2, 2003, at
    4; *Cingular Could Be First at Nextwave Spectrum Trough,* [Wireless
    Data News]{.smallcaps}, Jun. 4, 2003.

[^191]: *Verizon Communications Reports Strong Yearly Operational Growth
    and Gives Outlook for 2003*, News Release, Verizon, Jan. 29, 2003.

[^192]: *See* Verizon Wireless, LLC, SEC Form S-1, filed Aug. 24, 2000.

[^193]: *Verizon Communications Reports Strong Yearly Operational Growth
    and Gives Outlook for 2003*, News Release, Verizon, Jan. 29, 2003.

[^194]: *See* Section C.(ii), Roaming, *infra*.

[^195]: *See*, *e.g.*, Nextel, Automatic and Manual Roaming Obligations
    Pertaining to Commercial Mobile Radio Services, WT Docket No.
    00-193, *Comments*, at note 20 (filed Jan. 5, 2001) ("To facilitate
    rapid deployment of its network throughout suburban, tertiary and
    rural areas of the country and move towards more ubiquitous
    nationwide service, Nextel entered into an agreement with Nextel
    Partners . . . to construct iDEN coverage using Commission licensed
    frequencies disaggregated by Nextel to \[Nextel Partners\], and
    offering its services to the public under the Nextel brand according
    to strict service quality standards.").

[^196]: In addition, AT&T Wireless has close relationships with a number
    of other operators. AT&T Wireless and Dobson own equal interests in
    a joint venture, ACC Acquisitions, LLC ("ACC"), which provides
    service primarily in rural and suburban areas of the midwestern and
    eastern United States. Dobson Communications Corporation, SEC Form
    10-K, Apr. 1, 2002, at 72. Dobson operates the ACC markets under the
    brand name Cellular One. Dobson Communications Corporation, SEC Form
    10-K, Apr. 1, 2002, at 3, 8. AT&T Wireless owns approximately 12
    percent of Dobson. On December 2002, as part of a license swap with
    Dobson, AT&T Wireless agreed to transfer to Dobson its shares of
    Dobson Series AA preferred stock, which AT&T Wireless Services
    purchased in February 2001. Without the preferred stock, AT&T
    Wireless's ownership in Dobson will drop from approximately 12.7
    percent to 5.0 percent. AT&T Wireless Services, Inc., SEC Form 10-K,
    filed Mar. 25, 2003, at 108, 112. Cincinnati Bell Wireless, LLC
    ("Cincinnati Bell Wireless") is a joint venture of Broadwing, Inc.
    ("Broadwing") and AT&T Wireless, in which AT&T Wireless owns 19.9
    percent and Broadwing owns the remaining 80.1 percent. Broadwing,
    Inc., SEC Form 10-K, Mar. 31, 2003, at 6. Cincinnati Bell Wireless
    services are sold under the Cincinnati Bell Wireless brand name.
    AT&T Wireless also has interests in a number of other broadband PCS
    licensee holders, including Cascade Wireless, LLC (85 percent),
    Lewis & Clark Communications, LLC (49.9 percent), and Alaska Native
    Wireless, LLC (38.2 percent). AT&T Wireless, FCC Form 602 (filed
    Mar. 10, 2003).

[^197]: AT&T Wireless owns 15.7 percent of Triton PCS and 40 percent of
    Edge. AT&T Wireless, FCC Form 602 (filed Mar. 10, 2003).

[^198]: Suncom, *Suncom Fact Sheet* (visited Mar. 19, 2003)
    \<http://www.suncom.com/pr_news/index.html\>.

[^199]: *Triton PCS First-Quarter EBITDA More Than Triples to \$36
    Million; EBITDA Margin Rises to 23.7%; Revenue Increases 40% While
    Churn Declines to 1.88*, News Release, Triton PCS, May 8, 2002; Sue
    Marek, *Creating Rural E911 Solutions*, [Wireless Week]{.smallcaps},
    Jun. 3, 2002, at 38.

[^200]: For a comparison of the affiliate arrangements of AT&T, Nextel,
    and Sprint PCS, *see* Luiz Carvalho *et al.*, *Triton PCS*, Morgan
    Stanley, Equity Research, Mar. 5, 2003, at 2 (Exhibit 1: Difference
    Among the Affiliates).

[^201]: Nextel Partners, Inc., SEC Form 10-K, Mar. 22, 2002, at 4.
    Nextel owns 32 percent of Nextel Partners. Nextel, FCC Form 602
    (filed Jan. 1, 2003).

[^202]: Nextel Partners, Inc., SEC Form 10-K, Mar. 22, 2002, at 3.

[^203]: Five are public companies and five are privately-held. Cannon
    Carr *et al.*, *Avoiding the Hotel California: An Equity /High Yield
    Wireless Weekly*, CIBC World Markets, Apr. 7, 2003, at 4.

[^204]: *See*, *e.g.*, US Unwired Inc., SEC Form 4249(B)(1), May 17,
    2000, at 7. In addition, Sprint PCS affiliate Horizon PCS has an
    agreement with Ntelos where Ntelos committed to build and maintain a
    network in certain markets and provide service at wholesale rates to
    Horizon PCS. *See* Ric Prentiss, *Ntelos*, Raymond James &
    Associates, Equity Research, Dec. 27, 2001, at 19-20. In March 2002,
    Ntelos CEO James Quarforth characterized the arrangement as a
    "network-sharing agreement." Sue Marek, *Auction Winners Turn
    Spectrum Into Cash*, [Wireless Week]{.smallcaps}, Mar. 18, 2002, at
    1.

[^205]: Sprint PCS said it received \$160 million in affiliate fees
    during 2002. Linda J. Mutschler *et al*., *Sprint PCS*, Merrill
    Lynch, Equity Research, Feb. 6, 2003, at 3.

[^206]: Ric Prentiss, *Sprint PCS*, Raymond James, Equity Research, Feb.
    19, 2002, at 4. Sprint PCS says it received \$260 million in such
    payments in 2002. Linda J. Mutschler *et al*., *Sprint PCS*, Merrill
    Lynch, Equity Research, Feb. 6, 2003, at 3.

[^207]: *Sprint Reports Fourth Quarter and Full-Year 2002 Results*, News
    Release, Sprint PCS, Feb. 15, 2003 (data from accompanying related
    tables, *Sprint Corporation PCS Group: Net Customer Additions*
    (visited Mar. 19, 2003)
    \<http://www.sprint.com/sprint/ir/fn/qe/4q02.pdf\>).

[^208]: Carriers began reporting NRUF data biannually beginning with the
    period ending June 2000. In addition, the Commission's local
    competition and broadband data gathering program, adopted in March
    2000, provides more data on mobile subscribership. The FCC requires
    mobile wireless carriers with over 10,000 facility-based subscribers
    in a state to report the number of their subscribers in those states
    twice a year to the Commission. In their December 31, 2002 filings,
    operators reported that they served 136 million subscribers. *See*
    Appendix D, Table 2, at D-3. However, the Commission recognizes that
    its reporting rules result in some level of undercount of total
    industry subscribers since it does not count subscribers served by
    mobile telephony providers in states where the provider has fewer
    than 10,000 customers. *See* Local Competition and Broadband
    Reporting, *Report and Order*, 15 FCC Rcd 7717, 7743 (2000).

[^209]: When the North American Numbering Plan ("NANP") was established
    in 1947, only 86 area codes were assigned to carriers in the United
    States. Only 61 new codes were added during the next 50 years. But
    the rate of activation has increased dramatically since then.
    Between January 1, 1997 and December 31, 2000, 84 new codes were
    activated in the United States. Because the remaining supply of
    unassigned area codes is dwindling, and because a premature exhaust
    of area codes imposes significant costs on consumers, the Commission
    has taken a number of steps to ensure that the limited numbering
    resources are used efficiently. Among other things, the Commission
    requires carriers to submit data on numbering resource utilization
    and forecasts twice a year. Federal Communications Commission*,
    Numbering Resource Utilization in the United States as of June 30,
    2001* (Nov. 2001), at 1, 2. This information is submitted to the FCC
    on Form 502. *Id.*

[^210]: Federal Communications Commission*, Numbering Resource
    Utilization in the United States as of June 30, 2001* (Nov. 2001),
    at 1, 2. An assigned number is one that is in use by an end-user
    customer. Federal Communications Commission*, Numbering Resource
    Utilization in the United States as of June 30, 2001* (Nov. 2001),
    at 3. Carriers also report other phone number categories, including:
    intermediate -- numbers given to other companies; aging -- numbers
    held out of circulation; administrative -- numbers for internal
    uses; reserved -- numbers reserved for later activation; and
    available -- numbers available to be assigned. *Id*. Assigned
    numbers are not necessarily from facilities-based carriers. A
    reseller can assign a number to an end user. This does not
    double-count in the assigned total, since the facilities-based
    carrier only counts that number as an "intermediate" number given to
    the reseller. *Id.*

[^211]: *See* CTIA, *Wireless Industry Indices: Semi-Annual Data Survey
    Results* (results through December 2002) ("*Dec 2002 CTIA Survey*").
    The CTIA effort is a voluntary survey of both its member and
    non-member facilities-based providers of wireless service. CTIA asks
    majority owners of corporations to report information for the entire
    corporation, which helps eliminate double counting. To encourage
    honest reporting, the surveys are tabulated by an independent
    accounting firm under terms of confidentiality and are later
    destroyed. CTIA receives only the aggregate, national totals. Not
    all wireless carriers submit surveys, however. In order to develop
    an estimate of total U.S. wireless subscribership, CTIA identifies
    the markets which are not represented in the survey responses. Then,
    CTIA uses third-party estimates or extrapolates from surrogate
    and/or historical data to create an estimate of subscribership for
    those markets. *CTIA Comments*, at 3; *see also*, *Dec 2002 CTIA
    Survey*, at 17-21.

[^212]: The advantages of NRUF data over CTIA's survey are discussed in
    the *Seventh Report*, at 13004.

[^213]: FCC, based on preliminary year-end 2002 filings for Numbering
    Resource Utilization in the United States.

[^214]: The nationwide penetration rate is calculated by dividing total
    mobile telephone subscribers by the total U.S. population. According
    to the Bureau of the Census, the combined population of the 50
    states, the District of Columbia, and Puerto Rico as of July 1, 2002
    was estimated to be 292.2 million. *See* U.S. Census Bureau,
    *Population Estimates* (visited Mar. 18, 2003)
    \<http://eire.census.gov/popest/estimates.php \>.

[^215]: The number of subscribers refer to the number of separate
    wireless accounts. A particular individual may have more than one
    wireless account.

[^216]: *See Seventh Report*, at 13005. The difficulty in acquiring new
    subscribers can be seen in that two nationwide operators, both for
    the first time, had quarters in 2002 in which they experienced net
    losses in subscribers. [Communications Daily]{.smallcaps}, Oct. 29,
    2002, at 5. In the third quarter, Sprint PCS lost 78,000 customers,
    while Cingular lost 107,000 customers in the third quarter and an
    additional 151,000 customers in the fourth quarter. Both companies
    still had positive net subscriber growth for the year. Luiz Carvalho
    *et al.*, *Wireless Tracker: Results Speak the Loudest*, Morgan
    Stanley, Equity Research, Mar. 17, 2003, at 25.

[^217]: *See* Appendix D, Table 1, at D-2.

[^218]: *Id*.

[^219]: *See*, *e.g.*, Luiz Carvalho *et al.*, *3Q02 Preview: Subs Slow,
    Cash Grows*, Morgan Stanley, Equity Research, Oct. 9, 2002, at 3
    ("top line growth of the industry is slowing significantly as the
    industry focuses more on profitability than on revenue or subscriber
    growth"). *See* *also*, Section C.(vi), Capital Expenditures,
    *infra*. One analyst argues subscriber growth is slowing due to the
    high cost of acquiring new customers (cost per gross addition, or
    "CPGA"): "\[U\]ntil operators can lower their cost to add a new
    subscriber, it will not be profitable for the operators to go after
    the lower ARPU or high credit risk customers. As the United States
    nears 50% penetration, it could easily be argued that the
    incremental subscriber is probably less valuable than the customers
    that already have wireless service." Colette Fleming *et al.*, *3Q02
    Wireless 411 -- Outlook*, UBS Warburg, Equity Research, Jan. 23,
    2003, at 1.

[^220]: Linda Mutschler *et al.*, *The US Wireless Matrix*, Merrill
    Lynch, Equity Research, Mar. 19, 2003, at 15 ("*ML Matrix*"). CTIA
    found a similar rate: Almost 89 percent of subscribers of responding
    carriers in its YE2002 survey were digital (CTIA does not estimate
    the digital percentage for its total estimate of subscribers). CTIA,
    *Digital Migration Keeps a Steady Pace* (visited Mar. 19, 2003)
    \<http://www.wow-com.com/images/survey/2003/752x571/Digital_Migration_2002_Slide_9.gif\>.

[^221]: Based on *ML Matrix* digital penetration rates.

[^222]: Subscribers that can access both the digital and analog networks
    of carriers are considered to be digital subscribers.

[^223]: NRUF data is collected by the area code and prefix (NXX) level
    for each carrier, which enables the Commission to approximate the
    number of subscribers that each carrier has in each of the
    approximately 20,000 rate centers in the country. Rate center
    boundaries generally do not coincide with county boundaries.
    However, for purposes of geographical analysis, the rate center data
    can be associated with a geographic point, and all of those points
    that fall within a county boundary can be aggregated together and
    associated with much larger geographic areas based on counties, for
    which population and other data exists. Aggregation to larger
    geographic areas reduces the level of inaccuracy inherent in
    combining unlike areas such as rate center areas and counties.

[^224]: There are 172 EAs, each of which is an aggregation of counties.
    *See* Kenneth P. Johnson, *Redefinition of the BEA Economic Areas*,
    [Survey Of Current Business]{.smallcaps}, Feb. 1995, at 75. For its
    spectrum auctions, the FCC has defined four additional EAs: Guam and
    the Northern Mariana Islands (173); Puerto Rico and the U.S. Virgin
    Islands (174); American Samoa (175); and Gulf of Mexico (176). *See*
    FCC, *FCC Auctions: Maps* (visited Mar. 25, 2002)
    \<http://wireless.fcc.gov/auctions/data/maps.html\>.

[^225]: Kenneth P. Johnson, *Redefinition of the BEA Economic Areas*,
    [Survey Of Current Business]{.smallcaps}, Feb. 1995, at 75.

[^226]: According to one analyst, wireless carriers assign numbers so as
    to minimize the access charges paid to local wireline companies.
    *See* Linda Mutschler *et al.*, *Wireless Number Portability*,
    Merrill Lynch, Equity Research, Jan 9, 2003, at 8 ("For wireless
    operators, the standard practice is to aggregate phone numbers
    within the same area code onto the same or several rate centers,
    whose physical locations would result in the least amount of access
    charges paid to ILECs. Therefore, in each market, wireless operators
    are present in only a small number of rate centers. According to our
    industry sources, this percentage is probably below 20%, and could
    be meaningfully lower than 20%.").

[^227]: "Once the NPA-NXX (i.e., 212-449) is assigned to the wireless
    carrier, the carrier may select any one of its NPA-NXXs when
    allocating that number to a particular subscriber. Therefore, with
    regard to wireless, the subscriber's physical location is not
    necessarily a requirement in determining the phone number assignment
    -- which is very different from how wireline numbers are assigned."
    Linda Mutschler *et al.*, *US Wireless Services:* *Wireless Number
    Portability -- Breaking Rules*, Merrill Lynch, Equity Research, Feb.
    28, 2003, at 3.

[^228]: *See also,* Appendix F, Map 4, at F-5.

[^229]: Luiz Carvalho *et al.*, *Wireless Pricing: Better Days Ahead*,
    Morgan Stanley, Equity Research, Mar. 3, 2003, at 7.

[^230]: *See* *also*, Linda Mutschler *et al.*, *The Next Generation
    VII*, Merrill Lynch, Equity Research, Feb. 21, 2003, at 28-29, 38-42
    ("*NextGen VII*").

[^231]: *Dec 2002 CTIA Survey*, at 208. CTIA aggregated all of the
    carriers' MOUs from July 1 through December 31, then divided by the
    average number of subscribers, and then divided by six.

[^232]: Paul Kagan Associates, Inc., *Average Subscriber Talks 500
    Minutes/Month*, [Wireless Market Stats]{.smallcaps}, Sept. 25, 2002,
    at 8 (weighted average, based on carriers' reported MOUs, included
    Canadian operators).

[^233]: Dennis K. Berman, *We May Be Reaching Limit For Yakking on Our
    Phones*, [Wall Street Journal Online]{.smallcaps}, Dec. 23, 2002
    (citing J.D. Power and Associates); *Wireless Phone Penetration
    Among U.S. Households Climbs Above 50 Percent As More First-Time
    Subscribers Enter the Marketplace*, News Release, J.D. Power and
    Associates, Sept. 26, 2001 (based on survey responses from 14,492
    households in 25 of the largest U.S. markets).

[^234]: *Wireless 411*, at 56.

[^235]: *Id.*, at 52.

[^236]: *See* Appendix D, Table 1, at D-2. There are different ways of
    calculating ARPU. The measure used here, CTIA's "average local
    monthly bill," does not include toll or roaming revenues (CTIA calls
    it "the equivalent of 'local ARPU'"). *Dec 2002 CTIA Survey*, at
    184. CTIA defines an alternative measure of ARPU, which includes
    roaming revenues but not toll revenue. For a comparison between
    these two measures, *see* *Dec 2002 CTIA Survey*, at 185. *See*
    *also*, Linda J. Mutschler *et al*., *Wireless Services: What Is
    Included in ARPU?*, Merrill Lynch, Equity Research, Jan. 24, 2003,
    for a discussion of what nationwide operators include in their
    estimates of ARPU. For most nationwide carriers, reported ARPU
    consists of roughly 70 to 80 percent monthly access fees, with
    overage and other fees (such as late fees, roaming, data/text
    messaging, long distance, and various regulatory fees) making up the
    rest.

[^237]: *See* Section II.c, Pricing Data and Trends, *infra*.

[^238]: Regardless of whether customers use the large bundles of minutes
    included with such plans, the higher monthly access fees increase
    operators' ARPU figures.

[^239]: This assumes that each churned customer is a unique individual
    and that the same customers do not churn multiple times.

[^240]: Paul Kagan Associates, Inc., *Churn Up For Four of Six National
    Carriers*, [Wireless Market Stats]{.smallcaps}, Dec. 12, 2002, at 4.
    In the third quarter of 2002, churn increased for three of the
    nationwide carriers, as Sprint PCS dealt with non-paying Clear Pay
    subscribers, and AT&T Wireless and Cingular disconnected WorldCom
    subscribers from their bases. Luiz Carvalho *et al*., *Wireless
    Tracker: Cash Flow Matters Most*, Morgan Stanley, Equity Research,
    Dec. 11, 2002, at 7. *See* Section 2, Resellers, *infra*.

[^241]: Paul Kagan Associates, Inc., *Churn Up For Four of Six National
    Carriers*, [Wireless Market Stats]{.smallcaps}, Dec. 12, 2002, at 4
    (average includes Canadian operators).

[^242]: Colette M. Fleming *et al.*, *Wireless 411*, UBS Warburg, Equity
    Research, Jun. 2, 2003, at 28.

[^243]: *See Sixth Report*, at 13372-73; *Seventh Report*, at 13007.

[^244]: Dan Meyer, *More Satisfied Users, But Customer Care Remains Lead
    Complaint*, [RCR Wireless News]{.smallcaps}, Jun. 10, 2002, at 18
    (citing Yankee Group).

[^245]: *Id.*

[^246]: Jay Lyman, *Switching Cell Phone Providers -- Why Bother?*,
    [Wireless NewsFactor]{.smallcaps}, Oct. 15, 2002 (citing Roger
    Entner of Yankee Group).

[^247]: CNNMoney, *Money 101 Glossary* (visited Mar. 20, 2003)
    \<http://money.cnn.com/services/glossary/c.html.\>. There are
    differing opinions on what constitutes capital spending versus
    non-capital spending.

[^248]: Verizon Wireless says that capacity capex now represents more
    than 50 percent of the company's total capex. Luiz Carvalho *et
    al.*, *Wireless Capex Conference Supports Thesis*, Morgan Stanley,
    Equity Research, Feb. 4, 2003, at 3. Sprint PCS also finds usage
    growth to be the main driver of capex. Luiz Carvalho *et al.*,
    *Wireless Capex Conference Supports Thesis*, Morgan Stanley, Equity
    Research, Feb. 4, 2003, at 2.

[^249]: Simon Flannery, Luiz Carvalho *et al.*, *US Telecom Team
    Quarterly Results Preview and \'03 Outlook*, Morgan Stanley, Equity
    Research -- Industry Report, Jan. 13, 2003, at 19; Ric Prentiss *et
    al.*, *4Q02 Wireless Preview: Holiday Punch Has Indeed Gone Flat*,
    Raymond James & Associates, Equity Research, Jan. 21, 2003, at 2.
    Since 1996, capital spending on wireless networks has grown at
    nearly three times the rate of growth of spending on wireline.
    Health of the Telecommunications Sector: A Perspective from
    Investors and Economists, before the House Subcommittee on
    Telecommunications and the Internet, 108 Cong. (Feb. 5, 2003)
    (statement of Blake Bath, Managing Partner, Lehman Brothers).

[^250]: Ric Prentiss *et al.*, *4Q02 Wireless Preview: Holiday Punch Has
    Indeed Gone Flat*, Raymond James & Associates, Equity Research, Jan.
    21, 2003, at 2.

[^251]: Luiz Carvalho *et al.*, *Wireless Tracker: Cash Flow Matters
    Most*, Morgan Stanley, Equity Research, Dec. 11, 2002, at 6.

[^252]: *Id.*

[^253]: *NextGen VII*, at 49. *See* *also*, Reinhardt Krause, *AT&T
    Wireless Says It's Slashing Capital Spending By 40%*, [Investor's
    Business Daily]{.smallcaps}, Jan. 29, 2003 ("By cutting capital
    spending, \[AT&T Wireless\] expects to become free cash flow
    positive in 2003").

[^254]: In addition, all operators using cellular spectrum must deploy
    AMPS, an analog technology, throughout the part of their networks
    using cellular spectrum. *See* 47 C.F.R. §§ 22.901, 22.933. In 2002,
    the Commission decided to eliminate the requirement after a
    five-year transition period. Year 2000 Biennial Regulatory Review --
    Amendment of Part 22 of The Commission's Rules to Modify or
    Eliminate Outdated Rules Affecting The Cellular Radiotelephone
    Service and Other Commercial Mobile Radio Services, *Report and
    Order*, 17 FCC Rcd 18401, 18414 (2002).

[^255]: *See* Section C.(x), Quality of Service, *infra*, for a
    discussion of the relationship between technology deployment and
    service quality.

[^256]: *See Seventh Report*, at 13042-13044.

[^257]: *See* Section II.c, CMRS Networks: Data-Only, *infra*, for a
    discussion of Monet Mobile's data only service offered over its
    1xEV-DO network.

[^258]: Among the other major carriers, Nextel has overlaid its iDEN
    network with a packet network in order to offer data services but
    has not committed to deploying one of the two major next-generation
    technology migration paths. *See* Nextel Communications, Inc., SEC
    Form 10-K, Mar. 27, 2003, at 2, 6. Furthermore, ALLTEL is planning
    to upgrade its CDMA network to 1xRTT, but has not yet launched
    service using the technology. *See* Dan Meyer, *Regional Players to
    Use Customer Service to Outshine in Data Sell*, [RCR Wireless
    News]{.smallcaps}, Oct. 14, 2002, at 8.

[^259]: *See Seventh Report*, at 13043, note 400; AT&T Wireless
    Services, Inc., SEC Form 10-K, Mar. 25, 2003, at 3.

[^260]: AT&T Wireless Services, Inc., SEC Form 10-K, Mar. 25, 2003, at
    3.

[^261]: *Id.*

[^262]: *AT&T Wireless, NTT DoCoMo Outline Plans for Targeted Rollout of
    W-CDMA Services*, [Business Wire]{.smallcaps}, Dec. 25, 2003. AT&T
    Wireless had previously announced that it planned to launch service
    over WCDMA networks in 13 U.S. cities during 2004. *Id. See also*
    AT&T Wireless Services, Inc., SEC Form 10-K, Mar. 25, 2003, at 4.

[^263]: Cingular Wireless, *Wireless Internet Availability* (visited
    Apr. 1, 2003)
    \<http://www.cingularwirelses.com/beyond_voice/wi_availability\>;
    Cingular Wireless, LLC, SEC Form 10-K, Mar. 11, 2003, at 10; Sue
    Marek, *Cingular Gets Back to Basics*, [Wireless Week]{.smallcaps},
    Mar. 1, 2003, at 12.

[^264]: Cingular Wireless, LLC, SEC Form 10-K, Mar. 11, 2003, at 10.

[^265]: Sue Marek, *Cingular Gets Back to Basics*, [Wireless
    Week]{.smallcaps}, Mar. 1, 2003, at 12; *Wireless Carriers in
    Americas Already Receiving Benefits of GSM/GPRS Technology*, [PR
    Newswire]{.smallcaps}, Feb. 18, 2003. Cingular Wireless has not
    established a timeline for installing WCDMA. In fact, the company
    has stated that it will need more spectrum to deploy WCDMA. *See*
    Kelly Carroll, *Cingular Backs Away From Wideband CDMA*,
    [Telephony]{.smallcaps}, Nov. 5, 2001; Frank Marsala, *Implications
    of Cingular's Technology Announcement*, [Robertson
    Stephens]{.smallcaps}, Oct. 31, 2001; Kelly Carroll, *Cingular
    Attaches Billions To Its EDGE Commitment*, [Telephony]{.smallcaps},
    Dec. 10, 2001; Kelly Carroll, *An Alternate Reality For 3G
    Wireless*, [Telephony]{.smallcaps}, Oct. 15, 2001.

[^266]: This portion of its network covered the Northeast, the San
    Francisco Bay Area, and Salt Lake City. *See Seventh Report*, at
    13042.

[^267]: *Verizon Wireless Expands Express Network in Spokane, Washington
    and Northern Idaho*, News Release, Verizon Wireless, Mar. 31, 2003;
    *CDG Comments*, at 3-4.

[^268]: Dan O'Shea, *CTIA: Just Do It? Verizon Does*,
    [Telephony]{.smallcaps}, Mar. 18, 2003; Dan Meyer, *Verizon to
    Deploy DO, Carriers Talk PTT, Wi-Fi*, [RCR Wireless
    News]{.smallcaps}, Mar. 24, 2003, at 1.

[^269]: *Sprint Introduces Clarity You Can See and Hear with Nationwide
    Availability of PCS Vision*, News Release, Sprint PCS, Aug. 8, 2002;
    *CDG Comments*, at 3-4.

[^270]: Lynnette Luna, *Evolved CDMA Finds Its Legs in Small-Town
    America*, [Telephony]{.smallcaps}, Dec. 2, 2002, at 42; Sue Marek,
    *U.S. Spotlight Shines on EV-DO*, [Wireless Week]{.smallcaps}, Apr.
    15, 2003, at 26.

[^271]: Brad Smith, *Monet Makes Its Mark*, [Wireless Week]{.smallcaps},
    Mar. 15, 2003, at 16; Lynnette Luna, *Evolved CDMA Finds Its Legs in
    Small-Town America*, [Telephony]{.smallcaps}, Dec. 2, 2002, at 42.

[^272]: Kelly Carroll, *No-Name Town Gets High-Speed Access; Western
    Wireless Brings Mobile Internet to Rural Montana*,
    [Telephony]{.smallcaps}, July 9, 2001; Chris Goldman, *Home on the
    Web -- Western Wireless Brings 1X Data Service to a Small Montana
    Community*, [Wireless Review]{.smallcaps}, Nov. 15, 2001.

[^273]: Western Wireless Corporation, SEC Form 10-K, Mar. 27, 2003, at
    4.

[^274]: *U.S. Cellular Reports Fourth Quarter Results, Surpasses 4
    Million Customer Mark*, News Release, US Cellular, Feb. 5, 2003. US
    Cellular acquired PrimeCo Communications LLC and its Chicago-area
    CDMA network and subscribers in 2002. *See Seventh Report*, at
    13000.

[^275]: *Q3 2002 Dobson Communications Corporation Earnings Conference
    Call -- Final*, [FD (Fair Disclosure) Wire]{.smallcaps}, Nov. 15,
    2002 (quoting Everett Dobson, President, CEO and Chairman of Dobson
    Communications).

[^276]: *Q1 2003 Dobson Communications Corporation Earnings Conference
    Call -- Final*, [FD (Fair Disclosure) Wire]{.smallcaps}, May 6, 2003
    (citing Doug Stephens, COO of Dobson).

[^277]: *Id.* (citing Bruce Knooihuizen, Executive Vice President of
    Dobson).

[^278]: The broadband PCS-based and digital SMR-based coverage is
    estimated using counties, and the cellular-based coverage is
    estimated using CMAs. The caveats mentioned in Section B, Sources of
    Information, *supra*, and Section C.(ix), Market Entry, *infra*,
    apply to this analysis as well.

[^279]: *See* Appendix F, Maps 5-8, at F-6 -- F-9.

[^280]: *See* Appendix F, Map 9, at F-10.

[^281]: *See* Appendix D, Table 7, at D-10.

[^282]: *Id*.

[^283]: *Id*.

[^284]: The Commission has buildout rules for geographic area licenses,
    although they do not require operators to deploy networks such that
    the entire geographic area of a specific license receives coverage.
    For example, the construction requirements for 30 megahertz
    broadband PCS licenses state that an operator's network must serve
    an area containing at least one-third of the license area's
    population within five years of the license being granted and
    two-thirds of the population within 10 years. *See* 47 C.F.R.
    § 24.203(a). Similarly, the construction requirements for 10 and 15
    megahertz broadband PCS licenses state that an operator must cover
    one-quarter of a license area's population, or provide "substantial
    service," within five years of being licensed. *See* 47 C.F.R.
    § 24.203(b). The details concerning exactly which geographic areas
    or portions of the population should be covered to meet these
    requirements are left to the operators. In addition, decisions about
    whether to increase coverage above these requirements are left to
    the operators. For information on the buildout requirements for
    cellular licenses, *see* 47 C.F.R. §§ 22.946, 22.947,
    22.949, 22.951. For information on the buildout requirements for
    non-site based SMR licenses, *see* 47 C.F.R. §§ 90.665 and 90.685.

[^285]: All population figures are based on the Bureau of the Census's
    2000 county population.

[^286]: *See* Appendix F, Maps 2-3, at F-3 -- F-4. CTIA states -- based
    on its analysis of a publicly-available software, GeoComm's Wireless
    Sourcedisk -- that cellular service is available in zipcodes in
    which roughly 99 percent of the U.S. population lives. *CTIA*
    *Comments*, at 6.

[^287]: *See* Amendment of Part 22 of the Commission's Rules to Provide
    for the Filing and Processing of Applications for Unserved Areas in
    the Cellular Service and to Modify other Cellular Rules, *First
    Report and Order and Memorandum Opinion and Order on
    Reconsideration*, 6 FCC Rcd 6185, 6196-6200 (1991). Initial cellular
    systems operators were given a five-year period during which to
    expand their systems within the CMAs in which they were licensees.
    *Id*.

[^288]: *See* Appendix D, Table 5, at D-9. In this analysis, we include
    T-Mobile in California and Nevada, and Cingular in the New York City
    metro area, as competitors.

[^289]: *Id.* We note that the land area of these counties, 1.9 million
    square miles, is roughly 60 percent larger than the combined land
    area of the 15 members of the European Union (1.2 million square
    miles).

[^290]: *See* Appendix D, Table 10, at D-11.

[^291]: *Id.*

[^292]: Service quality can refer to many different factors in providing
    service to a customer. The various components of service quality
    include: network access, call maintenance and completion,
    applications, voice quality, data integrity and throughput, billing,
    and customer care. For purposes of this report, we are limiting our
    discussion of "service quality" or "call quality" to network access,
    call maintenance and completion, and voice quality. We also note
    that the reliability of a particular wireless call or application
    may involve the reliability of the wireline network as well as the
    reliability of the wireless connection. Furthermore, the type of
    handset a subscriber uses can also affect his or her network access
    and voice quality.

[^293]: *See* Section C.(v), Churn, *supra.*

[^294]: In the *NOI*, the Commission requested additional information on
    service quality and sought comment on the relationship between
    service quality and competition. While the Commission received
    little information from commenters on this issue, both Dobson and
    NTCA stated that rural customers have access to the same, high level
    of service quality that is available to consumers in urban areas.
    NTCA stated, "Even if rural customers are not served by multiple
    carriers, they will still demand access to the same services being
    provided to urban customers. ... \[M\]any rural customers have
    access to the same state-of-the-art wireless technologies available
    to their urban counterparts. .... Consumers in rural America are
    receiving superior wireless service from ... NTCA members." National
    Telecommunications Cooperative Association, *NOI Comments*, at 3, 4
    (filed Jan. 27, 3003) ("*NTCA Comments*"). Dobson stated, "\[R\]ural
    carriers ... are not lagging behind in providing digital networks
    and additional services to their customers." *Dobson Comments*, at
    5.

[^295]: Steven R. Yanis *et al*, *Wireless World -- The Mobile Telephone
    Industry*, Banc of America Securities, Equity Research, April 2002,
    at 249.

[^296]: *Wireless 411*, at 6. UBS Warburg also stated, "Carriers are
    also increasingly spending capex dollars on advanced technologies to
    improve capacity as subscriber usage increases. For example, in a
    December 2002 news release, Cingular noted that it has also boosted
    its network capacity by installing Adaptive Multi-Rate ("AMR")
    speech channels. Cingular believes AMR translates into higher
    spectral efficiency, allowing the company to carry more calls per
    base station. In the release, Cingular said that, 'As a result (of
    implementing AMR), network capacity is expected to double and
    service quality will improve.' CDMA carriers such as Verizon
    Wireless and Sprint PCS also invested in capacity-enhancing
    technologies. In addition to their moves to cdma2000 1XRTT, ... CDMA
    carriers invest in such items as smart antennae, which can increase
    capacity by using multiple antennas to provide more accurate
    directional targeting." *Id.*, at 80.

[^297]: Luiz Carvalho, *Wireless Tracker: Results Speak the Loudest*,
    Morgan Stanley, Equity Research, Mar. 17, 2003, at 8.

[^298]: *FCC Should Include Call Quality in Its Annual Report on
    Competition in Mobile Phone Services*, General Accounting Office,
    GAO-03-501, Apr., 2003, at 23 ("*GAO Report*").

[^299]: *Wireless 411*, at 27.

[^300]: *NextGen VII*, at 59.

[^301]: Linda J. Mutschler, *Wireless Store Visits*, Merrill Lynch,
    Equity Research, Dec. 13, 2002, at 4.

[^302]: *Id.*, at 6 ("\[T\]he main reasons for \[Sprint\] PCS's
    declining market share position have been issues with customer care
    and dropped/blocked calls"). Another analyst reported that Western
    Wireless experienced an increased churn rate in the second quarter
    of 2001 "as a result of poor network quality." The analyst added,
    "Minutes of use surged on the company's network, and Western, at the
    time, had ... old analog equipment and had not migrated subscribers
    quickly enough to digital technology to alleviate the network
    congestion." Steven R. Yanis *et al*, *Wireless World -- The Mobile
    Telephone Industry*, Banc of America Securities, Equity Research,
    April 2002, at 235.

[^303]: *GAO Report*, at 27. To conduct its survey, GAO "contracted with
    an international market research firm to administer 26 questions as
    part of a nationwide, multipurpose, Random Digit Dialing telephone
    survey of adults conducted between November 8 and 10, 2002. \...
    Five hundred fifty-two of the 1,027 survey respondents had mobile
    phones and answered at least some of the 25 questions in addition to
    the preliminary screener question." GAO estimates "that for the
    survey questions that applied to all of the respondents who used
    mobile phones (417 or more) the 95 percent confidence intervals
    \[yield margins of error of\] plus or minus 8 percentage points."
    GAO explained possible nonsampling errors with the survey's
    methodology: "As with any survey, differences in the wording of
    questions, the sources of information available to respondents, and
    the types of people who do not respond may have led to errors that
    we could not assess." *Id.*, at 40. Consumers Union also reported
    that "\[i\]n a survey conducted of 22,000 visitors to Consumer
    Reports' web site regarding wireless telephone quality of service
    and customer satisfaction, approximately one-third of respondents
    said they were unhappy with the quality of their cellular service."
    No additional information about the survey or its methodology is
    available. Consumers Union, Notice of *Ex Parte* presentation in
    Docket No. 02-379, Jun. 16, 2003.

[^304]: *GAO Report*, at 27-28. The remaining 48 percent "believed that
    call quality had not changed since they acquired their phones."
    *Id.*

[^305]: *Id.*, at 28.

[^306]: *Id.*, at 28.

[^307]: *Id.*, at 42.

[^308]: *Id.*, at 42.

[^309]: *See* FCC, *What You Should Know About Wireless Phone Service*,
    at 8, *available at* \<http://www.fcc.gov/cgb/wirelessphone.pdf\>.

[^310]: *Id.*; *Complete Cell Phone Guide*, [Consumer
    Reports]{.smallcaps}, Feb. 2003, at 11-27.

[^311]: Colette Fleming *et al.*, *3Q02 Wireless 411 -- Outlook*, UBS
    Warburg, Equity Research, Jan. 23, 2003, at 1; Paul Marsch *et al.*,
    *Deutsche Telekom*, Morgan Stanley, Equity Research, Oct. 17, 2002,
    at 2 ("the ultra-competitive US wireless market"); Cannon Carr *et
    al.*, *Avoiding the Hotel California: An Equity /High Yield Wireless
    Weekly*, CIBC World Markets, Dec. 23, 2002, at 2 ("fierce price
    competition"). In fact, many equity analysts view the intense price
    competition as a problem, at least from an investor's perspective.
    *See*, *e.g.*, Linda J. Mutschler *et al*., *Wireless Preview: What
    About 3Q02?*, Merrill Lynch, Equity Research, Oct. 8, 2002, at 5
    ("the continuing pricing pressure is worrisome, and, in our view,
    could disrupt the stable ARPU trend that we have seen up to this
    point"); and Cannon Carr and Gregor Dannacher, *Can Wireline
    Cannibalization Save Wireless ARPUs in 2003?*, CIBC World Markets,
    Dec. 11, 2002, at 5 ("Pricing Trends Worrisome, But Volumes Have
    Made Up For It").

[^312]: *See Fourth Report*, at 10164-10165.

[^313]: Jane Spencer, *Price Cuts by Cellphone Firms Add Up to Consumer
    Savings*, [Wall Street Journal]{.smallcaps}, Oct. 1, 2002.

[^314]: *Econ One Survey: Wireless Costs Continue to Fall*, News
    Release, Econ One, Jan. 9, 2003. The survey is based on an analysis
    of pricing plan data collected from carriers' websites.
    *Transcript*, at 78.

[^315]: This does not include any additional costs for roaming or long
    distance.

[^316]: *Econ One Survey: Wireless Costs Continue to Fall*, News
    Release, Econ One, Jan. 9, 2003. The analysis assumes a 70 percent
    peak/30 percent off-peak split in the kind of minutes used.

[^317]: *Id*. We would need additional data to determine whether prices
    are different in urban versus rural areas. For a discussion of Econ
    One's 2001 study comparing prices in urban and rural areas, *see*
    Section C.(ii), Rural Rollout, *infra*, and *Seventh Report*, at
    13023.

[^318]: *See Seventh Report*, at 13013. Econ One did not provide similar
    data for 2002.

[^319]: *See* Appendix D, Table 8, at D-10. The Consumer Price Index
    ("CPI") is a measure of the average change over time in the prices
    paid by urban consumers for a fixed market basket of consumer goods
    and services. The basket of goods includes over 200 categories
    including items such as food and beverages, housing, apparel,
    transportation, medical care, recreation, education, and
    communications. The CPI provides a way for consumers to compare what
    the market basket of goods and services costs this month with what
    the same market basket cost a month or a year ago. Starting in
    December of 1997, this basket of goods included a category for
    cellular telephone services. All CPI figures discussed in this
    paragraph were taken from BLS databases found on the BLS Internet
    site at \<http://www.bls.gov\>. The index used in this analysis, the
    CPI for All Urban Consumers (CPI-U), represents about 87 percent of
    the total U.S. population. Bureau of Labor Statistics, *Consumer
    Price Index: Frequently Asked Questions* (visited Mar. 18, 2002)
    \<http://www.bls.gov/cpi/cpifaq.htm\>. While the CPI-U is
    urban-oriented, it does include expenditure patterns of some of the
    rural population. *Transcript*, at 59. Information submitted by
    companies for the CPI is provided on a voluntary basis.
    *Transcript*, at 53.

[^320]: *Transcript*, at 50. The Cellular CPI includes charges from all
    telephone companies that supply "cellular telephone services," which
    are defined as "domestic personal consumer phone services where the
    telephone instrument is portable and it sends/receives signals for
    calls by wireless transmission." This measure does not include
    business calls, telephone equipment rentals, portable radios, and
    pagers. Bureau of Labor Statistics, *How BLS Measures Price Change
    for Cellular Telephone Service in the Consumer Price Index* (visited
    Mar. 18, 2002) \<http://www.bls.gov/cpi/cpifactc.htm\>.

[^321]: *See Seventh Report*, at 13013.

[^322]: Note that this version of ARPU is CTIA's "average monthly local
    bill" and does not include toll or roaming revenues where they are
    not priced into a calling plan. *See* note Error: Reference source
    not found, *supra.*

[^323]: *See* Appendix D, Table 9, at D-11.

[^324]: *See AT&T Launches First National One-Rate Wireless Service
    Plan*, News Release, AT&T Corp., May 7, 1998.

[^325]: For a comparison of Verizon Wireless' America Choice and
    National SingleRate (*i.e.*, its DOR plan), *see* Verizon Wireless's
    website, at www.verizonwireless.com.

[^326]: For a comparison of on-net and off-net plans, s*ee* Linda
    Mutschler *et al.*, *Wireless Pricing: What Are They Thinking,*,
    Merrill Lynch, Equity Research, Aug. 1, 2002.

[^327]: *Verizon Wireless New National Rate Plan Provides Superior Value
    To Frequent-Calling Travelers*, News Release, Verizon Wireless, Jan.
    31, 2002.

[^328]: Linda Mutschler *et al.*, *Wireless Pricing: A Look at Recent
    Pricing Trends -- and Potential Implications*, Merrill Lynch, Equity
    Research, Apr. 29, 2002, at 3.

[^329]: Linda Mutschler *et al.*, *Wireless Pricing: Cingular Starts
    On-Net Roaming National Plans*, Merrill Lynch, Equity Research,
    Sept. 5, 2002, at 1. Neither T-Mobile's on-net national plans nor
    any of Nextel plans allow off-net roaming. *See* Linda Mutschler *et
    al.*, *Wireless Pricing Nextel Introduces New Plans*, Merrill Lynch,
    Equity Research, Nov. 8, 2002, at 2.

[^330]: The fees that a carrier collects from non-subscribers using its
    network are called "outcollect" fees, and the fees that a carrier
    pays for its subscribers to roam on other networks are called
    "incollect" fees. Margo McCall, *Roaming Feeds Regional Carriers*,
    [Wireless Week]{.smallcaps}, Mar. 26, 2001, at 23.

[^331]: *See* *Wireless 411*, at 47 (Table 20: Roaming Revenues as a
    Percentage of Total Service Revenues).

[^332]: *See* Appendix D, Table 1, at D-2.

[^333]: *Id*.

[^334]: *Dec 2002 CTIA Survey*, at 75.

[^335]: A number of nationwide carriers have been able to negotiate
    lower roaming rates with their affiliates and other smaller
    carriers, as well as among themselves. *See*, *e.g.*, Linda J.
    Mutschler *et al*., *Sprint PCS*, Merrill Lynch, Equity Research,
    Feb. 6, 2003, at 4; *Dobson Reports Slightly Higher Revenues*, [RCR
    Wireless News]{.smallcaps}, Nov. 18, 2002, at 1; Western Wireless
    Corporation, SEC Form 10-K405, filed Mar. 29, 2002, at 4. *See
    also*, Section 1.(b), Joint Ventures, *supra*.

[^336]: *See*, *e.g*., Paul Wuh *et al.*, *Week in Wireless*, Goldman
    Sachs, Equity Research, Jun. 7, 2002, at 2. Prepaid programs are
    considered to have been the primary driver of the rapid penetration
    gains in Europe over the past couple of years. Linda J. Mutschler
    *et al.*, *The Next Generation VI: Wireless in the US*, United
    States Telecom Services-Wireless/Cellular, Merrill Lynch, Mar. 8,
    2002, at 16.

[^337]: *S**ee Seventh Report,* at 13015.

[^338]: Paul Kagan Associates, Inc., *Will 2003 Be The Year of
    Profitable Prepaid*, [Wireless Market Stats]{.smallcaps}, Jan. 21,
    2003, at 3 (citing the Boston Communications Group, Inc.); *see*
    Section C.(iii), Minutes-of-Use, *supra*.

[^339]: Paul Kagan Associates, Inc., *Will 2003 Be The Year of
    Profitable Prepaid*, [Wireless Market Stats]{.smallcaps}, Jan. 21,
    2003, at 3 (6 percent of the nationwide carriers' subscribers are
    prepaid); *NextGen VII*, at 27 (5 percent); Dan Meyer, *Carriers
    Take a Second Look at Prepaid*, [RCR Wireless News]{.smallcaps},
    Feb. 24, 2003, at 7 (7 percent, citing wireless industry consulting
    firm Fasttrack Wireless Inc.). *See* *also*, *Seventh Report,* at
    13015.

[^340]: Linda Mutschler *et al.,* *Wireless Store Visits: First Quarter
    Subscriber Growth Looking Solid*, Merrill Lynch, Equity Research,
    Mar. 31, 2003, at 4.

[^341]: For a discussion of the ClearPay program, s*ee Seventh Report*,
    at 13015-16.

[^342]: Dan Meyer, *Carriers Take a Second Look at Prepaid*, [RCR
    Wireless News]{.smallcaps}, Feb. 24, 2003, at 7. For example, AT&T
    Wireless's GoPhone customers, though not required to sign a contract
    or provide a deposit, are automatically charged a set fee each month
    to a credit card, debit card, or bank account. *AT&T Wireless
    Introduces GoPhone*, News Release, AT&T Wireless, May 5, 2003.

[^343]: *See* Section 2, Resellers, *infra*.

[^344]: *See* *Sixth Report*, at 13381.

[^345]: *See* note Error: Reference source not found, *supra*.

[^346]: *U.S. Mobile Phone Penetration Reaches 53% of Total Population
    in December 2002*, News Release, Telephia, Feb. 11, 2003.

[^347]: *Wireless Phone Penetration Among U.S. Households Slows Down as
    Fewer First-Time Subscribers Enter the Marketplace*, News Release,
    J.D. Power and Associates, Sept. 25, 2002.

[^348]: Linda Mutschler *et al.*, *Initiation Report: From Top to Bottom
    Line - Part I*, Merrill Lynch, Equity Research, Sept. 19, 2002, at
    19. In addition, there is some evidence that wireless penetration is
    inversely related to household income. According to a 2001 survey
    conducted by the Energy Information Administration (EIA), a
    statistical agency of the U.S. Department of Energy, the percent of
    housing units having cell phones increases with household income:
    household income less than \$15,000 (23 percent of households with
    cell phones); \$15,000 -- \$29,999 (38 percent); \$30,000 --
    \$49,999 (54 percent); \$50,000 -- \$74,999 (71 percent); \$75,000
    or more (82 percent). Energy Information Administration, *2001
    Residential Energy Consumption Survey* (visited May 19, 2003)
    \<http://www.eia.doe.gov/emeu/recs/appliances/appliances.html\>.

[^349]: *See Seventh Report*, at 13017.

[^350]: *Health of the Telecommunications Sector: A Perspective from
    Investors and Economists, before the House Subcommittee on
    Telecommunications and the Internet*, 108th Cong. (Feb. 5, 2003)
    (statement of Blake Bath, Managing Partner, Lehman Brothers).

[^351]: *Health of the Telecommunications Sector: A Perspective from
    Investors and Economists, before the House Subcommittee on
    Telecommunications and the Internet*, 108th Cong. (Feb. 5, 2003)
    (statement of Robert Crandall, Senior Fellow, The Brookings
    Institute).

[^352]: Cannon Carr and Gregor Dannacher, *Can Wireline Cannibalization
    Save Wireless ARPU in 2003?*, CIBC World Markets, Dec. 11, 2002, at
    8. According to the CEO of Verizon, Ivan Seidenberg, wireless
    accounts for 30 percent of all voice minutes. Jeffrey Bartash,
    *Verizon CEO Urges Regulatory Relief*,
    [CBS.MarketWatch.com]{.smallcaps}, Sept. 19, 2002.

[^353]: Based on a survey of the telecommunications bills of 32,000
    households for the third quarter of 2002. *TNS Telecoms Data ranks
    Verizon the Third Largest Long Distance Provider in the U.S.,
    Surpassing Sprint*, News Release, TNS Telecoms, Jan. 7, 2003. The
    breakdown: Local (26 percent); Local Toll (2 percent); Long Distance
    (8 percent); Wireless (27 percent); Cable/Satellite (27 percent);
    Internet (11 percent). *Id.*

[^354]: Sarah Z. Sleeper, *Who Needs Home Telephones? More Users Going
    All Wireless and That\'s Cutting Into Revenue For Local Bells and
    Long-Distance Firms*, [Investor's Business Daily]{.smallcaps}, Aug.
    8, 2002, at 1.

[^355]: Reinhardt Krause, *Local Bells Losing Second Lines as Users Go
    Broadband, Wireless*[, Investor's Business Daily]{.smallcaps}, Feb.
    11, 2003, at A01.

[^356]: Yuki Noguchi, *Requiem for the Payphone: As Cell Phone Use
    Increases, an Icon gradually Dies*, [Washington Post]{.smallcaps},
    Dec. 30, 2002, at E1.

[^357]: *Wireless Threatens Growth for U.S. Prepaid Calling Cards*, News
    Release, IDC, Dec. 23, 2002.

[^358]: *Health of the Telecommunications Sector: A Perspective from
    Investors and Economists, before the House Subcommittee on
    Telecommunications and the Internet*, 108th Cong. (Feb. 5, 2003)
    (statement of Blake Bath, Managing Partner, Lehman Brothers).

[^359]: *NextGen VII*, at 40.

[^360]: *Wireless 411*, at 54.

[^361]: *Leap Reports Results for Third Fiscal Quarter of 2002*, News
    Release, Leap, Nov. 13, 2002.

[^362]: *Id*.

[^363]: The monthly fee, paid in advance, varies slightly by service
    area. *See also, Seventh Report*, at 13018, note 225.

[^364]: *Leaping Over Landline: Leap Leads Wireless Displacement Trend*,
    News Release, Leap Wireless, Jun. 24, 2002.

[^365]: *See* Section 1.(c), Restructurings, *supra*.

[^366]: SunCom, *SunCom UnPlan "FREE" Zones* (visited Mar. 28, 2003)
    \<http://www.suncom.com/maps/suncom_unplan_maps.html\>; Linda
    Mutschler *et al.*, *Triton PCS Holdings, Inc.,* Merrill Lynch,
    Equity Research, Mar. 12, 2003, at 2.

[^367]: Qwest, *Q by Qwest* (visited Apr. 9, 2003)
    \<http://www.qwestwireless.com/qxq/coverage/\>.

[^368]: Conversation with ALLTEL sales representative, Mar. 26, 2003.

[^369]: *See* MetroPCS, *Service & Phone* (visited Apr. 9, 2003)
    \<http://www.metropcs.com/coverage.shtml\>.

[^370]: *See* Northcoast PCS, *Service Plans* (visited Apr. 9, 2003)
    \<http://www.Northcoastpcs.com/NewFiles/Service%20Plans.html\>.

[^371]: *See* First Cellular, *Southern Illinois Unlimited* (visited
    Apr. 9, 2003)
    \<http://www.firstcellular.com/wireless_clear_connect_d.htm\>.

[^372]: *See* Kiwi PCS, *Welcome!* (visited Apr. 9, 2003)
    \<http://www.kiwipcs.com \>.

[^373]: *See* Rural Cellular, *Welcome To Rural Cellular Corporation*
    (visited Apr. 9, 2003) \<http://www.ruralcellular.com/\>.

[^374]: *See* Ntelos, *nTown* (visited Apr. 9, 2003)
    \<http://www.ntelos.com/P/pdr_ntown.html\>.

[^375]: For a sampling of pricing plans, s*ee* Linda Mutschler *et al.*,
    *Wireless Pricing: What Are They Thinking,*, Merrill Lynch, Equity
    Research, Aug. 1, 2002; Colette Fleming *et al.*, *AT&T Wireless
    Group, Inc*., UBS Warburg, Equity Research, Feb. 12, 2003.

[^376]: *See* *Public Forum Presentations*
    \<http://wireless.fcc.gov/cmrs-crforum.html#pres\>.

[^377]: Joyce D. Stern, *The Condition of Education in Rural Schools,*
    U.S. Department of Education (Jun 1994) \[*cited in* National Center
    for Education Statistics, *Urban\\Rural Classification Systems*
    (visited Apr. 4, 2002)
    \<http://nces.ed.gov/surveys/ruraled/definitions.asp\>\].

[^378]: *See Seventh Report*, at 13021.

[^379]: Biennial Regulatory Review, Spectrum Aggregation Limits for
    Wireless Telecommunications Carriers, *Report and Order*, 15 FCC Rcd
    9219, 9256 at note 203 (1999).

[^380]: *NOI*, at 24937.

[^381]: Fred Williamson and Associates, *NOI* *Comments*, at 5 (filed
    Jan. 27, 2003) ("*FWA Comments*").

[^382]: *SDTA Reply Comments*, at 4.

[^383]: Rural Telecommunications Group, *NOI* *Comments*, at 4-5 (filed
    Jan. 27, 2003) ("*RTG Comments*").

[^384]: *RTG Comments*, at 4-5*.*

[^385]: *NTCA Comments*, at 6.

[^386]: *See Seventh Report*, at 13021-2; *Dobson Comments*, at 4 ("the
    status of competition should be assessed market-by-market, and not
    according to an arbitrary definition of 'rural' and an artificial
    distinction between rural and urban markets").

[^387]: *See* discussion in Rural Rollout, *infra*.

[^388]: FWA found that the Commission's findings with regards to the
    number of wireless competitors in rural areas in the *Seventh
    Report* tracked well with the level of competition found in the
    exchanges of the telcos that FWA represents. *FWA* *Comments*, at
    note 1.

[^389]: *See* Section C.(ii), Regional Penetration Rates, *supra*.

[^390]: Of the 3,141 counties in the nation in 1995, 836 were counties
    that made up the 310 metropolitan areas as defined by the Office of
    Management and Budget in June 1993. The 310 metropolitan areas
    consisted of 240 metropolitan statistical areas, 59 primary
    metropolitan statistical areas (PMSAs), and 11 New England county
    metropolitan areas (NECMAs). In parts of the United States remote
    from metropolitan areas, 38 non-metropolitan counties were each
    identified as a node. Kenneth P. Johnson, *Redefinition of the BEA
    Economic Areas*, [Survey Of Current Business]{.smallcaps}, Feb.
    1995, at 75.

[^391]: FCC internal analysis.

[^392]: U.S. Census Bureau, *American Factfinder*, Census 2000 Summary
    File 3 (SF 3) -- Sample Data (P5 -- Urban and Rural)
    \<http://factfinder.census.gov/\>.

[^393]: The Rural Utilities Service, which offers government subsidized
    loans to carriers serving rural areas, will not approve loans to
    more than one applicant to provide telephone or broadband service
    within the same rural community. 7 C.F.R. § 1735.51(c); 60 Fed. Reg.
    4690 (Jan. 30, 2003).

[^394]: *See* Section, II.e, Geographical Comparisons: Urban vs. Rural,
    *infra.*

[^395]: *RTG* *Comments*, at 6.

[^396]: *FWA* *Reply Comments*, at 2.

[^397]: *Dobson Comments*, at 2.

[^398]: *Id.*, at 6.

[^399]: *See Seventh Report*, at 13022-13024.

[^400]: Dobson stated, "Clearly, if price is an indicator of the level
    of competition, the price reductions spawned by wireless competition
    in urban markets have come to rural areas." *Dobson Comments*, at 3.
    Dobson also explained at the Public Forum that "small market
    carriers ... are subject to the same competitive pressures of large
    market carriers. Because of national advertising and the Internet,
    consumers all over the country are educated about nationwide rate
    plans and services enabled by digital technology." *Transcript*, at
    115.

[^401]: Western Wireless Corporation, *NOI* *Comments*, at 5 (filed Feb.
    3, 2003).

[^402]: *FWA* *Comments*, at 7.

[^403]: *Id*.

[^404]: *See* Section II.e, Geographical Comparisons: Urban vs. Rural,
    *infra.*

[^405]: *Spectrum Cap Order*, at 22708-22709. *See also, Rural NOI*, at
    25561.

[^406]: *Spectrum Cap Order*, at 22709-22710. *See also, Rural NOI*, at
    25561.

[^407]: Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, *First Report and Order*, 11 FCC Rcd 18455,
    18457 (1996).

[^408]: *See* Appendix D, Table 2, at D-3.

[^409]: Dan Meyer, *Carriers Take a Second Look at Prepaid*, [RCR
    Wireless News]{.smallcaps}, Feb. 24, 2003, at 7; Bill Menezes, *Box
    Phones Expand Inroads to Middle America*, [Wireless
    Week]{.smallcaps}, Feb. 15, 2003, at 22. In 2001, General Motor
    Corp. claimed that its telematics system OnStar was the country's
    largest reseller of "cellular service." *See Seventh Report*, at
    13025, note 269. *See* *also*, Section II.g, Telemetry and
    Telematics, *infra*.

[^410]: Verizon Wireless reported that of as of June 30, 2002,
    approximately 1.4 million of its 30.3 subscribers purchased service
    through 80 different resellers, with only 22 percent being through
    WorldCom. Verizon Wireless, LLC, SEC Form S-4, at 13, 59 (filed Oct.
    9, 2002).

[^411]: WorldCom, Inc., Petition Pursuant to 47 U.S.C. Sec.160 For
    Forbearance From the Commercial Mobile Radio Service Number
    Portability Obligation, WT Docket No. 01-184, *Comments*, at 1
    (filed Sept. 21, 2001).

[^412]: *See Seventh Report,* at 13025.

[^413]: *See* Virgin Mobile USA, LLC, *NOI* *Response*, at 2 (filed Feb.
    5, 2003) ("*Virgin Mobile Comments*"); *Virgin Mobile USA and MTV
    Networks to Blow the Roof Off Cellular Content,* News Release,
    Virgin Mobile, July 24, 2002. For a detailed discussion of the
    venture, *see Seventh Report*, at 13026.

[^414]: *Virgin Mobile USA Off to Strong Start*, News Release, Virgin
    Mobile, Feb. 5, 2003. *See* *also*, *Virgin Mobile Comments*.

[^415]: *Boost Mobile to Launch Wireless Phone Service to Youth Market;
    September Launch in California and Nevada Test Markets;
    Differentiated Service to Run on Nextel National Network*, News
    Release, Nextel, Aug. 15, 2002.

[^416]: *Boost Mobile And Roxy/Quicksilver Extend Brand Reach With New
    Roxy Wireless Phone*, News Release, Boost Mobile, Nov. 19, 2002.

[^417]: *Morgan Stanley Wireless Data Report*, at 3.

[^418]: *Id*. In the *Seventh Report*, the Commission stated, based on
    data reported by Kagan and Yankee Group, that there were
    approximately 8 to 10 million users of mobile Internet services on
    all devices at the end of 2001. *See Seventh Report*, at 13038.

[^419]: *Morgan Stanley Wireless Data Report*, at 3. Cingular Wireless
    reported it had 5 million customers "actively using" its mobile data
    services as of the end of 2002, up from 2 million data customers at
    the end of 2001. Approximately 4.2 million of the 5 million were
    accessing data services over Cingular's cellular/PCS networks, and
    the rest were served by its Mobitex network. Cingular Wireless, LLC,
    SEC Form 10-K, Mar. 11, 2003, at 3, 5.

[^420]: *Young Adults Set to Upgrade Phones, Drive Usage of Mobile
    Messaging Applications in New Year*, News Release, Telephia and
    Harris Interactive, Dec. 17, 2002. *See* Section C.(ii), Text
    Messaging, *infra*, for a discussion of text messaging.

[^421]: *See* Section C.(vii), Technology Deployment, *supra.*

[^422]: *See* Section C.(viii), Coverage by Technology Type, *supra.*

[^423]: *See* Sections A, Spectrum Allocation; B, Network Overview; and
    1, Mobile Telephony Overview and Analysis, *supra.*

[^424]: *See* Sections II.b, CMRS Spectrum: Data-Only; and II.c, CMRS
    Networks: Data-Only, *infra.*

[^425]: *See* Section II.d, Services, Content, and Applications,
    *infra.*

[^426]: *See* Section II.e, Devices, *infra.*

[^427]: *See* Sections II.f, Wi-Fi, and II.g, Telemetry and Telematics,
    *infra.*

[^428]: *NOI*, at 24942-24948.

[^429]: *3G Americas Comments*; *CDG Comments*. This information is
    discussed in Section 2, Network Technology, *supra*.

[^430]: *See* Section A, Spectrum Allocation, *supra.*

[^431]: FCC, *Paging (Lower) Bandplan*,
    \<http://wireless.fcc.gov/auctions/data/bandplans/pagingLwrband.pdf\>;
    FCC, *929 and 931 MHz Paging Bandplan*,
    \<http://wireless.fcc.gov/auctions/data/bandplans/auc26bnd.pdf\>.

[^432]: *Id.*

[^433]: *See* Section C.(i), Paging, *infra*, for a further discussion
    of paging services.

[^434]: Revision of Part 22 and Part 90 of the Commission's Rules to
    Facilitate Future Development of Paging Systems, Implementation of
    Section 309(j) of the Communications Act -- Competitive Bidding,
    *Notice of Proposed Rulemaking*, 11 FCC Rcd 3108, 3109-3110 (1996).

[^435]: *See* 929 and 931 MHz Paging Auction Closes, *Public Notice*, DA
    00-508 (rel. Mar. 6, 2000); *Seventh Report*, at 13050-13051.

[^436]: Lower and Upper Paging Bands Auction Closes, *Public Notice*, DA
    03-1836 (rel. May 30, 2003).

[^437]: Implementation of Section 309(j) of the Communications Act --
    Competitive Bidding Narrowband PCS, PP Docket No. 93-253, *Third
    Memorandum Opinion and Order and Further Notice of Proposed
    Rulemaking*, 10 FCC Rcd 175 (1994).

[^438]: Announcing the High Bidders in the Auction of Ten Nationwide
    Narrowband PCS Licenses; Winning Bids Total \$617,006,674, *Public
    Notice*, PNWL 94-4 (Aug. 2, 1994).

[^439]: *Id.*; Announcing the High Bidders in the Auction of 30 Regional
    Narrowband PCS Licenses; Winning Bids Total \$490,901,787, *Public
    Notice,* PNWL 94-27 (rel. Nov. 9, 1994).

[^440]: Narrowband PCS Spectrum Auction Revised Inventory and Start Date
    for Auction No. 50, *Public Notice*, DA 03-372 (rel. Feb. 7, 2003);
    Auction of Regional Narrowband PCS Licenses Scheduled for September
    24, 2003, *Public Notice*, DA 03-1065 (rel. Apr. 3, 2003).

[^441]: Narrowband PCS Spectrum Auction Revised Inventory and Start Date
    for Auction No. 50, *Public Notice*, DA 03-372 (rel. Feb. 7, 2003).

[^442]: Auction of Regional Narrowband PCS Licenses Scheduled for
    September 24, 2003, *Public Notice*, DA 03-1065 (rel. Apr. 3, 2003).

[^443]: *See* Section C.(i), Paging, *infra*, for a discussion of
    traditional paging services.

[^444]: WebLink Wireless, *ReFLEX Wireless Data Technology*, 2000, at
    18-19,
    \<http://www.weblinkwireless.com/aboutweblinkwireless/whitepapers/ReFLEX2.PDF\>.

[^445]: *Id.*, at 15.

[^446]: *See Seventh Report*, at 13046.

[^447]: *Q3 2002 \@Road Conference Call -- Final*, [FD (Fair Disclosure)
    Wire]{.smallcaps}, Oct. 24, 2002 (quoting Tom Hoster, Chief
    Financial Officer of \@Road).

[^448]: *Monet Mobile Networks Launches Nation's First Commercial
    CDMA2000 1xEV-DO, High-speed, Mobile Internet Service*, News
    Release, Monet Mobile, Oct. 29, 2002.

[^449]: Monet Mobile, *Coverage Area* (visited Mar. 8, 2003)
    \<http://www.monetmobile.com/showcontent.asp?contentname=cons_coveragearea\>.

[^450]: *See Seventh Report*, at 13045.

[^451]: Cingular Wireless, LLC, SEC Form 10-K, Mar. 11, 2003, at 5;
    Cingular Wireless, *Mobitex Data Map* (visited Mar. 8, 2003)
    \<http://www.cingular.com/business/mobitex_map\>. Cingular Wireless
    reports there were 817,000 Mobitex users at the end of 2002.
    Cingular Wireless, LLC, SEC Form 10-K, Mar. 11, 2003, at 5.

[^452]: Motient, *Network Coverage* (visited Mar. 8, 2003)
    \<http://www.motient.com/Content/NetworkCoverage/Overview/networkoverview.htm\>.

[^453]: *See* Appendix E, Table 2, at E-3.

[^454]: *See* Sections C.(i), Paging through C.(x), Location-Based
    Services, *infra.*

[^455]: Verizon Wireless reported 8.5 million downloads of Get It Now
    applications by its customers within the first six months of the
    launch of Get It Now. *In Just Six Months, Get It Now Proves Itself
    as an Over Achiever*, News Release, Verizon Wireless, Apr. 30, 2003.

[^456]: Verizon Wireless, *Get It Now* (visited Mar. 21, 2003)
    *\<*http://www.verizonwireless.com/ics/plsql/getitnow.intro\>.

[^457]: AT&T Wireless, *mMode Plans* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/plans/\>; T-Mobile, *T-Zones Pricing*
    (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/addonpricing.asp\>; Cingular
    Wireless, *Wireless Internet Pricing* (visited Jan. 23, 2003)
    \<http://www.cingular.com/beyond_voice/wi_pricing\>. AT&T Wireless
    reports that its mMode subscribers are able to access 260 sites,
    more than 150 games, and 2,000 ring tones and graphics, and mMode is
    available in all of the areas where AT&T Wireless has deployed its
    GSM/GPRS network. AT&T Wireless Services, Inc., SEC Form 10-K, Mar.
    25, 2003, at 2, 8.

[^458]: Cingular charges \$6.99 per month for one MB, AT&T Wireless
    charges \$7.99 per month for one MB, and T-Mobile charges \$9.99 per
    month for 10 MB. AT&T Wireless, *mMode Plans* (visited Jan. 27,
    2003) \<http://www.attws.com/mmode/plans/\>; T-Mobile, *T-Zones
    Pricing* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/addonpricing.asp\>; Cingular
    Wireless, *Wireless Internet Pricing* (visited Jan. 23, 2003)
    \<http://www.cingular.com/beyond_voice/wi_pricing\>.

[^459]: Sprint PCS's monthly mobile data plan is called Vision. Sprint
    PCS Vision, *How Can I Use It?* (visited Jan. 28, 2003)
    \<http://www.pcsvision.com/howcan.html\>; Sprint PCS, *PCS Service
    Plans: Select Your Plan* (visited Jan. 28, 2003)
    \<http://www1.sprintpcs.com/explore/servicePlansOptionsV2/PlansOptions.jsp\>.
    Sprint PCS was serving 1.3 million Vision customers as of the end of
    March 2003. *Q1 2003 Sprint FON Group Earnings Conference Call --
    Final*, [FD (Fair Disclosure) Wire]{.smallcaps}, Apr. 21, 2003 (Len
    Lauer, President of Sprint PCS).

[^460]: As discussed in the *Seventh Report*, smartphones are devices
    that combine the voice capabilities of mobile telephones with the
    data and personal information management functions of PDAs. Compared
    to traditional mobile handsets, smartphones generally have larger
    screens, more advanced graphics and processing capabilities, more
    memory, a more advanced or user-friendly operating system, some form
    of QWERTY keypad, and the ability to synch data with a desktop
    computer. *See Seventh Report*, at 13047.

[^461]: Verizon Wireless, *Express Network: Pricing* (visited Jan. 17,
    2003) http://www.verizonwireless.com/express_network/exp_terms.html;
    Cingular Wireless, *Wireless Internet Pricing* (visited Jan. 23,
    2003) http://www.cingular.com/beyond_voice/wi_pricing; T-Mobile,
    *T-Mobile Internet* (visited Jan. 24, 2003)
    http://www.t-mobile.com/tmobile_internet/rates.asp; AT&T Wireless,
    *mMode Plans* (visited Jan. 27, 2003)
    http://www.attws.com/mmode/plans/; Sprint PCS, *PCS Service Plans:
    Select Your Plan* (visited Jan. 28, 2003)
    http://www1.sprintpcs.com/explore/servicePlansOptionsV2/PlansOptions.jsp.

[^462]: Cingular Wireless, *Wireless Internet Pricing* (visited Jan. 23,
    2003) \<http://www.cingular.com/beyond_voice/wi_pricing\>; AT&T
    Wireless, *mMode Plans* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/plans/\>.

[^463]: T-Mobile, *T-Zones Pricing* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/addonpricing.asp\>.

[^464]: *See* Appendix E, Table 1, at E-2.

[^465]: NRUF data for year-end 2002. *See* Section C.(i), Subscriber
    Growth, *supra*, for a description of this source. Many traditional
    paging carriers also offer advanced messaging services, such as
    e-mail and information updates, which are discussed in below in
    their respective subsections.

[^466]: As mentioned in the *Seventh Report*, Arch Wireless filed for
    bankruptcy in December 2001 and Metrocall filed in June 2002. *See
    Seventh Report*, at 13050. Both companies have since emerged from
    bankruptcy, Arch Wireless in May 2002 and Metrocall in October 2002.
    Jonathan Berke, *Arch Wireless Out of Ch. 11*, [Daily
    Deal]{.smallcaps}, May 30, 2002; Yuki Noguchi*, Out of Bankruptcy,
    Into Uncertainty; Smaller Metrocall Expects to Lose More Paging
    Customers, Retain Core Clientele*, [The Washington
    Post]{.smallcaps}, Oct. 10, 2002, at E5.

[^467]: SkyTel Communications, Inc. is a wholly owned subsidiary of
    WorldCom that was acquired on October 1, 1999. *See Fifth Report*,
    at 17720-17721. In July 2002, just prior to its bankruptcy filing,
    WorldCom announced that it planned to exit the wireless business and
    eventually sell off SkyTel. Dan Meyer, *WorldCom Plans Wireless
    Exit*, [RCR Wireless News]{.smallcaps}, July 8, 2002, at 1; Jim
    Krane, *Long-distance Giant WorldCom Files for Biggest Bankruptcy in
    U.S. History*, [The Associated Press]{.smallcaps}, July 22, 2002. As
    noted in the *Seventh Report*, WebLink field for bankruptcy in May
    2001. *See Seventh Report*, at 13050. The company emerged from
    bankruptcy in September 2002, and in January 2003, WebLink announced
    that it had agreed to be acquired by Leucadia National Corp, a
    financial services holding company. Karen Brown, *WebLink
    Re-Emerges, Broadens Message*, [Wireless Week]{.smallcaps}, Sept.
    16, 2002, at 16; *WebLink Finds a Buyer*, [Communications
    Today]{.smallcaps}, Jan. 17, 2003.

[^468]: *See Seventh Report*, at 13051; John Sullivan, *Motorola's Exit:
    Death Knell Or New Dawn For Paging Market?*, [Wireless Data
    News]{.smallcaps}, Dec. 19, 2001.

[^469]: Presentation of Arch Wireless, Federal Communications
    Commission, July 25, 2002 (quoting C. Edward Baker, Jr., Chairman
    and CEO).

[^470]: Yuki Noguchi*, Out of Bankruptcy, Into Uncertainty; Smaller
    Metrocall Expects to Lose More Paging Customers, Retain Core
    Clientele*, [The Washington Post]{.smallcaps}, Oct. 10, 2002, at E5
    (quoting Vincent D. Kelly, Chief Financial Officer of Metrocall).

[^471]: E-mail users can send a text message to a mobile handset using
    an e-mail address consisting of the recipient's 10 digit phone
    number and the carrier's name, such as 1234567890@carriername.com.
    Most carriers also offer the ability to send text messages from
    their websites.

[^472]: *See Seventh Report,* at 13051. SMS also can be used to deliver
    information updates to mobile users. This service is discussed in
    Section C.(ii), Text Messaging, *infra*. Mobile telephone carriers
    have also been linking their text messaging services with popular
    television shows and movies. For example, AT&T Wireless enabled its
    customers to text in their votes for their favorite performers on
    "American Idol," and Verizon Wireless allowed its customers to vote
    for the Most Valuable Player during the National Basketball
    Association All-Star Game. Ken Spencer Brown, *Message Technology
    Gets "American Idol" Showcase*, [Investor's Business
    Daily]{.smallcaps}, Feb. 14, 2003, at A5.

[^473]: *See Seventh Report*, at 13051.

[^474]: *Id.*, at 13051-13052.

[^475]: *Id.*, at 13052. A recent study by Keynote Systems, a company
    that tests the performance of Internet technologies, found that
    approximately 5 percent of all sent text messages are never
    received. Susan Stellin, *Compressed Data; Some Text Messages Just
    Disappear, a Study Finds*, [The New York Times]{.smallcaps}, Jan.
    20, 2003, at C3 (citing Keynote Systems).

[^476]: Thomas E. Wheeler, President of CTIA, Presentation at CTIA
    Wireless I.T. & Internet 2002, Las Vegas, NV, Oct. 16, 2002.
    Cingular Wireless reports that its subscribers sent 211 million text
    messages during December 2002, up four-fold from 54 million messages
    sent during January 2002. Sue Marek, *Cingular Gets Back to Basics*,
    [Wireless Week]{.smallcaps}, Mar. 1, 2003, at 12. In addition, AT&T
    Wireless reports it had 3 million paying SMS customers as of
    year-end 2002. AT&T Wireless Services, Inc., SEC Form 10-K, Mar. 25,
    2003, at 2.

[^477]: *Young Adults Set to Upgrade Phones, Drive Usage of Mobile
    Messaging Applications in New Year*, News Release, Telephia and
    Harris Interactive, Dec. 17, 2002.

[^478]: *Id*.

[^479]: Tobi Elkin, *18% Would Rather Give Up TVs Than Wireless Phones*,
    [AdAge]{.smallcaps}, Feb. 24, 2003 (citing Upoc and Frank N. Magid
    and Associates).

[^480]: *Young Adults Set to Upgrade Phones, Drive Usage of Mobile
    Messaging Applications in New Year*, News Release, Telephia and
    Harris Interactive, Dec. 17, 2002.

[^481]: Denny Strigl, President and CEO of Verizon Wireless,
    Presentation at Goldman Sachs Telecom Issues Conference, New York,
    NY, May 6, 2002.

[^482]: In both cases, the fees for text messaging would be in addition
    to a subscriber's monthly voice service plan.

[^483]: *See* Appendix E, Table 1, at E-2. Verizon Wireless also offers
    text messaging for its prepaid voice customers for 5 cents to send
    and 5 cents to receive. Verizon Wireless, *Mobile Messenger Service:
    Overview* (visited Jan. 17, 2003)
    \<http://www.verizonwireless.com/jsp/mobilemessenger/index.jsp\>.

[^484]: Cingular and Verizon Wireless both charge \$2.99 per month to
    send or receive 100 messages, while AT&T Wireless charges \$4.99 per
    month to send 100 messages and received messages are free. Prices
    for a package of 500 messages range from \$2.99 per month with
    T-Mobile to \$9.99 per month with Cingular, and Verizon Wireless
    charges \$7.99 per month for 600 messages. *See* Appendix E, Table
    1, at E-2. For all carriers, overage fees are the same as per
    message fees. Nextel charges \$7.50 per month for unlimited text
    messaging. Nextel, *Nextel Mobile Messaging* (visited Feb. 4, 2003)
    \<http://www.nextel.com/services/mobilemessaging/index.shtml\>.
    Cingular also offers an advanced text messaging service using its
    Mobitex network for subscribers using RIM devices. The service,
    called Interactive Messaging PLUS, enables users to send messages as
    faxes or text-to-voice messages and to receive confirmation that
    their messages have been delivered and read. Cingular Wireless,
    *Interactive Messaging* (visited Jan. 24, 2003)
    \<http://www.cingular.com/business/implus\>. Interactive Messaging
    PLUS costs \$16.99 per month for 100 kB, or 100,000 characters;
    \$24.99 per month for 200 kB, or 200,000 characters; and \$29.99 per
    month for 500 kB, or 500,000 characters. Overage charges are 20, 10,
    and 5 cents per kB, respectively. *Id.*

[^485]: *See* Appendix E, Table 1, at E-2.

[^486]: *Id*.

[^487]: Nextel, *Nextel Mobile Messaging* (visited Feb. 4, 2003)
    \<http://www.nextel.com/services/mobilemessaging/index.shtml\>.
    Nextel also offers an integrated mobile messaging package that gives
    users unlimited text messaging, AIM use, and wireless web access for
    \$10 per month. *Id.*

[^488]: *See* Sections C.(iv), Games and C.(v), Multimedia Messaging
    Services, *infra*, for a discussion of games and services allowing
    users to exchange digital photos and video files.

[^489]: Ring tone providers aggregate and secure the rights to replay
    music, and then convert it into a downloadable format, while mobile
    telephone carriers provide the network and interface over which the
    music is downloaded by end users.

[^490]: Christopher Stern, *Lords of the Ring-a-Lings*,
    [Newsbytes]{.smallcaps}, Dec. 25, 2002 ("*Stern article*"). Moviso
    and Modtones are the two leading U.S. ring tone providers. *Id.*

[^491]: *Music Industry Sees Profit in Playing the Wireless Market*,
    CTIA Daily News, Feb. 12, 2003 (citing [Dow Jones
    Newswires]{.smallcaps}); Gordon Masson and Juliana Koranteng,
    *Labels Hope to Dial Up Wireless Windfall*, [Billboard]{.smallcaps},
    Jan. 25, 2003, at 1. Ring tone revenues are shared among carriers,
    ring tone providers, and music producers who must -- in the cases
    where the music is under copyright protection -- pay royalties to
    artists or other entities that hold various rights to a song. *Stern
    article*. The range of ring tones and graphics available to mobile
    users varies by carrier and depends largely the providers and/or
    music labels with whom the carrier has an agreement. In some cases,
    carriers contract directly with music labels. Verizon Wireless
    customers can choose ring tones offered by three different
    providers, ModTones, Moviso, and Matsui Comtek Corp. Verizon
    Wireless, *Shop Get It Now: Get Tones* (visited Jan. 22, 2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20tones\>.
    AT&T Wireless and Sprint PCS mobile Internet subscribers can
    download music produced by Warner Music Group's labels. AT&T
    Wireless, *mMode Features -- How to Access Warner Music* (visited
    Jan. 27, 2003)
    \<http://www.attws.com/mmode/features/music/howTo.jhtml#warner\>.
    *Sprint and Warner Music Group Offer America's First Wireless
    Streaming Music Clip Subscription Service and Collection of Official
    Artist Branded Animated and Voice Ringers on PCS Vision(SM) Phones*,
    News Release, Sprint PCS, Jan. 8, 2003.

[^492]: *Stern article* (citing John Johnson, a spokesman for Verizon
    Wireless).

[^493]: Sprint PCS Vision, *Ringers* (visited Jan. 28, 2003)
    \<http://www.pcsvision.com/ringers.html\>; Sprint PCS Vision,
    *Screens* (visited Jan. 28, 2003)
    \<http://www.pcsvision.com/screens.html\>.

[^494]: Cingular Wireless, *Ringtones & Graphics* (visited Jan. 22,
    2003)
    \<http://mww.moviso.com/cingular/app?class=Cingular&proc=GetMakeInfo\>;
    T-Mobile, *Download Zone Overview* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/downloadzone.asp\>.

[^495]: Cingular Wireless, *Ringtones & Graphics* (visited Jan. 22,
    2003)
    \<http://mww.moviso.com/cingular/app?class=Cingular&proc=GetMakeInfo\>;
    AT&T Wireless, *Ring Tones How To* (visited Jan. 27, 2003)
    \<http://www.attws.com/personal/txt_msg/personalization/ringTones/howTo.jhtml\>;
    T-Mobile, *Download Zone Overview* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/downloadzone.asp\>; Verizon
    Wireless, *Shop Get It Now: Get Tones* (visited Jan. 22, 2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20tones\>.
    Verizon Wireless also sells packages of ring tones. Ring tones from
    ModTones cost \$1.49 for one song, \$6.49 for five, and \$9.99 for
    10. Ring tones from Ringster by Moviso cost \$1.49 for one and
    \$6.99 for six. Ring tones from MyTonz by Matsui Comtek Corp cost
    \$1.49 for one, \$3.99 for three, and \$7.99 for seven. *Id.*

[^496]: *Sprint and Warner Music Group Offer America's First Wireless
    Streaming Music Clip Subscription Service and Collection of Official
    Artist Branded Animated and Voice Ringers on PCS Vision(SM) Phones*,
    News Release, Sprint PCS, Jan. 8, 2003.

[^497]: *Handango Launches Phone Fusion Gift Card for Mobile Phone
    Games*, News Release, Handango, Jan. 27, 2003 (citing research firm
    IDC).

[^498]: Verizon Wireless, *Get It Now: Get Games* (visited Jan. 22,
    2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20games\>
    ("*Get Games*"); Nextel, *Nextel iDEN Update -- Games* (visited Feb.
    7, 2003)
    \<http://www.idenupdate.com/DRHM/servlet/ControllerServlet?Action=DisplayProductListPageMOT&SiteID=idenupdt&categoryID=2005&resultsPerPage=10\>
    ("*Nextel Games*"). Users can download games over the air or via a
    wireline Internet connection with a cable connected to the handset.
    *Id.* The games offered through Verizon Wireless's Get It Now
    service were created by various application developers, including
    JAMDAT, COM2US Corporation, and Nuvo Studios. *See Get Games*.

[^499]: T-Mobile, *T-Zones Mobile Web Overview* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/service.asp\> ("*T-Zones
    Overview*"); AT&T Wireless, *mMode Games* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/features/games/mmodeGames.jhtml\>. AT&T
    Wireless offers games to its mMode users created by a variety of
    application developers, including JAMDAT, nGame, and Mobliss. Other
    carriers may have no overlap with other carriers in their game
    product line.

[^500]: *See, for example*, Sprint PCS, *Games* (visited Feb. 10, 2003)
    \<http://www.pcsvision.com/games.html\>.

[^501]: *Get Games*; *Nextel Games*.

[^502]: *Nextel Games*. A few games are free. *Id.*

[^503]: Cingular Wireless, *Games* (visited Feb. 10, 2003)
    \<http://www.cingular.com/beyond_voice/games\>. Cingular offers both
    interactive and downloadable games, including Trivia, Hangman,
    Blackjack, and others. All of the games are text-based and can be
    accessed by any handset that is text messaging capable. Users must
    have a My Wireless Window login from a Text Messaging or Wireless
    Internet account in order to access games. *Id.*

[^504]: *T-Zones Overview*; AT&T Wireless, *mMode Games* (visited Jan.
    27, 2003)
    \<http://www.attws.com/mmode/features/games/mmodeGames.jhtml\>.
    Games available from T-Mobile include The Love Game, Club KO, and
    Top Gun. *T-Zones Overview*. *See* Section II.d, Services, Content,
    and Applications, *supra*, for a discussion of MB-based pricing
    plans.

[^505]: Verizon Wireless, *Shop Get It Now: Get Pix* (visited Jan. 22,
    2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20pix\>;
    AT&T Wireless, *mMode Pix* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/features/mModePix/\>.

[^506]: AT&T Wireless, *mMode Pix* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/features/mModePix/\>.

[^507]: As of February 2003, users of the mobile video service,
    Logitech, could view public cameras placed in a variety of scenic
    locations such as beaches, as well as along major roads in the New
    York City metro area. Logitech, Inc., *Logitech Mobile Video*
    (visited Jan. 22, 2003) \<http://mobilevideo.logitech.com\>;
    *Verizon's Get It Now Customers Can Now Get Video on Their Phones*,
    CTIA Daily News, Feb. 3, 2003 (citing [Wireless
    NewsFactor]{.smallcaps}). Logitech users can have text messages sent
    to them when certain cameras are turned on. Logitech, Inc.,
    *Logitech Mobile Video* (visited Jan. 22, 2003)
    \<http://mobilevideo.logitech.com\>.

[^508]: *FunMail Adds Cartoons to Text Messages*, CTIA Daily News, Jan.
    29, 2003 (citing [Wireless NewsFactor]{.smallcaps}).

[^509]: Cingular Wireless, *Photo Messaging* (visited Jan. 23, 2003)
    \<http://www.cingular.com/beyond_voice/photo_messaging\>; T-Mobile,
    *T-Zones Camera Phones* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/cameraphones/\>; AT&T Wireless,
    *mMode Pix* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/features/mModePix/\>.

[^510]: Verizon Wireless, *Shop Get It Now: Get Pix* (visited Jan. 22,
    2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20pix\>;
    Logitech, *Logitech Mobile Video* (visited Jan. 22, 2003)
    \<http://mobilevideo.logitech.com\>. Snapfish costs \$2.99 per month
    or \$.99 for a one day purchase, exego costs \$5.99 per month, and
    Logitech costs \$4.99 per month. Users must have a handset enabled
    for Verizon Wireless's Get It Now service. *Id.* These prices are in
    addition to the monthly cost of voice service.

[^511]: Sprint PCS Vision, *Pictures* (visited Jan. 28, 2003)
    \<http://www.pcsvision.com/pictures.html\>.

[^512]: Verizon Wireless, *Mobile Messenger: Send a Message* (visited
    Feb. 5, 2003)
    \<http://www.vtext.com/customer_site/jsp/messaging_lo.jsp\>. Verizon
    Wireless also allows subscribers to its Mobile Web service to
    receive information alerts from MSN's web content. Verizon Wireless,
    *Welcome to Mobile Web* (visited Jan. 17, 2003)
    \<http://www.verizonwireless.com/mobileweb/index.html\>.

[^513]: Verizon Wireless and T-Mobile users can register to receive
    customized information updates, and the price to receive an update
    is the same as the price to receive a text message. *See* Verizon
    Wireless, *Mobile Messenger Service: Information Alerts* (visited
    Jan. 17, 2003)
    \<http://www.verizonwireless.com/jsp/mobilemessenger/alerts.jsp.\>;
    T-Mobile, *Alerts* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/alerts/\>.

[^514]: Cingular users who purchase a monthly text messaging package
    receive a "My Wireless Window" login and can access a variety of
    applications, including the ability to receive customized
    information alerts. Received alerts are then deducted from the
    monthly allotment of text messages. Cingular Wireless, *Text
    Messaging Pricing* (visited Jan. 23, 2003)
    \<http://www.cingular.com/beyond_voice/tm_pricing\>.

[^515]: *See* Section II.e, Devices, *infra.*

[^516]: Tobi Elkin, *18% Would Rather Give Up TVs Than Wireless Phones*,
    [AdAge]{.smallcaps}, Feb. 24, 2003 (citing Upoc and Frank N. Magid
    and Associates). Mobile web browsing usage increased dramatically
    during the beginning of the conflict and war with Iraq. The top 15
    mobile news sites saw their traffic increase an average of 41
    percent on March 18, 2003, and sites such as Yahoo! and MSNBC saw
    their traffic rise two to three time normal levels on March 19,
    2003. *People Flock to Web, Text Messages as Conflict with Iraq
    Heats Up*, CTIA Daily News, Mar. 20, 2003 (citing
    [Reuters]{.smallcaps}).

[^517]: AT&T Wireless, *mMode Features Content* (visited Jan. 27, 2003)
    \<http://www.attws.com/mmode/features/content/\>; *T-Zones
    Overview*.

[^518]: Sprint PCS Vision, *How Can I Use It?* (visited Jan. 28, 2003)
    \<http://www.pcsvision.com/howcan.html\>; Sprint PCS, *PCS Service
    Plans: Select Your Plan* (visited Jan. 28, 2003)
    \<http://www1.sprintpcs.com/explore/servicePlansOptionsV2/PlansOptions.jsp\>.

[^519]: Cingular Wireless, *Wireless Internet Pricing* (visited Jan. 23,
    2003) \<http://www.cingular.com/beyond_voice/wi_pricing\>; Verizon
    Wireless, *Mobile Web: Pricing* (visited Jan. 17, 2003)
    \<http://www.verizonwireless.com/mobileweb/mw_pricing.html\>.

[^520]: Verizon Wireless, *Shop Get It Now: Get Going* (visited Jan. 22,
    2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20going\>;
    Verizon Wireless, *Shop Get It Now: Get Fun* (visited Jan. 22, 2003)
    \<http://www.verizonwireless.com/ics/plsql/getitnow_shop.app?p_type=get%20fun\>.

[^521]: *See* Section C.(ii), Text Messaging, *supra*.

[^522]: POP3 (Post Office Protocol 3) e-mail servers attached to the
    Internet are independent of the transport mechanism used to access
    them. Therefore, POP3 e-mail account subscribers can access their
    e-mail messages from any Internet connection anywhere in the world.
    *See* Harry Newton, [Newton's Telecom Dictionary: 16^th^ Expanded &
    Updated Edition]{.smallcaps}, CMP Books, July 2000, at 692.

[^523]: *See Seventh Report*, at 13056.

[^524]: T-Mobile, *T-Zones Pricing* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/tzones/addonpricing.asp\>.

[^525]: Verizon Wireless, *Mobile Web: Pricing* (visited Jan. 17, 2003)
    \<http://www.verizonwireless.com/mobileweb/mw_pricing.html\>.

[^526]: Cingular Wireless, *Xpress Mail Network Edition* (visited Jan.
    24, 2003) \<http://www.cingular.com/business/xpress_mail_ne\>. The
    \$10 per month Xpress Mail Network Edition fee is in addition to the
    monthly cost of a Wireless Internet Express, MB-based mobile
    Internet access plan. *Id.*

[^527]: AT&T Wireless, *mMode Features Office Online* (visited Jan. 27,
    2003)
    \<http://www.attws.com/mmode/features/msg/office/index.jhtml\>.

[^528]: *See Seventh Report*, at 13057.

[^529]: T-Mobile, *RIM BlackBerry 6710* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/products/handhelds/blackberry_6710/rate_info.asp\>;
    Cingular Wireless, *Xpress Mail BlackBerry* (visited Jan. 23, 2003)
    \<http://www.cingular.com/business/xpress_mail_blackberry\>;
    GoAmerica, *Service Plans RIM OS* (visited Feb. 5, 2003)
    \<http://www.goamerica.net/serviceplans/pricing-chart-rims.html\>;
    EarthLink, *EarthLink BlackBerry Wireless Email Solution - Order*
    (visited Feb. 5, 2003)
    \<https://www.earthlink.net/cgi-bin/rimorder.cgi\>.

[^530]: *Id*.

[^531]: *Research In Motion Reports Fourth Quarter and Year-end Results
    for Fiscal 2003*, News Release, RIM, Apr. 3, 2003. The number of
    BlackBerry users is the total regardless of the provider from which
    the subscriber purchases service.

[^532]: Cingular Wireless, *Data Connect* (visited Jan. 23, 2003)
    \<http://www.cingular.com/business/data_connect\>.

[^533]: Technical White Paper, *BlackBerry Corporate Data Access*,
    Research in Motion, 2002,
    \<http://www.blackberry.net/products/pdfs/BlackBerry_Corporate_Data_Access.pdf\>.

[^534]: *See Seventh Report*, at 13058.

[^535]: Under Phase I of the E911 rules, wireless carriers offering
    cellular-type voice service must provide a PSAP the telephone number
    of the wireless caller and the location of the cell site receiving
    the call. 47 C.F.R. § 20.18(d). Under Phase II, the carrier must
    provide a precise location for the caller, by latitude and
    longitude. 47 C.F.R. § 20.18(e). To obtain E911, PSAPs must meet
    certain conditions, primarily that they be able to receive and use
    the information and request E911 service with at least six months
    notice. 47 C.F.R. § 20.18(j).

[^536]: *See* FCC, *Phase II Automated Location Identification Reports*
    \<http://www.fcc.gov/911/enhanced\>.

[^537]: Revision of the Commission's Rules to Ensure Compatibility with
    Enhanced 911 Emergency Calling Systems, *Fourth Memorandum Opinion
    and Order*, 15 FCC Rcd 17442 (2000). The Commission also granted
    individual waivers to five national wireless carriers in a series of
    orders released in October 2001. *See*, *e.g.*, Revision of the
    Commission's Rules To Ensure Compatibility with Enhanced 911
    Emergency Calling Systems Request for Waiver by AT&T Wireless
    Services, Inc., *Order*, 16 FCC Rcd 18253 (2001). For more
    information regarding the Commission's wireless 911 rules and
    orders, *see* \<http://www.fcc.gov/911/enhanced\>.

[^538]: Revisions of the Commission's Rules to Ensure Compatibility with
    Enhanced 911 Emergency Calling Systems: Phase II Compliance
    Deadlines for Non-Nationwide CMRS Carriers, *Order to Stay*, 17 FCC
    Rcd 14841 (2002).

[^539]: *See, e.g.,* Cingular Wireless LLC, File No. EB-02-TS-003,
    *Order*, FCC 03-129 (rel. Jun. 12, 2003); AT&T Wireless Services,
    Inc., File No. EB-02-TS-002, *Order*, DA 03-1776 (rel. May 23,
    2003). *See generally,* FCC, *Wireless 911 and E911 Violations*,
    \<http://www.fcc.gov/eb/E911/Violations.html\>.

[^540]: 7 C.F.R. § 20.18(e), (f). *See* OET Bulletin No. 71, Guidelines
    for Testing and Verifying the Accuracy of Wireless E911 Location
    Systems, Apr. 12, 2000.

[^541]: Sprint PCS Sixth Quarterly E911 Implementation Report at 1,
    filed May 1, 2003; Verizon Wireless Sixth Quarterly Enhanced 911
    Report at 1, filed May 1, 2003; Nextel Communications, Inc. Phase I
    and Phase II E911 Quarterly Report at 1, filed May 1, 2003. *See
    generally*, FCC, *Phase 2 Waiver Compliance Reports*,
    \<http://www.fcc.gov/911/enhanced/reports/phase2-waiver.html\>.

[^542]: AT&T Wireless Quarterly Report, filed Feb. 3, 2003; Cingular
    Wireless Fifth Quarterly E911 Implementation Report for GSM
    Networks, filed Feb. 3, 2003; T-Mobile USA, Inc. Sixth Semi-Annual
    Report on E911 Phase II Implementation Plan, filed Apr. 1, 2003. In
    some cases, TDOA network equipment is supplemented by another
    network-based technology called Angle of Arrival ("AOA"),
    particularly in rural areas.

[^543]: Verizon E911 Status Report at 3, filed Jan. 31, 2003; Nextel
    Communications, Inc. Phase I and Phase II E911 Quarterly Report,
    filed Feb. 3, 2003 at 3.

[^544]: AT&T Wireless Quarterly Report, filed Feb. 3, 2003 at 3;
    Cingular Wireless LLC Third Quarterly E911 Implementation Report for
    TDMA, AMPS, and TDMA/AMPS Networks, filed Feb. 3, 2003, at 2.

[^545]: Major wireless carriers report providing operational Phase II
    capability to between 99 and 261 of the nation's approximately 5,000
    primary PSAPs. Sprint PCS Fifth Quarterly E911 Implementation Report
    at 5, filed Feb. 1, 2003 (121 PSAPs with Phase II); Verizon E911
    Status Report at 3, filed Jan. 31, 2003 (261 PSAPs with Phase II);
    Nextel Communications, Inc. Phase I and Phase II E911 Quarterly
    Report, filed Feb. 3, 2003 at 3 (99 PSAPs with Phase II); AT&T
    Wireless Quarterly Report at 3, filed Feb. 3, 2003 (124 PSAPs with
    Phase II). For more information on PSAPs, *see* National Emergency
    Number Association, *9-1-1 Fast Facts*,
    \<http://www.nena9-1-1.org/PR_Pubs/911fastfacts.htm\>.

[^546]: *See* Report on Technical and Operational Issues Impacting the
    Provision of Wireless Enhanced 911 Services by Dale N. Hatfield, WT
    Docket No. 02-46 (filed Oct. 15, 2002). For further information on
    this proceeding, *see* FCC, *Enhanced 911*,
    \<http://www.fcc.gov/911/enhanced/\>. *See also,* FCC, *Phase 2
    Waiver Compliance Reports*,
    \<http://www.fcc.gov/911/enhanced/reports/phase2-waiver.html\>.

[^547]: *See* Appendix E, Table 3, at E-5. While there are several
    mobile device manufacturers, most smartphones and PDAs use one of
    two major operating systems: Palm Inc.'s PalmOS or Microsoft's
    Pocket PC. In addition to producing approximately 50 percent of all
    PDAs sold, Palm also licenses its PalmOS operating system to other
    handheld device and mobile telephone handset manufacturers,
    including Handspring, Sony, Samsung, and Kyocera. One of the major
    sources of demand for PalmOS products has been the multitude of
    software and applications developed by third-party companies that
    can be downloaded on to PalmOS devices at little or no additional
    expense. The second major PDA operating system, Pocket PC, is
    similar to Microsoft Windows, and all Pocket PC devices include
    handheld versions of most of the Microsoft Office desktop software
    applications, including Outlook, Word, Excel, PowerPoint, and
    Internet Explorer. In February 2002, Microsoft released an operating
    system made specifically for smartphones called Microsoft Pocket PC
    2002 Phone Edition. *See Seventh Report*, at 13048-13049, 13058.

[^548]: *Morgan Stanley Wireless Data Report*, at 3.

[^549]: *Id*.

[^550]: Novatel Wireless, *PC Card Modems* (visited Mar. 21, 2003)
    \<http://www.novatelwireless.com/pcproducts/index.html\>; Sierra
    Wireless, *The Sierra Wireless AirCard Series: Wireless Type II PC
    Cards* (visited Mar. 21, 2003)
    \<http://www.sierrawireless.com/ProductsOrdering/pccards.html\>.

[^551]: *Id*.

[^552]: *See Seventh Report*, at 13046. *See also* Section II.c, CMRS
    Networks: Data-Only, *supra.*

[^553]: RIM, *BlackBerry 6710 Wireless Handheld* (visited Mar. 21, 2003)
    \<http://www.blackberry.net/products/handhelds/blackberry6710.shtml\>;
    T-Mobile, *Handhelds and PDAs* (visited Mar. 21, 2003)
    \<http://www.t-mobile.com/products/handhelds/default.asp\>. RIM's
    non-voice devices use either Cingular's Mobitex network or Motient's
    dedicated data network. *See Seventh Report*, at 13045. RIM also
    released a new model, the BlackBerry 6510, that works with Nextel's
    iDEN network and includes push-to-talk service. RIM, *BlackBerry
    6510 Wireless Handheld* (visited Mar. 21, 2003)
    \<http://www.blackberry.net/products/handhelds/blackberry6510.shtml\>.

[^554]: *Multi-Tasking Just Got Easier with Verizon Wireless' Express
    Network and the BlackBerry 6750*, News Release, Verizon Wireless,
    Apr. 30, 2003.

[^555]: Sprint PCS, *PCS Phones* (visited Mar. 21, 2003)
    \<http://www1.sprintpcs.com/explore/PhonesAccessories/Phones.jsp\>;
    T-Mobile, *Handhelds and PDAs* (visited Mar. 21, 2003)
    \<http://www.t-mobile.com/products/handhelds/default.asp\>; AT&T
    Wireless, *Siemens SX56 Pocket PC Phone* (visited Mar. 21, 2003)
    \<http://www.attws.com/business/data/individual/siemens/\>.

[^556]: *Event Brief of Q3 2003 Handspring, Inc. Earnings Conference
    Call -- Final*, [FD (Fair Disclosure) Wire]{.smallcaps}, Apr. 15,
    2003 (citing Donna Dubinsky, CEO of Handspring). Handspring reported
    that there were 180,000 Treo users (installed base) as of March
    2003. *Id.*

[^557]: T-Mobile, *Handhelds and PDAs* (visited Mar. 21, 2003)
    \<http://www.t-mobile.com/products/handhelds/default.asp\>; Sprint
    PCS, *PCS Phones* (visited Mar. 21, 2003)
    \<http://www1.sprintpcs.com/explore/PhonesAccessories/Phones.jsp\>.

[^558]: *AT&T Wireless to Offer Palm's Tungsten W in the U.S.*, CTIA
    Daily News, Feb. 19, 2003 (citing [IDG News Service]{.smallcaps});
    Palm, *Tungsten W* (visited Mar. 21, 2003)
    \<http://www.palm.com/products/handhelds/tungsten-w/\>.

[^559]: T-Mobile, *Handhelds and PDAs* (visited Mar. 21, 2003)
    \<http://www.t-mobile.com/products/handhelds/default.asp\>.

[^560]: T-Mobile, *T-Mobile Sidekick Plans* (visited Jan. 24, 2003)
    \<http://www.t-mobile.com/plans/sidekick/?blnOverride=False\>.

[^561]: *Eighteen Percent of U.S. Users Can't Live Without Their
    Wireless Phones*, CTIA Daily News, Feb. 24, 2003 (citing Upoc and
    Frank N. Magid and Associates).

[^562]: *See Seventh Report*, at 13061. Bluetooth operates in the 2.4
    GHz unlicensed band and transmits data at speeds close to one Mbps.
    *Id.*

[^563]: *Strong Growth for Bluetooth Chipsets in Spite of Economy*, News
    Release, In-Stat/MDR, Jan. 14, 2003.

[^564]: A.J Hesselink, *Bluetooth Exec Sees Tech in Most Cell Phones in
    5 Yrs*, [Wall Street Journal]{.smallcaps}, Jun. 17, 2003 (citing
    Bluetooth SIG). The Bluetooth SIG is a trade association that
    promotes the development of Bluetooth. Its members include Intel
    Inc., Microsoft, and Nokia Corp. *Id.*

[^565]: Kenneth R. Carter, Ahmed Lahjouji, and Neal McNeal, *Unlicensed
    and Unshackled: A Joint OSP-OET White Paper on Unlicensed Devices
    and Their Regulatory Issues*, OSP Working Paper #39 (May 2003), at
    28-29. ("*OSP-OET White Paper*")

[^566]: *See Seventh Report*, at 13062-13063; *Grok Technology, 3 Rivers
    Connect Install Wireless Internet Network in Oakland, Pa.*, CTIA
    Daily News, Dec. 6, 2002 (citing [Pittsburgh Business
    Times]{.smallcaps}). Private Wi-Fi networks -- typically not open to
    the public -- have also been deployed in locations such as homes,
    office buildings, hospitals, and schools.

[^567]: *Wireless Leaders Debate the Role of Wi-Fi*, CTIA Daily News,
    Mar. 19, 2003 (quoting John Marston, Vice President of Business
    Development at Toshiba); Sky Dayton, CEO of Boingo Wireless, speech
    at CTIA Wireless 2003 Keynote Session, New Orleans, LA, Mar. 18,
    2003.

[^568]: *McDonald's to Offer Wi-Fi Wireless Internet Access*, CTIA Daily
    News, Mar. 11, 2003 (citing [Bloomberg]{.smallcaps}, [Wall Street
    Journal]{.smallcaps}); *Warchalking Symbols to Mark Free Wireless
    Internet Access at Scholotzsky's Delis*, CTIA Daily News, Nov. 11,
    2002 (citing [802.11 Planet]{.smallcaps}, [ZDNet News]{.smallcaps});
    *Hilton Hotels & Resorts to Introduce Wi-Fi Internet Access
    Services*, CTIA Daily News, Mar. 12, 2003 (citing MacCentral,
    atnewyork.com); *Starwood and Intel to Provide Wireless net Access
    in U.S. Hotels*, CTIA Daily News, Feb. 13, 2003 (citing [CNET
    News.com]{.smallcaps}); *Marriott to Launch Wireless Internet Access
    at 400 Hotels*, CTIA Daily News, Dec. 19, 2002 (citing [Wall Street
    Journal]{.smallcaps}); *InterContinental Hotels to Test Wi-Fi
    Technology*, CTIA Daily News, Mar. 11, 2003 (citing [Wall Street
    Journal]{.smallcaps}); *Omni Hotels to Offer Free In-Room Wi-Fi
    Networks Access*, CTIA Daily News, Feb. 20, 2003 (citing [802.11
    Planet]{.smallcaps}). For additional examples of Wi-Fi offerings,
    *see* *OSP-OET White Paper*, at 38-39.

[^569]: *See* 47 C.F.R. §§ 20.3, 20.9 for a discussion of commercial
    mobile radio services.

[^570]: *See, e.g.,* Stephen Lawson, *Cisco to Ship Wi-Fi Mobile Phone
    in June, Device Will Work Only Within Facilities*,
    [InfoWorld]{.smallcaps}, Apr. 16, 2003.

[^571]: *OSP-OET White Paper*, at 37.

[^572]: *Id*.

[^573]: *T-Mobile USA Expands Wireless Net Service at U.S. Airports*,
    CTIA Daily News, Oct. 30, 2002 (citing the [Wall Street
    Journal]{.smallcaps}).

[^574]: Dan O'Shea, *A Marriage of Convenience: Where Wi-Fi & Mobile
    Merge*, [Telephony]{.smallcaps}, Mar. 17, 2003, at 6; *T-Mobile USA
    to Allow Bundling of Hot Spot Service*, [RCR Wireless
    News]{.smallcaps}, May 12, 2003, at 21.

[^575]: Dan O'Shea, *CTIA: Just Do It? Verizon Does*,
    [Telephony]{.smallcaps}, Mar. 18, 2003; *AT&T Jumps on the Wi-Fi
    Bandwagon*, [Mobile Business Advisor]{.smallcaps}, Mar/Apr, 2003;
    Elizabeth V. Mooney, *Wayport Expands Wi-Fi Network with AT&T
    Wireless Agreement*, [RCR Wireless News]{.smallcaps}, Feb. 3, 2003,
    at 12.

[^576]: *Wayport Announces Agreement with CNN Airport Network to Provide
    High-Speed Wi-Fi Wireless Internet Access at Airports*, [PR
    Newswire]{.smallcaps}, Mar. 4, 2003; Wayport, *Welcome to Wayport*
    (visited Mar. 27, 2003) \<http://www.wayport.com/\>.

[^577]: *AT&T Jumps on the Wi-Fi Bandwagon*, [Mobile Business
    Advisor]{.smallcaps}, Mar/Apr, 2003; AT&T Wireless, *Wi-Fi From AT&T
    Wireless* (visited Mar. 27, 2003)
    \<http://www.attws.com/business/data/individual/goport/\>.

[^578]: Elizabeth V. Mooney, *Wayport Expands Wi-Fi Network with AT&T
    Wireless Agreement*, [RCR Wireless News]{.smallcaps}, Feb. 3, 2003,
    at 12; *Mobile Communications Diary*, [Mobile Communications
    Report]{.smallcaps}, Feb. 3, 2003.

[^579]: Dan O'Shea, *CTIA: Just Do It? Verizon Does*,
    [Telephony]{.smallcaps}, Mar. 18, 2003; Dan Meyer, *Verizon to
    Deploy DO, Carriers Talk PTT, Wi-Fi*, [RCR Wireless
    News]{.smallcaps}, Mar. 24, 2003, at 1.

[^580]: *Reception for Wi-Fi Mixed Among Carriers at CTIA Show*,
    Communications Daily, Mar. 19, 2003 (citing Len Lauer, President of
    Sprint PCS); Bob Brewin, *Start-Up Advances Public Access Wireless
    LAN Prospects*, [Computerworld]{.smallcaps}, Jan. 7, 2002, at 7; Dan
    O'Shea, *Wireless LAN: Carriers Draw the Line on Mobile/Wi-Fi
    Integration*, [Telephony]{.smallcaps}, Apr. 7, 2003, at 7.

[^581]: Boingo, *Location Directory* (visited Mar. 27, 2003)
    \<http://www.boingo.com/search.html\>.

[^582]: *Cometa Networks Formed to Provide National Wireless Internet
    Access*, News Release, Cometa Networks, Dec. 5, 2002.

[^583]: Jim Krane, *IBM, AT&T and Intel Form New Company to Provide
    High-Speed Wireless Internet Access*, [The Associated
    Press]{.smallcaps}, Dec. 5, 2002; Matthew Boyle, *The Really, Really
    Messy Wi-Fi Revolution*, [Fortune]{.smallcaps}, May 12, 2003, at 86.
    Cometa's business plan is to resell its network to mobile carriers,
    cable operators, and other telecommunications companies who wish to
    offer high-speed wireless Internet access to their individual and
    business customers. *Id.*; *Cometa Networks Formed to Provide
    National Wireless Internet Access*, News Release, Cometa Networks,
    Dec. 5, 2002.

[^584]: *Verizon Launches Free High-Speed Wi-Fi Internet Access in New
    York City for Verizon Online Customers*, News Release, Verizon, May
    13, 2003. The service is available at no additional charge to
    customers who use Verizon as their landline ISP and have compatible
    laptops or PDAs. *Id.*

[^585]: *Verizon Turns N.Y. Pay Phones into Wi-Fi Hot Spots*, CTIA Daily
    News, May 14, 2003 (citing [New York Times]{.smallcaps}, [USA
    Today]{.smallcaps}, [Washington Post]{.smallcaps}).

[^586]: *See Seventh Report*, at 13064.

[^587]: *Id*.

[^588]: *Id*.

[^589]: OnStar to Increase Product Availability of Its Safety, Security
    and Information Services, News Release, OnStar, Feb. 19, 2003;
    OnStar, *About Us: Backgrounder* (visited Apr. 2, 2003)
    \<http://onstar.internetpressroom.com/pressroom.cfm\>; OnStar,
    *About Us: Fast Facts* (visited Apr. 2, 2003)
    \<<http://onstar.internetpressroom.com/pressroom.cfm>\>. The number
    of subscribers includes the owners of GM models who receive the
    service free for one year whether they use it or not. *Id.*

[^590]: *See Seventh Report*, at 13064.

[^591]: *Id*.

[^592]: *Id.*, at 13065.

[^593]: Itron, Inc., SEC Form 10-K, Mar. 27, 2003, at 1.

[^594]: WebLink Wireless, Inc., SEC Form 10-Q, Aug. 19, 2002 (WebLink
    had 6836 telemetry units in service as of Jun. 30, 2002); Arch
    Wireless, *Developer Information -- Arch Telemetry Program* (visited
    Apr. 2, 2003)
    \<http://content.arch.com/developer/ArchTelemetryProgramOverview.html\>;
    Cingular Wireless, *Custom Solutions* (visited Apr. 2, 2003)
    \<http://www.cingular.com/business/custom_solutions\>.

[^595]: Presentation of Arch Wireless, Federal Communications
    Commission, July 25, 2002 (quoting C. Edward Baker, Jr., Chairman
    and CEO); *See Seventh Report*, at 13065.

[^596]: *See Seventh Report*, at 13065.

[^597]: In order to place a satellite telephony call, an "outbound"
    communication from an MSS mobile phone is transmitted up to the
    satellite, using "service link" frequencies. The satellite then
    retransmits the signal back down to the earth, using "feeder link"
    frequencies, to a gateway ground station, where the call is
    interconnected with terrestrial networks, such as the PSTN. The
    return or "inbound" communication works the exact opposite way. The
    communication from the terrestrial network is transmitted from the
    gateway earth station up to the satellite, and then retransmitted by
    the satellite back down to the MSS mobile telephone. In systems with
    inter-satellite links, the inbound and outbound communications may
    be transmitted through multiple satellites in order to complete the
    connection between the originating mobile telephone and the
    receiving gateway ground station.

[^598]: The Big LEO (low-earth orbit) band MSS allocation consists of an
    uplink at 1610-1626.5 MHz and a downlink at 2483.5-2500 MHz and is
    sometimes referred to as the 1.6/2.4 GHz band.

[^599]: Iridium Satellite LLC, Flexibility for Delivery of
    Communications by Mobile Satellite Service Providers in the 2 GHz
    Band, the L-Band, and the 1.6/2.4 GHz Band; Amendment of Section
    2.106 of the Commission's Rules to Allocate Spectrum at 2 GHz for
    Use by the Mobile Satellite Service, IB Docket No. 01-185, ET Docket
    No. 95-18, *Comments*, at 1 (filed Oct. 22, 2001). Globalstar, L.P.
    and L/Q Licensee, Inc., Flexibility for Delivery of Communications
    by Mobile Satellite Service Providers in the 2 GHz Band, the L-Band,
    and the 1.6/2.4 GHz Band; Amendment of Section 2.106 of the
    Commission's Rules to Allocate Spectrum at 2 GHz for Use by the
    Mobile Satellite Service, IB Docket No. 01-185, ET Docket No. 95-18,
    *Comments*, at 1 (filed Oct. 22, 2001). On February 15, 2002,
    Globalstar sought Chapter 11 bankruptcy protection. *Globalstar,
    Creditors Finalize Agreement On Debt Restructuring and New Business
    Model*, News Release, Globalstar L.P., Feb. 15, 2002. On April 28,
    2003, Globalstar and ICO Global Communications (Holdings) Limited
    ("ICO") announced that ICO won approval in U.S. bankruptcy court in
    Delaware to buy a majority stake in Globalstar for \$55 million,
    giving ICO a 54 percent ownership stake in Globalstar. *U.S. Court
    Approves ICO Investment in Globalstar*, R[euters,]{.smallcaps} Apr.
    28, 2003.

[^600]: ICO filed a Letter from Lawrence H. Williams and Suzanne
    Hutchings, ICO Global Communications (Holdings) Ltd., to Chairman
    Michael K. Powell, Federal Communications Commission, IB Docket No.
    99-81 (filed Mar. 8, 2001); *see also* Letter from Cheryl A. Tritt,
    Counsel to ICO Services Limited to Magalie Roman Salas, Secretary,
    Federal Communications Commission, IB Docket 99-81 (April 20, 2001).
    MSV filed Application of Motient Services Inc., File Nos.
    SAT-LOA-19980702-00066, SAT-AMD-20001214-00171 & SAT-AMD-20010302;
    *See Public Notice*, Report No. SAT-00066 at 2 (rel. Mar. 19, 2001).
    MSV later indicated that it would seek to use the same ancillary
    terrestrial component ("ATC") network with its current-generation
    MSS system. *See* Letter from Carson E. Agnew, President and Chief
    Operating Officer, and Peter D. Karabinis, Chief Technical Officer,
    Mobile Satellite Ventures, to Marlene H. Dortch, Secretary, Federal
    Communications Commission, IB Docket 01-185 at 1 (filed Dec. 16,
    2002).

[^601]: Flexibility for Delivery of Communications by Mobile Satellite
    Service Providers in the 2 GHz Band, the L-Band, and the 1.6/2.4 GHz
    Band, IB Docket No. 01-185, *Notice of Proposed Rulemaking*, 16 FCC
    Rcd 15532 (2001).

[^602]: The 2 GHz MSS band refers to the 1990-2025 MHz uplink
    (Earth-to-space transmissions) and 2165-2200 MHz downlink
    (space-to-Earth transmissions) frequencies originally allocated in
    the United States.

[^603]: The L-Band has MSS allocations at 1525-1559 MHz (downlink) and
    1626.5-1660.5 MHz (uplink).

[^604]: *See* Flexibility for Delivery of Communications by Mobile
    Satellite Service Providers in the 2 GHz Band, the L-Band, and the
    1.6/2.4 GHz bands; Review of the Spectrum Sharing Plan Among
    Non-Geostationary Satellite Orbit Mobile Satellite Service Systems
    in the 1.6/2.4 GHz Bands, *Report and Order and Notice of Proposed
    Rulemaking*, 18 FCC Rcd 1962, 1964 (2003) ("*Flexibility Order"*).

[^605]: *Flexibility Order* at 1965.

[^606]: *Id*.

[^607]: Mobile Satellite Ventures Subsidiary, LLC, *NOI* *Comments*, at
    5-6 (filed Jan. 27, 2003).

[^608]: *Flexibility Order* at 1984.

[^609]: *Seventh Report*, at 13032-13036. In accordance with established
    practice in using international benchmarking for the purpose of
    assessing effective competition in mobile markets, the comparison of
    mobile market performance is restricted to Western Europe and parts
    of the Asia-Pacific in order to ensure that the countries being
    compared are roughly similar to the United States with regard to
    their level of economic and telecommunications infrastructure
    development. See, for example, UK regulator Oftel's review of
    effective competition in the mobile market: *Effective Competition
    Review: Mobile*, Office of Telecommunications, Feb. 2001, at 7.

[^610]: *See* Appendix D, Table 12, at D-14.

[^611]: Linda Mutschler, *Global Wireless Matrix 4Q02*, Merrill Lynch,
    Global Securities Research, Apr. 2, 2003, at 2 ("*Global Wireless
    Matrix 4Q02*"); Ric Prentiss, *NextWave of U.S. Wireless Competitive
    Landscape Posters from Tampa Bay*, Raymond James, Equity Research,
    Jan. 28, 2003, at 6 ("*Raymond James Report*").

[^612]: *Global Wireless Matrix 4Q02*, at 2.

[^613]: *Id*.

[^614]: For purposes of comparing metrics in different countries,
    average MOUs include both incoming and outgoing traffic, and usually
    exclude traffic related to mobile data services. *Id.*, at 103.

[^615]: *Id*., at 2.

[^616]: *Id*.

[^617]: *Id*.

[^618]: Revenue per minute is calculated by dividing monthly voice-only
    ARPU by MOUs. For purposes of international comparison, service
    revenues included in ARPU reflect the fees mobile operators collect
    from other network operators for terminating incoming calls on their
    networks as well as monthly service charges and usage fees paid by
    mobile subscribers. For the relatively few countries in which ARPU
    is calculated somewhat differently, Merrill Lynch adjusts the
    reported figures to make them more comparable to the mobile metrics
    of other countries. *Id*., at 103.

[^619]: *Id*., at 2.

[^620]: *Id*.

[^621]: *See* *Seventh Report*, at 13036.

[^622]: *Global Wireless Matrix 4Q02*, at 2.

[^623]: *Id*.

[^624]: *See* *Seventh Report*, at 13036-13037.

[^625]: *Raymond James Report*, at 4-5; *NextGen VII*, at 2.

[^626]: *Raymond James Report*, at 4; *NextGen VII*, at 7.

[^627]: *Raymond James Report*, at 4. *See also*, *Seventh and Eighth
    Reports*.

[^628]: *Id*.

[^629]: *NextGen VII*, at 12-13.

[^630]: *Id*., at 13.

[^631]: *Id*., at 13-17.

[^632]: Terence Sinclair, *European Mobile (2),* Schroder Salomon Smith
    Barney, Equity Research, Sept. 10, 2002, at 10 and 15.

[^633]: *NextGen VII*, at 2.

[^634]: *Id.*, at 2.

[^635]: *Id*., at 35-36.

[^636]: *Id*.

[^637]: *Id.*, at 28-29.

[^638]: *Id*., at 35-37.

[^639]: *Id*., at 40-41.

[^640]: *Id*.

[^641]: *Id*., at 38-42.

[^642]: Apart from CPP, many analysts argue that higher mobile
    penetration in Western Europe and parts of the Asia-Pacific is
    partly explained by the higher monthly price of local landline
    telephone service abroad, which in many countries is in turn partly
    the result of metered local landline service. *See, for example*,
    Jerry Hausman, *From 2G to 3G: Wireless Competition for
    Internet-Related Services*, Jan. 22, 2002, presented at American
    Enterprise Institute Seminar Series in Telecommunications
    Deregulation on Apr. 23, 2002, at 2.

[^643]: Sam Paltridge, *Cellular Mobile Pricing Structures and Trends*,
    OECD, May 16, 2000, at 37.

[^644]: *Id*.; *NextGen VII*, at 19.

[^645]: *See* *Sixth Report*, at 13390-13391, and *Seventh Report*, at
    13033-13034.

[^646]: *See* Appendix D, Table 12, at D-14. As noted below, however,
    Japan and Korea are exceptions in that prepaid users account for
    relatively low share of the mobile subscriber base in these two CPP
    markets.

[^647]: *NextGen VII*, at 62.

[^648]: *Id*., at 15.

[^649]: Linda Mutschler, *Initiation Report*, Merrill Lynch, Global
    Securities Research, Sept. 19, 2002, at 42.

[^650]: *See* *Seventh Report*, at 13037

[^651]: *NextGen VII*, at 3.

[^652]: *Seventh Report*, at 13037.

[^653]: Linda Mutschler, *Initiation Report*, Merrill Lynch, Global
    Securities Research, Sept. 19, 2002, at 42-43. At the same time, one
    reason revenue per minute is comparatively low in South Korea is
    that, as noted earlier, fixed-to-mobile termination rates in South
    Korea are much lower than those in Europe.

[^654]: *NextGen VII*, at 62. We note that the Commission has
    acknowledged the increasing concern that U.S. carriers and consumers
    originating international calls from fixed networks in the U.S. may
    bear the burden of such subsidies. In October 2002, the Commission
    initiated a proceeding in which it sought comment on the issue of
    high foreign mobile termination rates and their effect on U.S.
    consumers and competition. *See* International Settlements Policy
    Reform; International Settlement Rates, IB Docket Nos. 02-324,
    96-261, *Notice of Proposed Rulemaking*, 17 FCC Rcd 19954 (2002).

[^655]: *See Sixth Report*, at 13393.

[^656]: *NextGen VII*, at 27.

[^657]: *See* Appendix D, Table 12, at D-14.

[^658]: Sam Paltridge, *Cellular Mobile Pricing Structures and Trends*,
    OECD, May 16, 2000, at 37.

[^659]: *NextGen VII*, at 28. We note that at least one U.S. carrier has
    begun offering plans with free incoming minutes. *See* Nextel,
    *Nextel National Free Incoming Plans* (visited Jun. 3, 2003)
    \<http://www.nextel.com/phones_plans/promos/promo_free_incoming.shtml\>.

[^660]: *Id*.

[^661]: *See Seventh Report*, at 13041.

[^662]: NTT DoCoMo, *Subscriber Growth* (visited Apr. 15, 2003)
    \<http://www.nttdocomo.com/home.html\>. NTT DoCoMo also continued to
    add subscribers to its popular 2G mobile data service, i-mode;
    however, the growth in i-mode has been leveling off over the past
    several months. The number of i-mode subscribers grew 17 percent
    between March 2002 and March 2003 from 32.2 to 37.8 million.
    However, between March 2001 and March 2002, the number of i-mode
    subscribers grew approximately 35 percent. *Id.*

[^663]: *Competition Heats Up a Bit in Japan's 3G Market*, CTIA Daily
    News, Mar. 17, 2003 (citing Daily Yomiuri).

[^664]: Mark Shuper, *The Year of the COO, Continued: Status Report*,
    Morgan Stanley, Equity Research Global, April 2003, at 13 (CDMA 1x &
    EV-DO & Lead W-CDMA Subs to '06).

[^665]: Linda Mutchler *et al*, *Mobile Update -- Update on Hutchison
    and UK Pricing*, Merrill Lynch, Equity Research, Mar. 28, 2003, at
    2.

[^666]: *NextGen VII*, at 56.

[^667]: Mark Shuper, *The Year of the COO, Continued: Status Report*,
    Morgan Stanley, Equity Research Global, April 2003, at 13, 16.

[^668]: *Id.*, at 16.

[^669]: *U.K. Mobile Phone Users Download 17 Million Web Pages Per Day*,
    CTIA Daily News, Feb. 28, 2003 (citing [Reuters]{.smallcaps}).

[^670]: *European Mobile Companies Push MMS*, CTIA Daily News, Jan. 27,
    2003 (citing [Dow Jones Newswires]{.smallcaps}).

[^671]: *See* Section C.(i), Subscriber Growth, *supra*.

[^672]: *See* Sections C.(iii), Minutes-of-Use and II.c, Pricing Data
    and Trends, *supra.*

[^673]: *See* Section C.(ix), Market Entry, *supra*.

[^674]: *See* Sections II.c, Pricing Data and Trends and C.(v), Churn,
    *supra.*

[^675]: *See* Section C.(x), Quality of Service, *supra*.

[^676]: *See* Section II.d, Wireless/Wireline Competition, *supra*.

[^677]: *Id*.

[^678]: *See* Section II.a, Mobile Data Introduction, *supra.*

[^679]: *See* Section C.(vii), Technology Deployment, *supra.*

[^680]: *See* Section C.(viii), Coverage by Technology Type, *supra*.

[^681]: *See* Section II.d, Services, Content, and Applications,
    *supra.*

[^682]: *See* Section C.(ii), Text Messaging, *supra.*

[^683]: *See* Section A, Background, *supra.*

[^684]: The scale and scope of such collection efforts will be dependent
    upon the availability of funding and the discretion of the
    Commission.

[^685]: "Fixed wireless" services are also sometimes referred to as
    "wireless broadband" or "wireless DSL." For a description of fixed
    wireless systems, see *Sixth Report*, at 13433-13437. For a more
    comprehensive discussion of competition in the fixed wireless
    industry and broadband telecommunications services generally, *see*
    Inquiry Concerning the Deployment of Advanced Telecommunications
    Capability to All Americans in a Reasonable and Timely Fashion, and
    Possible Steps To Accelerate Such Deployment Pursuant to Section 706
    of the Telecommunications Act of 1996, *Third Report*, 17 FCC Rcd
    2844 (2002).

[^686]: What is commonly referred to as MDS or MMDS spectrum includes 33
    different 6 megahertz channels in the 2.1-2.2 GHz and 2.5-2.7 GHz
    spectrum bands. These channels include the Multipoint Distribution
    Service ("MDS"), Multichannel Multipoint Distribution Service
    ("MMDS"), and Instructional Television Fixed Service ("ITFS")
    channels. MDS operators generally use the MMDS and MDS channels and
    lease excess capacity from ITFS operators.

[^687]: The WCS band is located at 2305-2320 MHz and 2345-2360 MHz and
    surrounds the Digital Audio Radio Service ("DARS") spectrum at
    2320-2345 MHz.

[^688]: "Licensees of cellular systems may use alternative cellular
    technologies and/or provide fixed services on a co-primary basis
    with their mobile offerings, including personal communications
    services . . . on the spectrum within their assigned channel block."
    47 CFR § 22.902(d).

[^689]: The lowerbands consist of the cellular (800 MHz) and broadband
    PCS (1900 MHz) bands, the MDS (2.5-2.7 GHz) band, the WCS (2.3 GHz)
    band, and the unlicensed bands. The upperbands consist of the 24 GHz
    (DEMS) band, the LMDS (28 GHz) band, and the 39 GHz band.

[^690]: However, by adjusting factors such as cell size and transmission
    power, the networks can be engineered to the standard level of
    reliability in a telecommunications network, 99.999 percent. This
    level of reliability is also known as "five 9's." *See Sixth
    Report*, at 13435, note 602.

[^691]: *See Seventh Report*, at A-2 -- A-4.

[^692]: *Teligent Completes Its Reorganization -- Company Exits
    Bankruptcy Fully Funded and Debt Free*, News Release, Teligent,
    Sept. 12, 2002; John Rubino, *Teligent Rising*, [Virginia
    Business]{.smallcaps}, Nov. 1, 2002, at 56-58, 61 (citing Teligent
    CEO James Continenza).

[^693]: *Teligent Completes Its Reorganization -- Company Exits
    Bankruptcy Fully Funded and Debt Free*, News Release, Teligent,
    Sept. 12, 2002.

[^694]: IDT Corporation, SEC Form 10-K, Oct. 29, 2002, at 17, 21-24.

[^695]: IDT Corporation, SEC Form 10-K, Oct. 29, 2002, at 17.

[^696]: *IDT Corporation Announces that Winstar Will Become IDT
    Solutions*, News Release, IDT, Dec. 12, 2002.

[^697]: *See Seventh Report*, at A-4; *XO Emerges from Bankruptcy*, [RCR
    Wireless News]{.smallcaps}, Jan. 20, 2003, at 6. As part of the
    reorganization, telecom financier Carl Icahn now has an 80 percent
    ownership interest in the company. *Id.*

[^698]: *See Seventh Report*, at A-4.

[^699]: XO Communications, SEC Form 10-K, Mar. 21, 2003, at 12.

[^700]: *See Seventh Report*, at A-4; First Avenue Networks, *Strategy*
    (visited Jun. 25, 2003) \<http://www.firstavenet.com/\>.

[^701]: *See Seventh Report*, at A-4 -- A-5

[^702]: Dan Meyer, *WorldCom Plans Wireless Exit*, [RCR Wireless
    News]{.smallcaps}, July 8, 2002, at 1; Chris Nolter, *M&A Work at
    WorldCom Cooled in February*, [Daily Deal]{.smallcaps}, Apr. 17,
    2003.

[^703]: Kristin Beckman, *WorldCom Assets Go to BellSouth*, [RCR
    Wireless News]{.smallcaps}, May 19, 2003, at 17; Chris Nolter,
    *BellSouth Bids for WorldCom Unit*, [Daily Deal]{.smallcaps}, May
    13, 2003.

[^704]: *See Seventh Report*, at A-6.

[^705]: Unlicensed spectrum consists of 26 megahertz in the 900 MHz
    band, 83.5 megahertz in the 2.4 GHz band, and 300 megahertz in the 5
    GHz band. *See,* *generally*, 47 C.F.R. Part 15. Unlicensed spectrum
    is used for many purposes, including short-range data transmission
    technologies such as Bluetooth and 802.11, cordless phones,
    microwave ovens, and amateur radio. The spectrum is also used for
    WiFi access. *See* Section II.C.3.f, WiFi, *supra*. Companies using
    unlicensed spectrum to offer fixed wireless point-to-point broadband
    services primarily use the 2.4 GHz band, while some reportedly
    employ both the 2.4 GHz and 5 GHz bands for such services.
    Unlicensed fixed applications generally employ spread spectrum
    technology for long range transmissions in order to minimize the
    risk of interference with other operators. *See Sixth Report*, at
    13439.

[^706]: Many of these companies offer traditional wireline dial-up
    Internet access as well. *See Sixth Report,* at 13444. *See also*,
    Nancy Gohring, *Wireless ISPs: Emerging from the Shadows*,
    [Broadband Wireless Business]{.smallcaps}, March/April 2002, at 1,
    8. Many of the small wireless ISPs believe that by offering service
    and becoming profitable in only one or a few markets before
    expanding to other markets, they will remain financially viable.
    *Id.*

[^707]: *See* *Sixth Report*, at 13444.

[^708]: *See* Appendix E, Map 10, at E-11.

[^709]: Based on the 2000 Census. Many of these lowerband providers
    serve only business customers. Residential fixed wireless Internet
    access is available in at least 338 different counties. These
    counties contain approximately 62 million people or 22 percent of
    the U.S. population.

[^710]: *See Seventh Report*, at A-8.

[^711]: Amendment of Parts 1, 21, 73, 74 and 101 of the Commission's
    Rules to Facilitate the Provision of Fixed and Mobile Broadband
    Access, Educational and Other Advanced Services in the 2150-2162 and
    2500-2690 MHz Bands, WT Docket No. 03-66, *Notice of Proposed
    Rulemaking and Memorandum Opinion and Order*, 18 FCC Rcd 6722
    (2003).

[^712]: Service Rules for Advanced Wireless Services in the 1.7 GHz and
    2.1 GHz Bands, WT Docket No. 02-353, *Notice of Proposed
    Rulemaking*, 17 FCC Rcd 24135 (2002).

[^713]: Under an informal agreement among MDS licensees, the principal
    use of this spectrum is for upstream communications to hub receiving
    facilities. *Id.*

[^714]: *See* *Sixth Report*, at 13388-13389.

[^715]: *See* *Seventh Report*, at 13028-13030.

[^716]: *BCE to Buy Out SBC's Bell Canada Stake*, [TR
    Daily]{.smallcaps}, Nov. 11, 2002.

[^717]: *Investor Briefing*, SBC Communications, Inc., Jan. 28, 2003, at
    8.

[^718]: *Id*.

[^719]: *Investor Briefing*, SBC Communications, Inc., Apr. 24, 2003, at
    11.

[^720]: *Western Wireless International Announces Closing of Sale of
    Interest in Icelandic Wireless Operator*, News Release, Western
    Wireless Corporation, Nov. 26, 2002.

[^721]: *Western Wireless International Agrees to Sell Interest in
    Croation Wireless Operatorr*, News Release, Western Wireless
    Corporation, June 4, 2003.

[^722]: *See* *Seventh Report*, at 13030.

[^723]: *Board Approves Principal Terms of Acquisition of Eurotel*,
    Press Release, Cesky Telecom, June 5, 2003.

[^724]: Linda Mutschler, *AT&T Wireless -- Czech Deal Approved*, Global
    Equity Research, Merrill Lynch, June 5, 2003, at 1.

[^725]: *Verizon Communications Announces Plans To Sell its Equity Stake
    in Iusacell*, Press Release, Verizon Communications, June 13, 2003.

[^726]: *Verizon To Sell Iusacell Stake*, [TRDaily]{.smallcaps}, June
    13, 2003; Joel Millman and Santiago Perez,*Verizon, Vodafone Sell
    Iusacell, Ending Costly Mexico Venture*, [The Wall Street
    Journal]{.smallcaps}, June 16, 2003, at B3.

[^727]: Joel Millman and Santiago Perez,*Verizon, Vodafone Sell
    Iusacell, Ending Costly Mexico Venture*, [The Wall Street
    Journal]{.smallcaps}, June 16, 2003, at B3.