**Before the**

**Federal Communications Commission**

**Washington, D.C. 20554**

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**SEVENTH REPORT**

**Adopted: June 13, 2002 Released: July 3, 2002**

By the Commission: Commissioner Copps issuing a statement.

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

**[Page]{.underline}**

I. INTRODUCTION [3](#introduction)

A. Overview [3](#overview)

B. Status of Competition [4](#status-of-competition)

C. Industry Development [5](#industry-development)

II\. THE CMRS INDUSTRY [9](#the-cmrs-industry)

A. Mobile Telephony [9](#mobile-telephony)

1\. Mobile Telephone Overview and Analysis
[9](#mobile-telephone-overview-and-analysis)

a\. Market Structure [9](#market-structure)

b\. Market Performance [19](#market-performance)

c\. Digital Deployment [25](#digital-deployment)

d\. Pricing Data and Trends [28](#pricing-data-and-trends)

e\. Wireless/Wireline Competition [32](#wirelesswireline-competition)

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

2\. Other Competitors: Resellers and Satellite Operators
[41](#other-competitors-resellers-and-satellite-operators4)

a\. Resellers [41](#resellers)

b\. Satellite Operators [42](#satellite-operators)

3\. International Developments [44](#international-developments)

a\. International Investments [44](#international-investments)

b\. International Comparisons [48](#international-comparisons)

B. Mobile Data [55](#mobile-data)

1\. Introduction [55](#introduction-1)

a\. Domestic Developments [55](#domestic-developments)

b\. International Developments [58](#international-developments-1)

2\. Industry Structure and Performance
[59](#industry-structure-and-performance)

a\. Mobile Telephone Sector [59](#mobile-telephone-sector)

b\. Handheld Devices [61](#handheld-devices)

c\. Paging Sector [66](#paging-sector)

3\. Mobile Data Services [68](#mobile-data-services)

a\. Paging [68](#paging)

b\. SMS and Instant Messaging [68](#sms-and-instant-messaging)

c\. Web Content [70](#web-content)

d\. E-mail and Corporate Server Access
[73](#e-mail-and-corporate-server-access)

e\. Location-Based Services [75](#location-based-services)

f\. Short Range Data Transmissions [78](#short-range-data-transmissions)

4\. Telemetry and Telematics [81](#telemetry-and-telematics)

III\. CONCLUSION [83](#conclusion)

IV\. ADMINISTRATIVE MATTERS [85](#administrative-matters)

APPENDIX A: Fixed Wireless Voice and Data Services

APPENDIX B: Spectrum Auctions Tables

APPENDIX C: Mobile Telephony Tables

APPENDIX D: Mobile Data Tables

APPENDIX E: Maps

# INTRODUCTION

## Overview 

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 seventh of the
Commission's annual reports[^4] on the state of CMRS competition.[^5]

CMRS includes a large number of terrestrial services and some mobile
satellite services.[^6] 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.[^7]
However, because licensees of these other spectrum-based services often
compete with CMRS providers, as well as with other providers of
telecommunications services, the Commission believes that it is
important to consider them in the analysis.

Since the release of the *Sixth Report*, the Commission has expanded its
efforts to improve the quality and granularity of the data used to
examine competition in the CMRS marketplace. For example, this report
utilizes data submitted directly to the FCC, in addition to
non-governmental surveys, for information on mobile telephony
subscribership.[^8] An analysis of this information allows the
Commission to estimate wireless penetration rates on a regional basis in
addition to a national basis.

As part of its ongoing effort to improve its annual CMRS report, the
Commission also held a Public Forum in February 2002 to examine ways in
which to better gather and analyze data for this report, in particular
data regarding the development of rural and underserved wireless
markets.[^9] Participants included representatives from
telecommunications companies, industry associations, consumer groups,
academics, consulting firms, and federal government agencies. In
response, the Commission has integrated into this report the data
submitted at the forum, and adopted a number of suggestions made by
Forum participants on how to obtain and analyze data more effectively.
In addition, the Commission will be issuing a Notice of Inquiry ("NOI")
to help gather more information for next year's report.

This report focuses on two categories of wireless services: mobile
telephony[^10] and mobile data.[^11] We emphasize that these two service
categories are not as clearly delineated in the marketplace. For
example, many mobile telephony operators also offer mobile data services
using the same spectrum, network facilities, and customer equipment.
Therefore, while these service categories are used to provide structure
for this CMRS competition report, the Commission's view of the mobile
services marketplace is not limited by the categories in which this
report places them.

## Status of Competition

In the year 2001, the CMRS industry continued to experience increased
competition, innovation, lower prices for consumers, and increased
diversity of service offerings. The year saw a number of operators
continue to fill in gaps in their national coverage through mergers,
acquisitions, license swaps, and joint ventures.[^12] In parallel with
this process of footprint building,[^13] mobile telephone operators
continue to deploy their networks in an increasing number of markets,
expand their digital networks, and develop innovative pricing plans.

During the past year, the mobile data industry continued to grow and to
evolve. Estimates of the number of mobile Internet users at the end of
2001 range from approximately 8 to 10 million,[^14] up from 2 to 2.5
million at the end of 2000.[^15] Since the writing of the *Sixth
Report*, several mobile data operators have begun upgrading their
networks to allow for faster data access speeds and more advanced
services.[^16] As of March 2002, four nationwide mobile telephone
operators were offering mobile Internet access at speeds generally
ranging from 25-60 kilobits per second ("kbps"), with maximum bursting
rates up to 144 kbps for at least one carrier, in some portion of U.S.
counties covering approximately 181 million people.[^17] In addition,
most handheld personal digital assistant ("PDA") devices[^18] currently
available offer users some method of connecting to the mobile Internet.
Competition within the mobile data sector is developing successfully, as
evidenced by the multitude of dynamic services, service packages, and
pricing plans available to consumers from a variety of providers.

## Industry Development

*[Mobile Telephony]{.underline}*. The mobile telephony sector of CMRS
has experienced continued strong growth and competitive
development.[^19] In the 12 months ending December 2001, the mobile
telephony sector generated over \$65 billion in revenues,[^20] increased
subscribership from 109.5 million to 128.5 million,[^21] and produced a
nationwide penetration rate of roughly 45 percent.[^22] Broadband PCS
carriers and digital SMR providers continue to deploy their
networks.[^23] To date, 268 million people, or 94 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.[^24] Over 229 million people, or 80
percent of the U.S. population, live in counties with five or more
mobile telephone operators competing to offer service.[^25] And 151
million people, or 53 percent of the population, live in counties in
which six different mobile telephone operators are providing
service.[^26]

Digital technology is now dominant in the mobile telephone sector.[^27]
At the end of 2001, digital customers made up almost 80 percent of the
industry total, up from 72 percent at the end of 2000.[^28] Finally, in
part because of competitive pressures in the marketplace, the average
price of mobile telephone service has declined during the year since the
*Sixth Report*, continuing the trend of the last several years.[^29]
According to the U.S. Department of Labor's Bureau of Labor Statistics,
the price of residential mobile telephone service declined by 5.5
percent during 2001.[^30] Another survey indicates that the average
revenue per minute of mobile telephone use fell 31 percent between 2000
and 2001.[^31]

[*Mobile Data*.]{.underline} This report describes mobile data providers
and their corresponding devices in three general categories: (1) mobile
telephone operators offering services primarily on mobile telephone
handsets, (2) providers of mobile data access to handheld PDA devices
and laptop computers, and (3) paging carriers offering services on
pagers and two-way messaging devices. The report's mobile data section
first discusses the key developments and events related to these three
categories of carriers and devices that occurred during 2001 and early
2002. During the past year, the types of mobile data services available
on mobile data devices have become increasingly similar. Therefore, this
year's report provides details on the major mobile data services
available to consumers -- including paging, Short Messaging Service
("SMS"), web access, e-mail and corporate server access, location-based
services, and short range data transmissions -- in a separate section
following the discussion of the three categories of mobile data
providers and devices. During the past year, many mobile telephone
carriers began deploying advanced wireless service network technologies
such as cdma2000 1xRTT and General Packet Radio Service ("GPRS").[^32]
These deployments contributed to the further convergence of mobile voice
and mobile data services, which was marked by the emergence of
smartphone devices that combine the organization and data-centric
features of PDAs with the voice capabilities of mobile telephones.[^33]

![](media/image1.png){width="6.49375in" height="8.403472222222222in"}

# THE CMRS INDUSTRY

## Mobile Telephony

This report defines the mobile telephone sector to include all operators
that offer commercially available, interconnected mobile phone services.
These operators provide access to the public switched telephone network
("PSTN") via mobile communication devices employing radiowave technology
to transmit calls. As discussed in previous reports,[^34] providers
using cellular radiotelephone, broadband PCS, and SMR licenses dominate
this sector.[^35] Resellers and operators using satellite systems also
offer mobile telephone services. Because these providers offer mobile
telephone services that are essentially interchangeable, or at least
close substitutes, from the perspective of most consumers, they are
discussed in this report as a cohesive industry sector.

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

### Mobile Telephone Overview and Analysis

#### Market Structure

##### Spectrum Allocation

Currently, mobile telephony operators primarily use three types of
spectrum licenses to provide service: cellular, broadband PCS, and
SMR.[^36]

[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
Metropolitan Statistical Areas ("MSAs"), 428 Rural Service Areas
("RSAs"), and a market for the Gulf of Mexico.[^37] Two cellular systems
were licensed in each market area. The Commission allocated 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.[^38]

[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.[^39] The most recent broadband PCS auction was completed in
2001.[^40] The Commission has set aside the spectrum between 1850 MHz
and 1990 MHz for broadband PCS. This spectrum includes 120 megahertz 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).[^41] Two of the 30 megahertz blocks (A and B blocks) are
assigned on the basis of 51 Major Trading Areas ("MTAs").[^42] One of
the 30 megahertz blocks (C block) and all three of the 10 megahertz
blocks are assigned on the basis of 493 BTAs.[^43]

[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.[^44] The
Commission has since licensed additional SMR spectrum through
auctions.[^45] 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.[^46] 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, [^47] the primary use for SMR traditionally has been dispatch
services.[^48] 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.[^49] SMR systems have also had
the ability to offer interconnected service, but until the development
of digital technologies, analog SMR systems had very 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 as a part of
their service offerings.[^50] At the same time, traditional dispatch
services are being provided increasingly on non-SMR spectrum bands.[^51]
Furthermore, in apparent response to the dispatch functionality of SMR
services, cellular and 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.[^52]

[Spectrum Cap]{.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.[^53] 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.[^54]
Many licensees hold more than one license in a particular market.
Previously, under the Commission's CMRS spectrum cap (which applies to
180 MHz of spectrum), no entity could control more than 45 megahertz of
cellular, broadband PCS, and SMR[^55] spectrum in an MSA, or more than
55 megahertz in a RSA.[^56] 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.[^57] In
addition, the Commission forbids an entity from having cross-interests
in cellular licenses on both blocks within an RSA.[^58]

##### Building Nationwide Networks

In the United States, there are six mobile telephony operators that
analyst typically describe as nationwide: AT&T Wireless Services, Inc.
("AT&T Wireless"), Sprint PCS,[^59] Verizon Wireless, LLC ("Verizon
Wireless"),[^60] VoiceStream Wireless Corp. ("VoiceStream"),[^61]
Cingular Wireless, LLC ("Cingular Wireless" or "Cingular"),[^62] 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.[^63] 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
Communications Corp. ("Dobson").

The Commission has concluded previously that operators with larger
footprints can achieve certain economies of scale and increased
efficiencies compared to operators with smaller footprints.[^64] Such
benefits, along with advances such as digital technology, have permitted
companies to introduce and expand innovative pricing plans such as
digital-one-rate ("DOR") type plans, reducing prices to consumers.[^65]

Since the end of 1999, carriers have been building nationwide footprints
through various forms of transactions.[^66] 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. More recently,
national operators have sought to fill in gaps in their coverage
areas.[^67] Since the writing of the *Sixth Report*, a number of such
transactions have been announced. The most significant are discussed
below, along with a discussion of the spin-off of AT&T Wireless from its
parent AT&T Corp. ("AT&T").

###### Combinations

*AT&T Wireless/TeleCorp --* AT&T Wireless announced in February 2002
that it had completed its acquisition of former network affiliate
TeleCorp PCS, Inc. ("TeleCorp").[^68] On October 8, 2001, AT&T Wireless
announced plans to acquire TeleCorp in an all-stock transaction valued
at \$4.7 billion.[^69] AT&T Wireless acquired the 77 percent of TeleCorp
it did not already own by issuing approximately 146 million additional
AT&T Wireless Services common shares and assumed \$2.1 billion in net
debt and approximately \$221 million in preferred securities.[^70] With
this transaction, AT&T Wireless acquired markets covering 32 million
potential customers, or "POPs,"[^71] in 14 states - primarily in the
Southeast and Midwest, as well as the commonwealth of Puerto Rico.[^72]
TeleCorp was AT&T's largest affiliate with approximately 800,000
subscribers at the time of its acquisition.[^73]

*Verizon Wireless/Price Wireless* -- On November 15, 2000, Verizon
Wireless announced it had signed an agreement to acquire Price
Communications Wireless ("Price Wireless") for approximately \$2
billion.[^74] This agreement was conditioned on the completion of
Verizon Wireless's planned initial public offering ("IPO") by September
30, 2001. With that deadline unmet, in December 2001, Verizon Wireless
and Price Wireless agreed to alter their original agreement.[^75]
Instead of an outright acquisition, the companies agreed to form a
limited partnership consisting of Price Wireless's wireless operations
and certain Verizon Wireless assets. Verizon Wireless will control and
manage the partnership. In exchange for its assets, Price Wireless will
receive an interest in the partnership valued at \$1.15 billion, and
Verizon Wireless will assume \$550 million of Price Wireless's debt.

*Sprint PCS Affiliates* -- A number of Sprint PCS network affiliates
have acquired, or announced plans to acquire, other affiliates. On
August 13, 2001, UbiquiTel, Inc. ("UbiquiTel"), which serves markets in
several states in the western and midwestern United States, acquired
privately held VIA Wireless ("VIA"), an affiliate serving the central
valley of California.[^76] The acquisition doubled UbiquiTel's
subscriber base to over 100,000 (at that time) and increased its service
territory by 3.4 million POPs to 11.1 million.[^77] On November 30,
AirGate PCS, Inc. ("AirGate") completed its acquisition of iPCS Inc.
("iPCS").[^78] The combined company, serving over 300,000 subscribers,
has a service territory of more than 14.5 million POPs across seven
states in the Southeast and Midwest.[^79] Finally, in the spring of
2002, US Unwired Inc. ("US Unwired") announced that it had completed the
acquisitions of two other affiliates, Georgia PCS Management, LLC
("Georgia PCS") and Independent Wireless One holdings, Inc.
("IWO").[^80] The two transactions, with a combined value of over \$550
million, added roughly 160,000 subscribers to US Unwired's existing base
of 236,000.[^81] The combined companies' service territory covers more
than 17.6 million POPs in the southeast and northeastern regions of the
county.[^82]

*ALLTEL/CenturyTel* -- On March 19, 2002, ALLTEL announced an agreement
to purchase all the wireless properties owned by CenturyTel Inc.
("CenturyTel") for \$1.65 billion in cash.[^83] Through the acquisition,
ALLTEL will add more than 700,000 wireless customers and expand its
footprint into new markets across Arkansas, Louisiana, Michigan,
Mississippi, Texas, and Wisconsin.[^84] Combined with CenturyTel's
properties, ALLTEL will have 7.4 million wireless customers in 24
states. ALLTEL claims that the acquisition will allow the carrier to
connect to areas where it has significant existing operations, and to
increase the profitability of the CenturyTel properties through the
introduction of regional and national rate plans as well as through cost
reductions. The Commission granted consent to the license transfers on
June 10, 2002.[^85]

*US Cellular / PrimeCo Communications* -- On May 10, 2002, US Cellular
announced that it was acquiring PrimeCo Wireless Communications LLC's
("PrimeCo") Chicago-area mobile wireless business for approximately
\$610 million.[^86] US Cellular, which has networks adjacent to the
Chicago market, is acquiring PrimeCo's CDMA network and subscriber base
of 350,000.[^87] The transaction is subject to approval by the
Commission and the Department of Justice.

*Nextel/Pacific Wireless Technologies* -- On July 27, 2001, Pacific
Wireless Technologies, Inc. ("Pacific") and Nextel filed an application
with the Commission seeking consent to transfer Pacific's 800 MHz SMR
licenses to Nextel.[^88] The deal was closed in December 2001.[^89]
Pacific, one of only two other digital SMR providers besides Nextel,
launched service in July 2000.[^90] Its digital SMR network in the
central valley of California covered approximately 13.5 million
POPs.[^91] Pacific offered consumers a package of digital wireless
services, including digital dispatch and interconnected mobile voice
services, using an iDEN technology similar to that deployed throughout
Nextel's markets.[^92] Pacific served approximately 7,500
subscribers.[^93]

###### Joint Ventures

*Cingular Wireless/VoiceStream* -- In October 2001, Cingular Wireless
and VoiceStream announced an infrastructure sharing joint venture that
the companies claim will allow them to share their GSM networks in
California, Nevada, and New York.[^94]

*Cingular Wireless/AT&T Wireless* -- 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.[^95]

###### Spin-Off

On July 9, 2001, AT&T Wireless was spun-off from its parent AT&T and
became a separate, independently-traded company.[^96] AT&T executed the
spin-off in two steps. First, AT&T redeemed all of the outstanding
shares of AT&T Wireless Group tracking stock in exchange for shares of
the new AT&T Wireless common stock.[^97] Second, AT&T distributed the
remaining shares of AT&T Wireless common stock to holders of AT&T common
stock, less approximately \$3 billion, or about 7.3 percent, that AT&T
retained. By the end of 2001, AT&T had disposed of its remaining
interest in AT&T Wireless.[^98]

###### Affiliations

Three national 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.[^99] The
affiliations were established to accelerate the build-out of the larger
companies' networks by granting smaller affiliates the exclusive right
to offer mobile telephony for those companies, in some cases under the
larger companies' brand names, in selected mid-sized and smaller
markets.[^100]

*AT&T* *Wireless* -- The AT&T Wireless family consists of AT&T Wireless,
as well as the affiliation it has with two companies: Triton PCS
Holdings, Inc. ("Triton PCS") and Edge Wireless, LLC ("Edge").[^101] 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.[^102] While Triton PCS is marketed under the brand
name SunCom[^103] and Edge is marketed under its own name, both
companies provide service as a "Member of the AT&T Wireless Network."
These affiliates have been deploying TDMA technology throughout their
networks.

*Sprint PCS* -- The Sprint PCS family consists of Sprint PCS and 12
affiliates.[^104] 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.[^105] 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.[^106] In return, Sprint receives 8 percent of the
affiliates' local service revenue.[^107] Sprint PCS affiliates now
provide service to more than 2 million subscribers.[^108]

*Nextel* -- The Nextel family consists of Nextel and Nextel Partners,
Inc. ("Nextel Partners"). In an arrangement similar to that of AT&T with
its affiliates, Nextel sold some of its SMR licenses to Nextel Partners
in exchange for a minority ownership interest in the company.[^109]
Nextel Partners is building out an iDEN network compatible with
Nextel's, and Nextel assists Nextel Partners in obtaining substantially
the same terms Nextel receives from vendors for equipment and
services.[^110] Both Nextel and Nextel Partners market their services
under the Nextel brand name.

#### Market Performance

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 indicative of competition *per se*,
demonstrate the increased demand for and reliance placed on mobile
telephony services. In addition, continued downward price trends[^111]
and continued expansion of mobile networks into new and existing markets
are related in different ways to the level of competition for mobile
telephony customers. These metrics generally demonstrate a high level of
competition for most consumers.

In an effort to improve the accuracy of its estimate of U.S. mobile
telephone subscribership, the Commission has begun analyzing information
filed directly with the FCC. This information, the Numbering Report
Utilization / Forecast data ("NRUF"),[^112] tracks phone number usage
information for the United States.[^113] 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.[^114] In previous years, for
purposes of this report, the Commission had relied on national
subscribership data from a highly-respected survey conducted by the
Cellular Telecommunications and Internet Association ("CTIA"). CTIA's
survey is voluntary; it does not receive information from all carriers
and must therefore estimate the subscribership for carriers not
reporting.[^115] In addition, NRUF data, in comparison to CTIA's survey,
is collected on a small area basis and thus allows regional
subscribership comparisons.[^116] For these reasons, for purposes of
this report the Commission uses NRUF data as the basis for its estimate
of mobile telephony subscribership, although we report the CTIA data as
well.

##### Subscriber Growth

In 2001, the mobile telephone sector experienced another year of
impressive subscriber growth.[^117] As of December 2001, the Commission
estimates that the sector had 128.5 million subscribers,[^118] which
translates into a nationwide penetration rate of roughly 45
percent.[^119] CTIA's estimate for year-end 2001 was 128.4 million
subscribers, roughly the same as the FCC estimate, and a 17 percent
increase over CTIA's estimate of 109.5 million subscribers for December
2000.[^120] CTIA's absolute increase of 18.9 million subscribers
represents the second largest 12-month jump in subscribership in the
history of the sector, but 4.5 million less than 2000's record increase
of 23.5 million additional subscribers.[^121] We note that in 2001, for
the first time since CTIA began tracking subscribership, the absolute
number of new subscribers of mobile telephony service is lower than that
of the previous year. Because this change has occurred for only one
year, it is not clear whether this represents a more general leveling
off of wireless growth. We also note that the growth rate for mobile
phone subscribers have been declining for several years.

##### Regional Penetration Rates

As stated earlier, an additional advantage of NRUF data over the CTIA
data is that it allows the Commission to compare the spread of mobile
telephone subscribership across different areas within the United
States. Economic Areas ("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.[^122] 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.[^123] 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. 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).

Regional penetration rates for the 172 EAs covering the 50 United
States, sorted by EA population density, can be seen in Appendix C,
Table 3.[^124] The rates range from a high of 57 percent in the Atlanta,
GA-AL-NC EA (EA 40) to a low of 19 percent in the Paducah, KY-IL EA (EA
72). The Anchorage, AK EA (EA 171), with the lowest population density,
had a penetration rate of 41 percent, while the Tampa-St.
Petersburg-Clearwater, FL EA (EA 34), with the highest density, had a
penetration rate of 38 percent. As previously stated based on an
analysis of NRUF data, the national penetration rate is 45 percent.

##### Minutes-of-Use

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 2001. Increasing
MOUs most likely are a result of the decreasing prices and the wider
acceptance of and reliance upon wireless service.

According to the CTIA mobile telephone survey, MOUs were 385 between
July and December 2001, an increase of 51 percent from 255 MOUs during
the same period in 2000, in addition to a 38 percent increase from
1999.[^125] Other analysts also report higher MOUs in 2001. Paul Kagan
and Associates estimated MOUs of 410 in mid-2001, an increase of 22
percent from 335 in mid-2000.[^126] J.D. Powers & Associates estimated
422 MOUs, an increase of 32 percent from 320 a year earlier.[^127]

##### Average Revenue Per Unit

A widely-used economic metric for the CMRS industry is average monthly
revenue per subscriber (often referred to as average revenue per unit,
or "ARPU"). For the mobile telephone sector, ARPU,[^128] until recently,
decreased almost continuously since CTIA began tracking it in 1987,
going from a peak of \$98.02 in December 1988 to a low of \$39.43 in
December 1998.[^129] However, since 1999, ARPU has begun increasing,
rising to \$47.37 in December 2001, a 20 percent increase over the last
three years. This is true even though per-minute prices have been
declining throughout this period.[^130] 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.[^131]

##### Churn

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 24 percent of its customers in a single year.[^132]
Most carriers report churn rates between 1.5 percent and 3 percent per
month.[^133] At current rates, more than 30 percent of subscribers
change service providers each year.[^134]

Consistent with findings in the *Sixth Report*, customers indicated
network quality and cost as the main reasons for changing
providers.[^135] In a survey taken in the second quarter of 2001,
roughly equal percentages of subscribers who switched carriers did so in
search of better network quality (18.4 percent) or better monthly
service price plans (17.4 percent).[^136] Another 12 percent wanted to
take advantage of a sale or promotion.[^137]

##### Market Entry

To track the level of competition in the mobile telephony market, 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 network buildout notifications filed with the
Commission.[^138]

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.[^139] Therefore, this analysis
overstates the total coverage in terms of both geographic areas and
populations covered.

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.[^140] 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.[^141]

To date, 268 million people, or 94 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.[^142] However, these counties make up only 50 percent of the total
land area of the United States, reflecting the nation's uneven
population distribution.[^143] On the other hand, the land area of these
counties, 1.7 million square miles, is roughly 40 percent larger than
the combined land area of the 15 members of the European Union (1.2
million square miles). In addition, over 229 million people, or 80
percent of the U.S. population, live in counties with five or more
mobile telephone operators competing to offer service.[^144]

While growth in the percentage of the population covered by three or
more providers has been small in the past year,[^145] the percentage
growth of the population covered by seven or more providers has been
significant. Sixty million people, or about 21 percent of the
population, can now choose from among seven or more different mobile
telephone operators providing service somewhere in their counties,
roughly double the percentage from 2000.[^146]

#### Digital Deployment

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.[^147] 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
increases spectral efficiency in comparison to analog technology.
Increased capacity on digital networks has in turn permitted 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.[^148] 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.
Digital subscribers now make up approximately 80 percent of all wireless
subscribers, up from 72 percent last year.[^149] During 2001, the number
of customers subscribing to digital services climbed 30 percent, from
approximately 79 million to 103 million.[^150] Approximately 26 million
mobile telephony subscribers are analog only.[^151]

Over 85 percent of the subscribers of the six largest carriers are using
digital service.[^152] All of Sprint PCS's, VoiceStream's, and Nextel's
subscribers are on digital plans, while 96 percent of AT&T Wireless's,
84 percent of Cingular Wireless's,[^153] and almost 75 percent of
Verizon Wireless's customers subscribe to digital calling plans.[^154]
Even among the smaller, regional carriers, digital subscribership is
widespread.[^155] Leap Wireless International Inc. ("Leap") and Qwest
Corp. are 100 percent digital, while ALLTEL, Dobson, US Cellular, and
Rural Cellular Corp. ("Rural Cellular") range from 62 to 74
percent.[^156] Western Wireless and CenturyTel trail with an
approximately 30 percent digital subscriber base each, although each has
shown rapid conversion to digital over the past year.[^157]

##### Coverage by Technology Type

Operators also continued to expand the footprints of their chosen
digital technology in 2001. This drive has stemmed from operators with
analog networks needing to improve capacity, increase their advanced
service offerings, and provide compatibility for digital-based roaming
partners, as well as from newer, all-digital network operators who need
to expand their footprints to increase their competitiveness.[^158]

The four main digital technologies used in the United States are: Code
Division Multiple Access ("CDMA"), Global System Mobile Communications
("GSM"), integrated Digital Enhanced Network ("iDEN"), and Time Division
Multiple Access ("TDMA").

TDMA is being phased out as its main advocates, AT&T Wireless and
Cingular Wireless, have announced plans to overlay their existing TDMA
networks with GSM/GPRS technology.[^159] Furthermore, the trade group
that had represented TDMA technology announced in December 2001 that it
was dissolving, as it had "successfully served its mission."[^160]

AT&T Wireless still expects to use TDMA for many years, but as reported
in the *Sixth Report*, the company announced plans to overlay GSM/GPRS
on its TDMA network in order to improve its wireless data capabilities
and enhance its migration to 3G technology.[^161] By the end of 2001,
AT&T Wireless had rolled out GSM/GPRS to 45 percent of the POPs covered
by its network.[^162] AT&T Wireless has also announced that it plans to
deploy GSM/GPRS in the network that it recently acquired through the
purchase of TeleCorp.[^163]

Cingular Wireless, which currently has a mix of TDMA (covering 70
percent of its POPs) and GSM (covering 30 percent of its POPs) networks,
announced in October 2001 that it would overbuild its entire TDMA and
remaining analog networks with GSM/GPRS.[^164] Cingular Wireless expects
to have 50 percent of its POPs covered with GSM by the end of 2002 and
the remainder covered by the end of 2003.[^165] Cingular Wireless will
continue to provide TDMA service to its current customers, but it
expects that many will upgrade to its GSM technology over time.[^166]
Cingular Wireless said the national network upgrade will cost
approximately \$3 billion.[^167] And, as noted above, Cingular Wireless
and AT&T Wireless have announced plans to build a GSM/GPRS network along
3,000 miles of interstate highways in a number of western and midwestern
states.[^168]

As a result of these 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.

Of the other four nationwide mobile telephone operators, Sprint PCS and
Verizon Wireless use CDMA as their digital technology, VoiceStream uses
GSM, and Nextel uses iDEN.

To date, 276 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 technologies, or some combination of the
three.[^169] These counties make up 70 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, the
Commission has prepared maps of each technology which combine the
network coverage of all of the relevant operators.[^170]

CDMA has been launched in at least some portion of counties containing
256 million people, or roughly 90 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.[^171] To date, digital SMR operators have launched
iDEN-based service in at least some portion of counties containing over
245 million people, or approximately 86 percent of the U.S.
population.[^172]

#### Pricing Data and Trends

Equity analysts and other industry observers typically describe wireless
price competition in the United States as "competitive," "intense," and
"aggressive."[^173] While it is difficult to identify sources of
information that track mobile telephone prices in a comprehensive
manner,[^174] these claims are supported by a number of reports and
other available data indicating that the cost of mobile telephony
service has fallen since the *Sixth Report*, continuing the trend of the
last several years.

According to one economic research and consulting firm, mobile telephony
prices in the 25 largest U.S. cities declined roughly 7.3 percent in
2001, following a 6.9 percent decline in 2000.[^175] The average cost of
monthly service[^176] -- which was calculated across four typical usage
plans (30, 150, 300 and 600 minutes) -- dropped from \$42.53 in December
1999 to \$39.60 in December 2000 to \$36.70 in December 2001.[^177] Of
the four typical usage levels, the greatest price decline was for 600
minutes of airtime, down 11.7 percent, while usage at 150 and 300
minutes saw more modest reductions.[^178] In contrast, the monthly cost
of 30 minutes of airtime increased 5.9 percent.[^179]

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").[^180] Cellular CPI data is published on a national basis
only.[^181] During 2001, the Cellular CPI decreased by 5.5 percent while
the overall CPI increased by 1.6 percent. In comparison, during the same
period, the local telephone services component increased by 4.5 percent
and the long distance telephone services component decreased by 1.8
percent. The Cellular CPI has declined almost 33 percent since the end
of 1997 when BLS began tracking it.

As a third pricing indicator, some analysts believe average revenue per
minute is a good proxy for mobile pricing.[^182] CTIA's survey indicates
that the average revenue per minute of mobile telephone use fell 31
percent between 2000 and 2001. This is calculated by dividing the
estimate of ARPU by the estimate of MOUs, yielding the revenue per
minute that the carrier is receiving.[^183] Since 1994, average revenue
per minute has fallen from \$0.47 in December 1994 to \$0.12 in December
2001, a decline of 74 percent.[^184]

##### Developments in Pricing Plans

The continued rollout of differentiated pricing plans indicates a
competitive marketplace. In the mobile telephone sector, a single
operator often tries a new and innovative pricing plan, and is later
imitated by competitors if the plan proves to be successful. For
example, many in the industry questioned AT&T Wireless's wisdom when it
introduced the first Digital One Rate ("DOR") plan in May 1998.[^185]
Today all of the nationwide operators offer a similar type of DOR
pricing plan that allows customers to purchase a bucket of MOUs on a
nationwide or nearly nationwide network without incurring roaming or
long distance charges.[^186]

A more recent example of this was the extension by carriers of unlimited
or virtually unlimited night or weekend minutes to their DOR plans. In
January 2001, Cingular Wireless started the trend when it promoted the
feature as part of its campaign, launched during the Super Bowl, to
promote its new brand ("Cingular Wireless").[^187] Virtually every other
national carrier (and several of the regional carriers) followed suit
over the course of the year.[^188]

##### Roaming

All mobile calling plans specify a calling area -- such as a particular
metropolitan area, the East Coast, the carrier's entire network, or the
entire United States -- within which the subscriber can make a call
without 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.[^189] This
source of revenue is particularly important to some rural and smaller
carriers.[^190]

CTIA reported a slight rise in roaming revenues for the mobile telephony
industry in 2001, from \$3.88 billion at the end of 2000 to \$3.94
billion in 2001, reversing the slight decline reported from 1999 to
2000.[^191] Roaming revenues as a percentage of total service revenue
have been declining for years, from 11 percent reported in December 1997
survey to 5.6 percent in the June 2001 survey.[^192] CTIA attributes
this decline to the growth of DOR plans and the extended calling areas
established by many of the larger carriers.[^193]

##### Prepaid Service

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,[^194] certain
carriers have reevaluated their business plans with respect to prepaid
subscribers, given their typically lower ARPUs and higher churn rates in
comparison to postpaid subscribers.[^195] Analysts estimate that
approximately 8 to 10 percent of U.S. wireless phone users subscribed to
prepaid plans in 2001, roughly unchanged from what we found in the
*Sixth Report*.[^196]

At the end of the third quarter of 2001, Verizon Wireless's subscriber
base was approximately 6 percent prepaid, AT&T Wireless's and Cingular
Wireless's somewhat less than 10 percent, and VoiceStream's was much
higher, at 27 percent.[^197]

In place of a traditional prepaid offering, Sprint PCS has its Automatic
Spending Limit ("ASL") program (now called "Clear Pay").[^198] Sprint
PCS introduced ASL in late 1999 in an attempt to target an
under-penetrated segment of the population, the sub-prime credit
category.[^199] Depending on a potential customer's credit profile, he
or she is offered either an account with no spending limit and no
deposit, or is designated an ASL customer.[^200] ASL customers have the
same choice of phones, contracts, and promotions as non-ASL customers,
but they are subject to spending limits or a deposit, or both.[^201]
Analysts claim that ASL is more attractive than prepaid to the
credit-challenged, since postpaid plan rates are lower, the phone
selection is greater, and the promotions are better than those available
to prepaid subscribers.[^202] Approximately 29 percent of Sprint PCS's
subscribers are now ASL, and about 50 percent of Sprint PCS's gross
subscriber additions[^203] in the fourth quarter of 2001 were ASL.[^204]

#### Wireless/Wireline Competition

Once solely a business tool, wireless phones are now a mass-market
consumer device.[^205] 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 45 percent. In addition, one study found
that 64.3 million households, or 61 percent of all U.S. households, had
at least one wireless phone.[^206] Another study found that 58 percent
of Americans 12 and older now own a mobile phone.[^207]

##### Wireless Substitution

While firm data is difficult to come by, analysts estimate that 3 to 5
percent of wireless customers use their wireless phones as their only
phone.[^208] Though these estimates indicate that 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. One analyst claimed that 20 percent of
residential customers had replaced "some" wireline phone usage with
wireless, and that 11 percent had replaced a "significant
percentage."[^209] According to a USA Today/CNN/Gallop poll, almost one
in five mobile telephony users regard their wireless phone as their
primary phone.[^210]

Several local carriers have attributed declining access line growth
rates in part to substitution by wireless.[^211] The number of
residential access lines served by BellSouth, SBC, and Verizon dropped
by almost 3 percent during 2001, more than 2.5 million lines.[^212] A
top executive at Verizon attributed the decline in the number of access
lines served by his company, the first in the company's history, in part
to the shift to wireless phones.[^213] One study estimated that, by the
end of 2001, wireless had displaced 10 million access lines, primarily
by consumers choosing wireless over installing additional access
lines.[^214]

A number of payphone providers claim wireless use is significantly
decreasing payphone profits.[^215] In January 2002, Verizon began a
trial program, which is still running, in which payphone users would pay
a cheaper, per-minute rate for local calls, instead of a higher rate for
a call of unlimited length.[^216] Verizon introduced the program as a
competitive market response to the "wireless challenge." In February
2001, BellSouth announced that it was exiting the payphone business in
part due to business lost to wireless phones.[^217]

Wireless plans are substituting for traditional wireline long distance
as well.[^218] Many of the calling plans offered by the nationwide
wireless carriers include free nationwide long distance.[^219] One
analyst claims that 20 percent of AT&T's customers, or 5 million people,
have replaced some wireline long distance usage with wireless.[^220]
AT&T itself attributed the decline in its long distance calling volumes
and revenues in part to wireless substitution.[^221] Cingular Wireless
advertises its nationwide calling plans with the slogan, "Never Pay Long
Distance Again."[^222]

##### Wireless Alternatives

An increasing number of mobile wireless carriers offer service plans
designed to compete directly with wireline local telephone service. For
example, Leap, through its Cricket subsidiary, now offers its "Around
Town Phone" mobile telephone service in 40 markets in 20 states.[^223]
At the end of 2001, Leap had more than 1.1 million customers, having
added more than 900,000 during 2001.[^224] Leap's service allows
subscribers to make unlimited local calls and receive calls from
anywhere in the world for one flat rate of \$30 per month.[^225] Roaming
outside the local area is not available,[^226] and customers pay extra
for long distance calls. Leap states that, on average, its customers use
1,150 minutes a month, a figure which the company claims is comparable
to typical landline usage.[^227] According to the company, about 32
percent of their customers use their Cricket phones as their only
phone,[^228] and more than 80 percent use their Cricket phones at
home.[^229]

Other companies offering unlimited local calling plans include: US
Cellular in Tennessee; [^230] ALLTEL in Arizona, New Mexico, North
Carolina, Nebraska, and Arkansas;[^231] MetroPCS in California, Florida,
and Georgia;[^232] NorthCoast PCS in Ohio;[^233] First Cellular of
Southern Illinois ("First Cellular") in Illinois,[^234] Rural Cellular
in Vermont, New Hampshire, New York, Kansas, Minnesota, Maine, North
Dakota, South Dakota, and Wisconsin;[^235] Midwest Wireless in
Minnesota;[^236] and Ntelos Inc. ("Ntelos") in Virginia.[^237]

For around \$50, many carriers offer regional or national calling plans
with 500 or more "anytime" minutes and over 3000 night and weekends
minutes.[^238] In November 2001, VoiceStream began offering for a
limited time virtually unlimited regional calling plans, its
"Neighborhood" rate plans.[^239] For \$50 to \$60 per month, subscribers
get a calling plan that includes 3,000 minutes (usable anytime) and the
ability to roam across several states on VoiceStream's network without
extra fees. Long distance from VoiceStream's network to anywhere within
those states is included as well. Subscribers on VoiceStream's Northeast
Neighborhood plan, for example, can call anywhere on VoiceStream's East
Coast network from southern Maine to northern Virginia without incurring
roaming charges.[^240]

#### Geographical Comparisons: Urban vs. Rural

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, among other questions, to
address this issue.[^241] Several participants offered their opinions on
these questions, which are discussed in more detail below.

##### Rural-Specific Data

Many of the analysts at the forum agreed that there was a lack of
rural-specific data, as well as data on sub-national trends generally,
and some suggested that the Commission should consider collecting data
on local markets.[^242] Other participants, while recognizing the value
of such data, expressed concerns about the costs and burdens of imposing
new reporting requirements on carriers to obtain such information.[^243]

##### Definition of Rural

As the Department of Education stated in 1994, "few issues bedevil
analysts and planners . . . more than the question of what actually
constitutes 'rural.'"[^244] 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.[^245] The Commission has used
RSAs as a proxy for rural areas for certain purposes, such as its CMRS
spectrum cap proceeding, 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."[^246] Some participants in the forum questioned
whether the urban / rural distinction is currently meaningful in the
context of mobile telephony.[^247]

While the Commission does not have a statutory definition of what
constitutes a rural area, in an attempt to gain some insight into the
competitive differences within the different geographic areas of the
United States, this report analyzes market entry data using a variety of
criteria, including EA nodal versus EA non-nodal counties,[^248] CMAs,
and population density. This section of the report also discusses data
presented at the forum on the cost of mobile telephony service in rural
areas.

###### Rural Rollout {#rural-rollout .unnumbered}

*EA Nodal vs. Non-Nodal Counties*

Each EA consists of one or more counties that are "Economic Nodes" and
the surrounding counties that are economically related to it.[^249] 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.[^250] As a proxy for urban and rural
geographic areas, we have looked at counties which 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 3.1 mobile
competitors, while the nodal counties have an average of 5.5
competitors.

*MSAs vs. RSAs*

In considering what constitutes a rural area, Ken Johnson, the Director
of Legislative and Regulatory at RTG, stated, with reservations, that
"RSAs are a good place to start."[^251] 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*

Two forum participants, Johnson of RTG and Rubin of Western Wireless,
indicated that population density is a significant element of defining
rural.[^252] Johnson suggested that 100 people per square mile might be
a reasonable place to make an urban versus rural split.[^253] 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
3.2 mobile competitors, while the more densely populated counties have
an average of 5.5 competitors.

*Summary*

These three exercises of defining urban versus rural (EA Nodal vs.
Non-Nodal Counties/MSAs vs. RSAs/Population Density) provide remarkably
similar estimates of the average number of competitors in urban versus
rural markets. On average, rural markets have slightly more than three
providers, while urban markets have between five and six providers.

###### Rural Pricing {#rural-pricing .unnumbered}

Econ One conducted an analysis in October 2001 of mobile telephony
pricing in rural versus urban markets.[^254] Econ One reviewed the
pricing plans of 25 markets it considered to be rural.[^255] The average
population of the rural markets was 95,000, compared to the average
population of 4.4 million in the top 25 U.S. cities. Econ One found that
there was virtually no difference in the average monthly charge for
wireless service between the two groups.[^256] The charge for the top 25
markets was \$37.39, while the charge for rural markets was slightly
less at \$36.34, a difference of 2.9 percent. Further, Mahla noted that
Econ One's study showed one difference between rural and urban markets
in that there was a much wider spread in pricing among rural markets as
compared to urban markets use. Specifically, the difference between the
least and the most expensive pricing plans was 8.3 percent in the top 25
U.S. cities versus 59 percent in the cities in the randomly-sampled RSAs
used in the Econ One analysis.[^257] Although these results are
interesting, Mahla cautioned about drawing "a tremendous number of
conclusions about \[the study\] because we've only done one data
point."[^258]

Addington of RCA also presented some pricing data specific to the rural
wireless company he manages in Illinois. First Cellular offers a number
of plans, including an unlimited local calling plan.[^259] Addington
claims that the average price per minute of First Cellular has declined
from \$0.79 in 1995 to \$0.10 in 2001, dropping 70 percent from 1999 to
2001 alone.[^260] First Cellular's most popular plan for 2002 will
average \$0.04 per minute.[^261]

There appear to be differences in the number of market participants
between our proxies for rural and urban wireless markets. Specifically,
the proxies showed that there are, on the average, at least two more
competitors in urban markets than in rural markets. However, at the
public forum, Dobson's and RCA's representatives contended that it is
not clear those differences are meaningful in terms of competition.
According to Stephens of Dobson, "competition exists very heavily
throughout small market America."[^262] Addington of RCA agreed:
"Competition is real and . . . it's out there."[^263] Some of the
participants claimed that that reason for this may be the competitive
pressures created by the very existence of nationwide operators. As
explained by Stephens of Dobson:

> In most respects, small market carriers like Dobson are subject to the
> same competitive pressures as the 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 and the prices of wireless handsets. No matter
> where they live, customers expect and demand the diversity of services
> at competitive rates.[^264]

Addington of RCA experienced similar challenges in his role as CEO of
First Cellular: "If you want to measure \[competition\], come with me on
a sales call, sit with me at a customer's location, I\'ll offer my
unlimited \[rate plan\]. AT&T will come in and offer their one rate
\[plan\]. Sprint will come in and offer something else \-- free phones,
free this \-- let me tell you, that's competition."[^265] Econ One's
pricing study found evidence of this nationwide pricing effect, in that
its study showed no differences in service costs between rural and urban
markets.[^266]

### Other Competitors: Resellers and Satellite Operators4

This section discusses two other types of operators that are competing
in the mobile telephone segment: resellers and satellite operators.

#### Resellers

Resellers offer service to consumers by purchasing airtime at wholesale
rates from facilities-based providers and reselling it at retail
prices.[^267] 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.[^268] WorldCom claims to be the largest reseller
of post-paid wireless services in the United States with nearly 2
million customers;[^269] however, in June 2002, the company announced
that it had decided to exit the resale business.[^270]

Recently, a new version of reseller, referred to as a "mobile virtual
network operator," or "MVNO," has begun to appear in this country after
experiencing some success in Europe and Asia. While some contend that
MVNO is just a new catch phrase for reseller, others argue that MVNO
arrangements differ from traditional resale in significant ways.[^271]
For example, advocates contend that MVNOs, by focusing on brand
development, have greater control over subscribers and will be better
able to penetrate certain niche markets than a national company
concerned with large market segments.[^272]

Sprint PCS's arrangement with Richard Branson's Virgin Group, LLC
("Virgin") is one example of this. In October 2001, Sprint PCS and
Virgin announced the formation of a joint venture, Virgin Mobile USA
("Virgin Mobile").[^273] The venture plans to offer a new prepaid
service to be marketed under the Virgin Mobile brand name using Sprint
PCS's network.[^274] To fund the venture, Sprint PCS will contribute up
to \$150 million, the majority of which will be in the form of services
and the remainder in cash, while Virgin will contribute up to \$150
million in cash.[^275] Virgin Mobile plans to target the 15 to 30
year-old market in the United States.[^276]

#### Satellite Operators

As of year-end 2001, two carriers[^277] were providing mobile satellite
services ("MSS") in the United States, Globalstar Telecommunications
LTD. ("Globalstar") and Iridium Satellite LLC. ("Iridium Satellite").
Another company, New ICO Global Communications Limited ("New ICO"), has
announced plans to initiate service in 2003.

The following is a brief description of how satellite telephony works.
An "outbound" communication from a 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.

The following is a description of the products and services offered by
Globalstar and Iridium Satellite as of year-end 2001.

*[Globalstar.]{.underline}* In February 2000, Globalstar initiated
commercial mobile voice service via satellite. As of year-end 2001, the
company had about 66,000 subscribers and \$6.4 million in revenue over
the course of the year.[^278] Globalstar offers global voice and data
services, including SMS.[^279] The company's mobile satellite phone,
GSP-1600, is manufactured by QUALCOMM, Inc. and retails for
approximately \$1000.[^280] Prices per month for service plans range
from \$24.95 for five minutes to \$399.95 for 500 minutes. Additional
minutes cost between \$0.89 and \$1.49, depending on the service plan
chosen.[^281] Globalstar has 15 distributors of its products and
services in the United States.[^282]

As reported in the *Sixth Report*, Globalstar was experiencing financial
difficulties in 2000, and these difficulties continued in 2002.[^283] In
the company's third quarter 2001 report filed with the SEC, Globalstar
notified investors that it planned to seek voluntary Chapter 11
bankruptcy protection in order to restructure financial commitments to
its creditors.[^284] On February 15, 2002, Globalstar sought Chapter 11
bankruptcy protection, despite cutting costs and doubling its subscriber
base during 2001.[^285] In its bankruptcy filing, the company claims
assets of \$570 million and \$46 million in cash reserves.[^286]
However, Globalstar has liabilities of more than \$3.3 billion, and
observers believe that the company will need additional cash to emerge
from Chapter 11 bankruptcy protection.[^287]

*[Iridium Satellite.]{.underline}* Iridium Satellite, the company that
emerged from bankruptcy in December 2000,[^288] initiated commercial
service at the end of March 2001. The original Iridium LLC company began
commercial service on November 1, 1998.[^289] Iridium Satellite has a
network of 66 low-earth orbit satellites operating in the Ka-band, and
seven in-orbit backup satellites. In addition to satellites, the company
uses terrestrial gateways to connect users to terrestrial wireless and
wireline networks. In December 2000, Iridium Satellite signed a two-year
contract with the Department of Defense for at least 20,000 users at a
cost of \$3 million per month.[^290]

Iridium Satellite offers voice and data services throughout the world,
and, in the United States, voice service costs \$1.00 to \$1.50 per
minute for airtime.[^291] There are two types of handsets available from
Motorola that work on Iridium Satellite's network. The Satellite Series
9500 phone sells for \$950 and is capable of transmitting data at 2.4
kbps.[^292] The Satellite Series 9505 phone is a similar, yet smaller
phone, and sells for \$1,495.[^293] In addition, the company offers two
data services: Dial-Up Data and Direct Internet Data. Dial-Up Data
offers customers speeds up to 2.4 kbps, while Direct Internet Data is
slightly faster at 10 kbps.[^294] Iridium Satellite also offers SMS,
allowing customers to send and receive messages up to 120 characters
long.[^295]

### International Developments

#### International Investments

*[Foreign Investment in U.S. Mobile Operators]{.underline}*. Strategic
foreign investment in U.S. mobile telecommunications companies remained
relatively stable during 2001. As noted in the *Sixth Report*, the
merger of VoiceStream and Powertel with Germany's Deutsche Telekom
closed in May 2001, and Japan's NTT DoCoMo, Inc. ("NTT DoCoMo") acquired
an approximate 16 percent stake in AT&T Wireless in November 2000.[^296]
In connection with AT&T Wireless's acquisition of former network
affiliate TeleCorp, NTT DoCoMo exercised its preemptive rights by
purchasing additional shares of AT&T Wireless to maintain its
approximate 16 percent equity interest in the company after the
acquisition was completed.[^297]

*[U.S. Investment in Foreign Mobile Operators]{.underline}*. Beginning
in 2000, U.S. mobile telephone operators have been seeking to reduce
their accumulated portfolio of investments in foreign mobile telephone
companies, particularly in Europe. As noted in the *Sixth Report*, SBC
sold off its ownership stakes in two European mobile operators in
2000.[^298] This divestiture trend continued into 2001 and 2002.

In the third quarter of 2001, BellSouth closed on the sale of its 24.5
percent interest in SkyCell, a mobile operator in India.[^299] New
Delhi-based Bharti Enterprises bought out BellSouth's stake in SkyCell
for a reported \$21.5 million.[^300]

In August 2001, BellSouth announced its intention to dispose of its
mobile phone investments in Europe and Israel in order to focus
primarily on its holdings in Latin America along with its domestic
business.[^301] To this end, BellSouth announced on January 30, 2002
that it was exercising its option to exchange its entire 22.51 percent
stake in German mobile operator E-Plus for a 9.42 percent stake in Dutch
operator Royal KPN N.V. ("KPN"), which acquired the remaining 77.49
percent stake in E-Plus in December 1999.[^302] BellSouth and KPN closed
on their agreement to swap BellSouth's E-Plus shares for a stake in KPN
on March 13, 2002.[^303] BellSouth then disposed of its 9.42 percent
stake in KPN by selling its shares in the Dutch company on March 19,
2002, the first day BellSouth was free to sell the shares.[^304]
BellSouth is reported to have raised 1.23 billion euros (\$1.1 billion)
from the sale of its shares in KPN, and announced it will record an
after-tax gain of approximately \$850 million as a result of the share
swap and subsequent disposal.[^305]

BellSouth has also signaled its desire to sell its stake in Danish
mobile operator Sonafon, which is majority owned by Norwegian carrier
Telenor with BellSouth as its partner.[^306] While BellSouth has yet to
find a buyer for Sonafon, its decision to dispose of its European
wireless assets did affect bidder participation in Denmark's auction of
3G licenses in September 2001. In particular, Sonafon did not bid in the
sealed-bid auction because Telenor and BellSouth were unable to reach an
agreement to let their jointly owned subsidiary submit a bid.[^307]
Telenor submitted a bid on its own, but as the lowest of five bids for
four licenses the bid was unsuccessful.[^308]

In July 2001 the Atlantic West consortium of Verizon Communications and
AT&T Wireless reached an agreement to sell the U.S. operators' combined
49 percent stake in Czech mobile operator EuroTel for nearly \$1.5
billion to Czech operator Cesky Telecom, which owns the remaining 51
percent stake in EuroTel.[^309] However, Cesky Telecom later reopened
the negotiations, arguing that market conditions had deteriorated and
cutting the offered price to \$1.1 billion.[^310] The negotiations were
abandoned in November 2001 after the parties failed to reach an
agreement on the purchase price and Atlantic West rejected Cesky
Telecom's latest offer.[^311]

In March 2002, SBC was reported to be seeking an exit from its
investment in Belgian operator Belgacom, through which SBC has an
interest in Belgian mobile operator Proximus.[^312] To this end, the
report indicated, SBC had pressed for an IPO of the Belgian operator, a
majority of whose shares are owned by the Belgian government. An IPO
would enable SBC to cash in its stake in Belgacom by selling shares on
the stock market. Moreover, because Belgacom is one of the few incumbent
European operators with practically no debt, SBC reportedly believes
that Belgacom could be valued attractively through an IPO.

Like BellSouth, SBC has regarded its European holdings as non-core for
more than a year.[^313] In addition to its stake in Belgacom, SBC also
has investments in Denmark's TDC (formerly Teledanmark) and France's
Segetel, both of which own mobile operators in their respective home
countries. SBC is reportedly willing to sell its stakes in both
companies if it can obtain what it views as a reasonable price.[^314]

While BellSouth has expressed its intention to maintain a strong
presence in Latin America, other U.S. companies have taken steps to
reduce their Latin American holdings. For example, Sprint and Leap
Wireless have agreed to exit their investment in Mexican mobile operator
Pegaso PCS ("Pegaso"). In March 2002, Spanish mobile operator Telefonica
Moviles announced that it had signed a letter of intent to acquire 65
percent of Pegaso and had agreed to buy out the interests of U.S.
investors Sprint and Leap Wireless for \$70.5 million in cash.[^315]
Pegaso is the only foreign mobile operator in which Sprint and Leap
Wireless had held an ownership interest.

SBC has reorganized its Latin American interests. SBC entered 2002 with
an 8 percent interest in America Movil, a wireless provider in Mexico
and Latin America that was spun off from Mexican operator Telmex in
2001, and a 12.8 percent interest in Telecom Americas, a joint venture
among America Movil, SBC, and Bell Canada with investments in several
wireless operators in Brazil.[^316] In January 2002, as part of a deal
in which SBC purchased America Movil's 50 percent interest in Cellular
Communications of Puerto Rico, America Movil acquired an option to
purchase SBC's stake in Telecom Americas within three years.[^317]
According to SBC, this represents a forward sale of its interest in
Telecom Americas.[^318]

Furthermore, Verizon announced on March 28, 2002 that it had cut its
ownership stake in Argentine wireless communications company CTI
Holdings S.A. ("CTI") in order reduce its financial exposure to
Argentina's economy.[^319] In particular, Verizon reduced its ownership
stake in CTI from 65 percent to 48 percent by transferring 5.5 million
shares in CTI to a newly created trust for CTI employees. The trust will
distribute the shares to a program to be developed by CTI to give
employees an equity-based stake in the company. In addition to reducing
its ownership stake, Verizon said it is reducing its representation on
the CTI Board of Directors from a maximum of five directors on the
nine-member body to a maximum of four. According to Verizon, CTI has
been under significant financial pressure as the value of the Argentine
peso has continued to drop and Argentina's economy has deteriorated. CTI
recently announced its decision to suspend principal and interest
payments on its debt, and retained a financial adviser to assist in
restructuring its approximately \$1 billion of U.S.-dollar denominated
debt, about 90 percent of which is non-recourse to Verizon. As a result
of Verizon's actions, CTI will no longer be consolidated into Verizon's
financial statements.

In an exception to the foregoing divestiture trend, Western Wireless
International Corporation ("WWI"), a subsidiary of Western Wireless
Corporation, announced in July 2001 that it had completed the
acquisition from Vodafone of tele.ring Telekom Service GmbH
("tele.ring"), a mobile and fixed-line operator in Austria.[^320] Under
the terms of the transaction, a new subsidiary of WWI purchased all of
the outstanding shares of tele.ring for a nominal consideration, and an
affiliate of Vodafone Group Plc agreed to provide tele.ring with a 250
million euro term loan for operating capital.

WWI also has the option to acquire, also for a nominal consideration,
the Vodafone entity that acquired one of the six Austrian 3G licenses
awarded through an auction in November 2000.[^321] However, WWI decided
not to submit a bid for one of Ireland's four 3G licenses through
Meteor, the Irish mobile operator that is majority owned by WWI.[^322]
Just three operators applied for the four Irish 3G licenses, which are
to be awarded through comparative selection ("beauty contest") with a
nominal license fee. In announcing the decision not to bid, WWI cited
the investment requirements for license fees and rapid infrastructure
rollout, and indicated Meteor would better serve its customers by
continuing its focus and investment on the delivery of its GSM and 2.5G
voice and data services.[^323]

In July 2001 AT&T Wireless agreed to buy out British Telecommunications
Plc's entire interest in a partnership between the two companies that
held a stake in Canadian mobile operator Rogers Wireless for \$379
million.[^324] The all-cash transaction increased AT&T Wireless's stake
in the Canadian operator to 33.3 percent from 19 percent.

#### International Comparisons

*[Mobile Growth and Penetration]{.underline}*. As anticipated in the
*Sixth Report*, a significant trend in the mobile telephone markets of
Western European countries in 2001 was the sharp slowdown in the growth
of mobile subscribership.[^325] Mobile subscribers in Western Europe
totaled 288.8 million on January 1, 2002, up 45.3 million, or
approximately 15.5 percent, from the beginning of 2001. This rate of
increase in subscribership, while healthy by the standards of most
industry sectors, is significantly below the record annual growth of
nearly 90 million new subscribers, or roughly 58 percent, set in 2000.
[^326] Mobile penetration in Western Europe averaged 74.3 percent at the
end of 2001, up from 62.5 percent at the end of 2000.[^327]

There remain significant differences in the penetration rates of
individual Western European countries, but the range of penetration
rates narrowed slightly as compared with the situation at the end of
2000. In addition, the rankings of certain countries shifted
significantly in the course of 2001. Luxembourg finished 2001 with the
highest penetration rate in Western Europe at more than 90 percent,
moving up from the sixth highest penetration rate at the end of 2000.
Italy and Portugal followed closely behind with penetration rates of 88
percent and 86 percent, respectively.[^328] Norway and Sweden, which
had, respectively, the first and second highest penetration rates at the
end of 2000, found themselves in the middle tier of Western European
countries at the end of 2001. For the second year in a row, France had
Western Europe's lowest penetration rate with 62 percent of the
population using a mobile phone at the end of 2001, up from 50 percent
at the end of 2000.[^329]

Despite the sharp slowdown in Western Europe's mobile subscriber growth,
mobile subscribership grew at a roughly comparable pace in Western
Europe and the United States in 2001. As a result, while Western
Europe's mobile markets continued to achieve higher penetration levels
than the U.S. mobile market in 2001, the margin of difference between
the U.S. penetration level and the West European average remained
roughly the same as it was at the end of 2000. As noted previously, the
U.S. mobile penetration rate was approximately 45 percent at the end of
2001, as compared with the West European average of 74.3 percent. The
ratio of Western Europe's average mobile penetration rate to the U.S.
penetration rate was therefore 1.7 at the end of 2001, as compared with
1.6 at the end of 2000.

In common with Western Europe, the Asian-Pacific countries of Japan,
Australia, and New Zealand also experienced a slowdown in mobile
subscriber growth in 2001.[^330] As was the case at the end of
2000,[^331] these three countries are continuing to achieve mobile
penetration levels that are higher than the U.S. penetration level, but
lower than the Western European average. At the end of 2001, mobile
penetration rates were 54 percent in Japan, 61.6 percent in Australia
and 63.5 percent in New Zealand.[^332] In contrast, mobile penetration
levels in several smaller Asian-Pacific countries, including Taiwan and
Hong Kong, have exceeded the Western European average in the past two
years. Taiwan claimed a mobile penetration rate of 96 percent at the end
of 2001, followed by Hong Kong at 81 percent.[^333]

A word of caution is in order, however, in comparing mobile penetration
levels in different countries. As explained in the *Sixth Report*,
mobile penetration rates tend to become inflated in countries with a
high share of prepaid service users in their mobile subscriber
base.[^334] Prepaid users can easily switch service providers, and those
who do switch are likely to be "double counted" for a period of time if
the country's wireless operators are not diligent about removing
inactive prepaid users from their subscriber base. The *Sixth Report*
discussed the impact of this problem in the context of assessing
European mobile subscriber figures,[^335] but subsequent reports suggest
that the problem may be even more severe in certain Asian countries such
as Taiwan, Hong Kong, and Singapore.[^336]

According to the Wall Street Journal, many Taiwanese, especially the
young, own several prepaid phones, and carriers count each phone sold as
a subscriber.[^337] As a result, while Taiwan government figures put its
country's mobile penetration rate at more than 90 percent, analysts'
estimates range anywhere from 70 to 85 percent.[^338] In Singapore, the
mobile penetration rate dropped from nearly 80 percent to just under 70
percent in the last quarter of 2001 after wireless operators made
downward adjustments in their prepaid subscriber numbers in an
aggressive effort to weed out inactive customers from their customer
base.[^339]

As first noted in the *Sixth Report*,[^340] analysts believe that
prepaid was the primary driver of the rapid penetration gains in Western
Europe over the past couple of years.[^341] Although some European
mobile operators such as Vodafone have revised their subscriber counts
downward to adjust for inactive prepaid subscribers,[^342] some analysts
believe that subscriber figures reported by European mobile operators
continue to overstate the actual number of mobile subscribers and,
accordingly, mobile penetration levels. For example, after adjusting the
UK's and Germany's reported mobile penetration levels for estimates of
inactivity levels in each of these countries, Merrill Lynch analysts
found that mobile penetration in 2001 dropped from 79 percent to 72
percent in the UK and from 68 percent to 62 percent in Germany.[^343]
Even with this adjustment, Merrill Lynch analysts believe that the
remaining disparity between penetration in Western Europe and the United
States may still be somewhat overstated because U.S. accounting
practices may in some instances be more conservative than some of the
methodologies used to calculate inactivity levels at some of the Western
European carriers.[^344]

*[Mobile Usage]{.underline}*. As in previous years, U.S. subscribers
continued to use their mobile phones more intensively than European
subscribers in 2001, with the difference between average monthly usage
per subscriber in the United States and Western Europe widening still
further. According to one estimate, MOUs in Western Europe averaged 130
minutes per subscriber per month in 2001, while in the U.S. per
subscriber MOUs averaged 338.[^345] By comparison, the same source
estimates that in 2000 MOUs in the U.S. were, at 248, only slightly more
than double the West European average that year of 119.[^346] Average
U.S. mobile usage is also higher than usage levels in the Asia
Pacific.[^347] Hong Kong comes the closest to the U.S. level with
estimated average MOUs of 300 minutes.[^348] At 177 minutes, Japan's
estimated average MOUs are lower than the U.S. level but higher than the
Western European average.[^349]

*[Mobile Pricing and Competition]{.underline}*. The *Sixth Report*
observed that, while a higher percentage of the population in Western
Europe currently subscribes to mobile telephone service, certain
categories of users may be paying less for mobile telephone service in
the United States.[^350] This conclusion continues to be supported by
two different measures of the cost of mobile service. The first measure
involves estimating the cost of a defined "basket" of mobile services,
and the second measure focuses on the average revenue per minute of
mobile voice service.

The *Sixth Report* cited international comparisons of the cost of a
basket of mobile services based on a pair of basket definitions
developed by Teligen in cooperation with the Organization for Economic
Cooperation and Development ("OECD").[^351] The Teligen/OECD basket
definitions represent two usage profiles, one for high-volume users,
which are designated "business" users, and the other for lower volume
users, which are designated "residential" or "personal" users. In either
case, only outgoing mobile calls are included in the basket. The prices
of the services included in each basket are taken from a selected
calling plan of a single operator, and the two baskets are updated on a
quarterly basis with the latest available prices for the calling
plan.[^352]

As related in the *Sixth Report*, the Teligen/OECD basket estimates for
the quarter ending February 1, 2001 suggested that the cost of the
"business" basket in the United States was well below the Western
European average, whereas the cost of the "personal" basket was above
the Western European average.[^353] Updated Teligen/OECD mobile basket
estimates for February 2002 continue to tell the same story.[^354] In
addition, a comparison of the Teligen/OECD mobile basket estimates for
the United States with the average for selected Asian-Pacific countries
-- specifically, Japan, South Korea, Australia, and New Zealand --
reveals the same pattern as the U.S.-Western Europe comparison. In
particular, U.S. mobile subscribers appear to pay less for the business
basket, but more for the residential basket, than their Asian-Pacific
counterparts.

There are a number of drawbacks to the mobile basket approach to
international mobile pricing comparisons in the Teligen/OECD study. We
mention two here. First, the mobile baskets in the study include only
outgoing mobile calls. The exclusion of incoming calls reflects the
predominance of the calling party pays (CPP) principle in OECD member
countries. Whereas mobile subscribers in the United States and Canada
typically pay both to make and receive calls, in Western Europe and
parts of the Asia Pacific the party who initiates the call to a mobile
phone pays for it. Accordingly, the cost of calls made from fixed
wireline networks to mobile subscribers is reflected in the Teligen/OECD
PSTN baskets for wireline telephone service rather than the mobile
baskets. As a consequence, however, the mobile baskets for the United
States and Canada are not fully comparable with those for other OECD
member countries. Second, average monthly usage per subscriber in the
U.S. (385 minutes) is higher than the usage in the Teligen/OECD
high-volume business basket, which is defined to include 315 minutes per
month. Indeed, bucket plans with 250-400 peak minutes and very large
quantities of night and weekend minutes appear to be increasingly
popular with "residential" subscribers and are targeted in carrier
promotions and advertising to that group.

As an alternative to the Teligen/OECD mobile baskets, in this report we
also consider Merrill Lynch's estimates of revenue per minute ("RPM")
for selected mobile markets in Western Europe, the Asia Pacific, and the
United States and Canada (see Appendix C, Table 10). Merrill Lynch
calculates RPM by dividing ARPU by MOUs. Unlike the Teligen/OECD mobile
baskets, RPM reflects the pricing and volume of calls both to and from
mobile phones. More specifically, in the United States and Canada mobile
service revenue includes the monthly service charges and other usage
fees paid by mobile subscribers for incoming and outgoing calls. In the
countries of Western Europe and the Asia Pacific, service revenue
includes the service charges and fees paid by mobile subscribers for
outgoing calls, while for incoming calls the principal revenue component
of RPM is the wholesale interconnection rate the mobile operator charges
the originating operator to terminate traffic on the mobile operator's
network. Merrill Lynch analysts believe RPM is a good proxy for mobile
pricing.[^355]

At \$0.16, the United States' RPM is lower than the RPM of all other
countries in the group except Canada (\$0.13) and New Zealand (\$0.15).
The U.S. level compares with an average of \$0.22 for the Western
European countries and \$0.21 for the Asian-Pacific countries. Japan's
RPM, at \$0.31, is nearly double the U.S. level and the highest in the
group.

The relatively low level of RPM in the U.S. mobile market may in part
reflect differences in the competitive environment for outgoing mobile
calls. In CPP and non-CPP countries alike, mobile competition exerts
pressure on mobile operators to keep the price of outgoing calls paid
for by the mobile subscriber at levels sufficiently low to attract and
retain customers. Most Western European governments have licensed three
to four GSM operators in an effort to stimulate competition in mobile
service markets.[^356] Nevertheless, comments by some analysts suggest
that competition in Western European mobile markets has tended to be
less than robust. For example, one group of analysts asserts that
"outgoing tariffs remain high in Europe," and characterizes the
competitive environment there as being "more benign than anticipated."
[^357]

Analysts also point to differences in the competitive environment of
individual European mobile markets. For example, equity analysts
typically describe pricing competition in the UK's mobile market as
being relatively intense and aggressive compared to other Western
European markets.[^358] However, in a September 2001 review of mobile
competition in the United Kingdom, British telecommunications regulator
Oftel concluded that the market for services purchased by mobile
subscribers is "prospectively competitive" but "not yet effectively
competitive."[^359]

Some analysts have also explicitly compared the United States and
Western Europe with regard to mobile competition. These analysts agree
that the U.S. mobile market is more competitive than most mobile markets
in Europe, and that this is one of the primary reasons for lower RPM in
the United States.[^360]

Apart from a less intense competitive environment for outgoing calls,
analysts explain that the higher levels of RPM observed in Western
Europe reflect the CPP environment in which European wireless carriers
operate and the impact of CPP in raising the cost of calls to mobile
phones.[^361] In this regard, given that neither Canada nor the United
States has made it mandatory for mobile operators to implement CPP, it
may be significant that RPM is lower in both the United States and
Canada than in all the countries in which CPP is mandatory except New
Zealand.

For fixed-to-mobile calls in Western Europe, the originating wireline
carrier pays an interconnection charge to terminate traffic on the
mobile operator's network, and separately bills the charges incurred by
its own customers based on published per-minute rates for
fixed-to-mobile calls. British telecommunications regulator Oftel argues
in a September 2001 report that there is little incentive for mobile
operators in a CPP environment to reduce the interconnection rates they
charge for terminating calls to their networks. [^362] Oftel stresses
that callers have no choice but to terminate their calls on the mobile
network chosen by the mobile subscriber, while mobile subscribers
generally choose their network operator based primarily on the cost of
making calls, not on what it costs others to call them. Oftel concludes
that "competitive pressures do not currently exert sufficient
constraints on termination charges nor are they likely to do so in the
near future."[^363] Other foreign regulators in CPP jurisdictions share
Oftel's view that CPP may confer a form of market power on mobile
carriers with regard to the setting of mobile termination charges,
including the European Commission and the Australian Competition and
Consumer Commission.[^364] In contrast, because U.S. and Canadian mobile
subscribers pay both to make and receive calls, mobile competition in
these two countries is equally effective in constraining the price of
incoming and outgoing mobile services.

While the foregoing discussion has been limited to an explanation of
pricing differences in the West European and North American mobile
markets, a group of Merrill Lynch analysts argue that the same
considerations may explain why Japan's RPM is nearly double the U.S.
level. In particular, Merrill Lynch's analysts state their belief that
"pricing differences with the U.S. largely stem from a relatively less
intensive competitive environment" for outgoing calls in Japan.[^365]
They further argue that "two additional differentiating factors may be
that Japan has implemented calling party pays and that its
fixed-to-mobile interconnection rates are the highest in the world at
\$0.27 per minute."[^366]

## Mobile Data

### Introduction 

#### Domestic Developments 

For purposes of this report, the Commission considers mobile data
service to be the delivery of non-voice information to a mobile device.
Two-way mobile data services include the ability not only to receive
non-voice information on an end-user device but to send it from an
end-user device to the PSTN as well using wireless technology. During
the past year, the mobile data industry continued to grow and to evolve.
Estimates of the number of mobile Internet users at the end of 2001
range from approximately 8 to 10 million, up from 2 to 2.5 million at
the end of 2000.[^367] Since the publication of the *Sixth Report*,
several mobile data operators have begun upgrading their networks with
advanced wireless service technologies,[^368] cdma2000 1xRTT and GPRS,
to allow for faster data access speeds and more advanced services.[^369]
As of March 2002, four nationwide mobile telephone operators were
offering mobile Internet access service for mobile telephone handsets,
PDAs, and/or laptops at speeds generally ranging from 25-60 kbps,[^370]
with maximum bursting rates of 144 kbps for at least one carrier, in at
least some portion of U.S. counties covering approximately 181 million
people.[^371] Hence, nearly 63 percent of the U.S. population could have
access to the Internet while mobile at speeds close or comparable to
those on a 56 kbps wireline dial-up modem. Most of the nationwide U.S.
carriers have plans to make advanced wireless services available in some
form throughout most of their networks by the end of this year.[^372]
Furthermore, competition within the mobile data sector is developing
successfully, as evidenced by the multitude of dynamic services, service
packages, and pricing plans available to consumers from a variety of
providers.

The three general categories of mobile data providers and their
corresponding devices discussed in this report are: (1) mobile telephone
operators offering services primarily on mobile telephone handsets, (2)
providers of mobile data access to handheld PDA devices and laptop
computers, and (3) paging carriers offering services on pagers and
two-way messaging devices. The first mobile data section, "Industry
Structure and Performance," discusses the key developments and events
related to these three categories of carriers and devices that occurred
during 2001 and early 2002. During the past year, the types of mobile
data services available on mobile data devices have become increasingly
similar. With the exception of traditional one-way pagers, most mobile
data devices offer some form of text messaging, web browsing, and e-mail
access.[^373] Therefore, this year's report provides details on the
major mobile data services available to consumers in a separate section
following the discussion of the three categories of mobile data
providers and devices.[^374]

Not only has the mobile data industry witnessed a further convergence of
data services across devices during the past year, but a convergence of
voice and data services as well. The defining feature that, in the past,
divided mobile telephones from PDAs was whether the devices offered
voice capabilities; mobile telephones did, while PDAs did not.
Furthermore, mobile telephones offered voice capabilities as their
primary feature and had limited data capabilities, while handheld
devices offered more advanced mobile data features but little or no
voice ability.[^375] During the past year, the distinction between
mobile telephones and PDAs began to blur with the emergence of
smartphones. As discussed below, several of the major mobile data
providers have released smartphone devices that combine the
organizational and data-centric features of PDAs with the voice
capabilities of mobile telephones.[^376] One catalyst for the
convergence of mobile voice and mobile data during the past year has
been the deployment of GPRS and 1xRTT, which, by increasing data
transfer speeds, allow and increase the demand for advanced mobile data
services.

While U.S. mobile carriers have the flexibility to deploy advanced
wireless, including 3G, technologies using their existing CMRS spectrum,
the Commission has continued its efforts during the past year to
allocate additional spectrum suitable for offering advanced wireless,
including 3G, services. As part of these efforts, the Commission
released in August 2001 a Further Notice of Proposed Rulemaking,[^377]
which explores the possible use of additional spectrum bands for 3G
services beyond the initial bands proposed in the Notice of Proposed
Rulemaking released in January 2001 and discussed in the *Sixth
Report*.[^378] Specifically, the *3G FNPRM* proposed the use and
reallocation of the following bands for advanced wireless services:
1910-1930 MHz, 1990-2025 MHz, 2150-2160 MHz, 2165-2200 MHz, and
2390-2400 MHz.[^379] These bands are currently used for the following
services: Mobile Satellite Service, Unlicensed PCS, Amateur Radio
Service, and Multipoint Distribution Service ("MDS").[^380]

#### International Developments 

Mobile telephone carriers in other countries have continued to deploy
next generation mobile data services since the writing of the *Sixth
Report*. One of the most notable international developments was the
launch of 3G service using WCDMA technology by NTT DoCoMo in Japan in
October 2001. As mentioned in the *Sixth Report*, NTT DoCoMo had once
planned to offer 3G service by May 2001, but in April 2001, delayed the
launch until October. NTT DoCoMo's 3G service, which the company calls
FOMA (Freedom of Multimedia Access), allows users to access the Internet
at speeds of up to 384 kbps, transmit and download video clips, and send
large data files quickly.[^381] However, FOMA's adoption rate has been
lower than expected due to problems such as limited coverage, low
battery life, and the high cost of handsets.[^382] As of the end of
April 2002, NTT DoCoMo had approximately 105,000 FOMA customers,
compared to 32.6 million subscribers to its popular 2G mobile data
service, i-mode, which is used by nearly 80 percent of DoCoMo's voice
subscribers.[^383]

While other countries around the world have delayed their WCDMA launches
until at least 2003,[^384] carriers in many countries are currently
offering service using advanced wireless technologies such as GPRS and
cdma2000 1X. GPRS service is available in most western European
countries,[^385] while cdma2000 1X has been launched by SK Telecom
Company ("SK Telecom") in South Korea. In South Korea, cdma 1X services
have proven to be fairly popular thus far. As of March 2002, SK Telecom
had over 5 million 1xRTT subscribers, up from approximately 2 million in
October 2001.[^386] Furthermore, SK Telecom's wireless Internet revenue
rose 55 percent during the first quarter of 2002 and represented 6.6
percent of the company's total revenue, up from 4.1 percent during the
previous quarter.[^387] On the other hand, the adoption rate of GPRS
service has been lower than expected in many countries, and the
popularity of GPRS service does not match the level of popularity that
SMS has achieved around the world. One analyst estimates there were only
one million GPRS customers in all of Europe at the end of 2001, due to
problems with handset availability as well as relatively low speeds and
limited content offered by carriers.[^388] SMS, on the other hand,
continues to be a widely-used mobile data application abroad.
Approximately 30 billion SMS messages were sent worldwide during
December 2001, more than double the 14 billion sent during December
2000.[^389]

### Industry Structure and Performance

#### Mobile Telephone Sector 

The *Fifth and Sixth Reports* discussed in depth the various
next-generation technology standards in development and which of these
technologies mobile telephone carriers were planning to use to migrate
from their existing 2G technologies in order to offer mobile data
services at higher speeds.[^390]

Since the writing of the *Sixth Report*, several developments have
occurred on the road to 3G. During 2001, five of the nationwide
telephone operators in the United States initiated service on newly
deployed advanced wireless networks.[^391] The two largest mobile
telephone carriers that currently use CDMA as their 2G technology,
Verizon Wireless and Sprint PCS, announced at the end of 2001 the
availability of cdma2000 1X as the first phase of their 3G technology
rollout.[^392] In January 2002, Verizon Wireless initiated service on
its high-speed data network, and the service, called Express Network,
was available in approximately 20 percent of Verizon Wireless's network
footprint in the Northeast, San Francisco Bay Area, and Salt Lake City
as of March 2002.[^393] Verizon Wireless's cdma2000 1XRTT network
transmits data at speeds up to 144 kbps; however, the company states
that the average customer download speed is 40-60 kbps.[^394] Sprint PCS
is upgrading its network and expects to rollout cdma2000 1X wireless
data services, which it expects will be capable of speeds up to 144
kbps, nationwide in mid-year 2002.[^395] Both carriers plan to deploy
cdma2000 1xEV, Verizon Wireless in 2002 for data only and Sprint PCS in
2004 for data and voice.[^396] Cdma2000 1xEV is expected to boost
network data speeds to at least 2.4 Mbps. In addition, Nextel's iDEN
network transmits data at speeds of 15 to 20 kbps for mobile handsets
and 30 kbps for laptops and PDAs.[^397] Nextel has not yet made a
commitment to a 3G technology.[^398]

The major TDMA/GSM carriers in the United States, AT&T Wireless,
VoiceStream, and Cingular Wireless, are taking a different migration
path to 3G technology. All three carriers began deploying GPRS[^399]
technology during 2001 on their nationwide networks.[^400] Data speeds
on the carriers' GPRS networks range from 25 to 56 kbps.[^401] AT&T
Wireless, which currently uses TDMA as its 2G technology, plans to
deploy GPRS to all of its markets by the end of 2002.[^402] After
rolling out GPRS, these three carriers have announced that they will
migrate to and deploy EDGE as an intermediate technology between GPRS
and WCDMA.[^403] EDGE and WCDMA are expected to raise network speeds to
384 kbps and 2 Mbps, respectively.[^404] Cingular Wireless is reportedly
planning to build out EDGE to all of its markets during 2003 and
2004.[^405] AT&T Wireless has announced that it expects to migrate to
EDGE during 2002 and to WCDMA beginning in 2003.[^406]

#### Handheld Devices 

PDAs or handheld devices began as electronic organizers containing
personal information management ("PIM") functions, such as an address
book, calendar, and to-do list, that could be "synched" with PIM
software on a user's desktop computer. Most handheld devices also
include the ability to download additional software programs that do not
come pre-loaded on the device.[^407] While PDAs still contain these core
PIM and software features, handhelds are being repositioned as wireless
communication devices instead of simple organizers.[^408] All of the PDA
models introduced by the major manufacturers during 2001 and early 2002
-- including Palm, Inc. ("Palm"), Handspring, Inc. ("Handspring"), Sony,
Compaq Computer Corporation ("Compaq"), Casio, Inc. ("Casio"),
Hewlett-Packard ("HP"), and Research in Motion, Inc. ("RIM") -- allowed
users some method of connecting to the Internet wirelessly.

According to one analyst, 6.6 million PDAs were sold in the United
States during 2001, a 20 percent increase from the 5.5 million sold
during 2000.[^409] According to another analyst, U.S. sales of handheld
devices totaled 2.5 million during the second and third quarters of
2001.[^410] Palm devices accounted for 39.1 percent of that total,[^411]
Handspring PDAs accounted for 19.6 percent, while RIM devices accounted
for 7.5 percent, and the three major Pocket PC manufacturers (Compaq,
Casio, and HP)[^412] accounted for a combined 23.6 percent.[^413]

There are four different methods by which PDAs can connect to the
Internet while mobile. First, some PDAs, including RIM devices and the
Palm VII and i705,[^414] have built-in, or embedded, wireless modems.
These devices therefore do not require an additional attachment in order
to connect to the Internet wirelessly. The Palm VII and i705 connect to
Cingular Wireless's Mobitex dedicated data network,[^415] while some of
RIM's devices use Cingular Wireless's network and others use Motient
Corporation's ("Motient") dedicated data network.[^416] These devices
can access the Internet at speeds of between 8.6 and 14.4 kbps,[^417]
which are comparable to the speeds offered by mobile telephone carriers
for their 2G mobile data services, but lower than the speeds offered on
these carriers' GPRS and 1xRTT networks, which range from 25-60
kbps.[^418]

A second method by which many PDAs connect to the Internet while mobile
is with the attachment of a wireless modem card. The major manufacturers
of wireless modem cards include Novatel Wireless, Sierra Wireless, and
Enfora, and each modem card is usually made to work with a specific PDA
model.[^419] Most wireless modem cards connect to Cellular Digital
Packet Data ("CDPD") networks operated by mobile telephone carriers such
as AT&T Wireless and Verizon Wireless and give users Internet access
speeds of around 19.2 kbps. However, modem cards that connect to GPRS
and 1xRTT networks and can provide users with higher mobile Internet
access speeds started to become available in early 2002. In January
2002, Verizon Wireless and Sierra Wireless announced the commercial
availability of the AirCard 555 wireless modem card, which connects
laptops and PDAs to Verizon Wireless's cdma2000 1xRTT network and gives
users Internet access speeds of 40-60 kbps.[^420] VoiceStream sells a
wireless modem card for laptops and PocketPC PDAs that connects to
GSM/GPRS networks and allows users to receive Internet access speeds of
up to 56 kbps in areas where GPRS service is available.[^421]

A third way in which PDAs can connect to the Internet is with the
attachment of an Internet-enabled mobile phone. With this "piggybacking"
method, many of the factors associated with the Internet connection,
including speed, reliability, and service pricing, are dependent upon
the mobile telephone carrier providing the Internet access.[^422]
Handspring offers a modified version of piggybacking method of mobile
Internet access. All of its Visor PDA models include a Springboard where
users can attach various modules, including two devices, called the
VisorPhone and Sprint PCS DigitalLink, that allow a Visor to function as
an Internet-ready mobile telephone, giving users both a mobile voice and
data connection.[^423]

##### Smartphones

During the past year, the wireless industry witnessed the further
convergence of the mobile telephone and PDA sectors, marked by the
emergence of smartphones, which provide a fourth method of PDA mobile
Internet access. Smartphones combine the voice and data capabilities of
mobile telephones with the PIM functions of PDAs. While smartphones
constituted less than one percent of all mobile phone sales during
2001,[^424] one analyst has stated that "the line between PDAs and
cellphones ha\[s\] blurred."[^425] Compared to traditional mobile
handsets, smartphones generally have larger screens, more advanced
graphics and processing capabilities, more memory, a more user-friendly
operating system, some form of keypad, and the ability to synch data
with and download software from a desktop computer. Smartphones also
integrate traditional mobile telephone phone number storage and access
with a PDA's address book so users are not required to store numbers in
two different places.

In the fall of 2001, Kyocera and Samsung released PalmOS-based
smartphones[^426] that operate on the CDMA networks of Sprint PCS and
Verizon Wireless. And in February 2002, Handspring released its
smartphone model, the Treo, which operates on GSM networks.[^427] In
mid-2002 Handspring is scheduled to release a software upgrade that will
allow the Treo to work on GPRS networks, giving users faster Internet
access speeds of up to 56 kbps.[^428] Handspring also announced in March
2002 that it is developing with Sprint PCS another version of the Treo
that will work on Sprint PCS's CDMA network, including its 1xRTT
network, expected to launch in mid-2002.[^429] RIM announced the
availability of a new smartphone in February 2002, the BlackBerry 5810,
that allows users to make voice calls over GSM networks as well as
access RIM's BlackBerry e-mail service.[^430] In February 2002,
Microsoft and HP unveiled the HP Jornada 928, which incorporates
Microsoft's newly-designed operating system for mobile telephones,
Pocket PC 2002 Phone Edition. The Jornada 928, which will connect to
GSM/GPRS networks, integrates voice capabilities with the data
communication functions and Microsoft software found on other Pocket PC
devices.[^431] And in the spring of 2002, Verizon Wireless released a
smartphone manufactured by Audiovox, called Thera, which runs Pocket PC
2002 and connects to Verizon Wireless's cdma2000 1xRTT network.[^432]

##### Operating Systems

While there are several PDA device manufacturers, most PDAs use one of
two major operating systems: Palm's PalmOS or Microsoft's Pocket
PC.[^433] 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. Approximately 72 percent of all PDAs sold in
the United States during 2001 run PalmOS.[^434] In the fall of 2001,
Palm began creating a separate subsidiary, now called PalmSource, Inc,
for its PalmOS product.[^435] 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.[^436] For example, one
company, DataViz, has developed software called Documents To Go that
allows PalmOS device users to open and edit documents created in
Microsoft Word and Excel, and to view documents created in Microsoft
PowerPoint.[^437] The second major PDA operating system, Pocket PC, is
similar to Windows, and all Pocket PC devices include PDA versions of
most of the Microsoft Office desktop software applications, including
Outlook, Word, Excel, PowerPoint, and Internet Explorer. In October
2001, Microsoft released an updated version of its PDA operating system,
Pocket PC 2002, and several Pocket PC device manufacturers, including
Compaq, Casio, and HP, simultaneously released new PDA models that run
the new operating system. The improvements in mobile access to e-mail
and corporate servers allowed by Pocket PC 2002 are discussed further in
Section II.B.3.d., E-mail and Corporate Server Access, *infra*.
According to one analyst, worldwide shipments of Windows CE and Pocket
PC PDAs increased 120 percent during 2001.[^438]

#### Paging Sector

The paging mobile data subsector, as described herein, includes carriers
that use paging and narrowband PCS spectrum to offer traditional one-way
paging services as well as two-way advanced messaging services, which
are discussed in more detail below.[^439] Arch Wireless Communications,
Inc. ("Arch Wireless") and Metrocall, Inc. ("Metrocall") are the largest
paging carriers and had a combined total of 13.7 million units in
service at the end of 2001.[^440] The Commission estimates there were 18
million paging units in service as of mid-2001.[^441] Other major paging
carriers include SkyTel Communications, Inc. ("SkyTel")[^442] and
WebLink Wireless, Inc. ("WebLink"). In addition to these major carriers,
there are hundreds of smaller paging operators who compete with these
larger carriers.

During 2001, paging carriers endured financial difficulties as a result
of the continuing decline in demand for traditional one-way paging
services,[^443] which has long constituted the bulk of these carriers'
revenue,[^444] as well as intense competition from other mobile data
providers in the market for more advanced mobile data services.[^445] As
mentioned in the *Sixth Report*, TSR Wireless, Inc. filed for bankruptcy
in December 2000, and WebLink filed for Chapter 11 bankruptcy in May
2001.[^446] In October 2001, WebLink filed a restructuring plan
detailing how the company intended to emerge from bankruptcy.[^447] In
December 2001, Arch Wireless and its subsidiaries filed for Chapter 11
bankruptcy protection, and in January 2002 filed a plan of
reorganization with the bankruptcy court.[^448] Finally, Metrocall filed
a Chapter 11 bankruptcy petition for reorganization in June 2002.[^449]

Paging carriers have continued to compete with each other and with other
mobile data providers by offering advanced, two-way mobile data services
and by upgrading their networks to allow for such services. During 2001,
SkyTel upgraded its ReFLEX network to version 2.7, and Arch announced
that it was planning to upgrade its network to version 2.7 during
2002.[^450] This upgrade reduces network latency, or the time it takes
to transfer a message through the network, thereby allowing chat and
instant messaging applications among subscribers. Paging carriers claim
that the upgraded 2.7 networks are powerful enough to compete with the
data networks operated by Cingular Wireless and Motient,[^451] through
which many handheld devices connect to the wireless Internet.[^452]

On December 5, 2001, the Commission completed the auction of over 15,000
20- and 40-kilohertz paging licenses in the 35 MHz, 43 MHz, 152 MHz, 454
MHz, 929 MHz, and 931 MHz bands.[^453] Most licenses were auctioned on
an EA geographic basis, while the 929 and 931 MHz band licenses were
auctioned by MEAs. These licenses were encumbered by the operations of
existing paging carriers using site licenses. In this auction, 182
bidders won 5,323 licenses, and net high bids totaled \$12.9
million.[^454] The fact that many of the licenses remained unsold
probably reflects the fact that the operations of existing licensees
were in some cases so extensive that the "white space" available was not
sufficient to attract bidders. Moreover, capital market constraints
facing the paging industry also likely influenced the limited demand for
certain licenses.

### Mobile Data Services

#### Paging

Traditional paging service consists of one-way data communications sent
to a mobile device that alerts the user when it arrives. The
communication could consist of a phone number for the user to call, a
short message, or an information update. Other mobile data providers in
addition to paging carriers offer paging services. For instance, most
digital mobile telephone handsets include a paging component or Caller
ID feature that allows users to view the phone number of someone who has
called them. While paging carriers have faced competition with these
types of features offered by mobile telephone carriers, traditional
paging devices are generally less expensive and, in some cases, receive
better in-building coverage than mobile telephone handsets.[^455] The
more advanced two-way mobile data services offered by paging carriers,
such as two-way messaging and web and e-mail access, are discussed below
in their respective subsections.

#### SMS and Instant Messaging 

SMS provides the ability for users to send and receive text messages to
and from mobile handsets with maximum message length ranging from 120 to
500 characters.[^456] SMS also can be used to deliver a wide range of
information to mobile users, including stock prices, sport scores, news
headlines, weather reports, and horoscopes. Worldwide, SMS has become
increasingly popular, growing to 250 billion messages sent over wireless
networks worldwide in 2001.[^457]

Two-way SMS was introduced in the United States in May 2000 when
VoiceStream began to offer the service.[^458] As of year-end 2001, the
six nationwide mobile telephone carriers, as well as handheld providers
and some smaller mobile telephone carriers, were offering SMS.[^459] At
the end of 2001, AT&T Wireless became the first carrier to offer
cross-carrier network SMS capabilities.[^460] A short time later, most
of the nationwide carriers announced similar plans.[^461] Mobile
telephone carriers that offer cross-carrier SMS have reported increased
traffic since implementing this capability on their networks. AT&T
Wireless stated that it has experienced 29 percent SMS growth from
November 2001 through the end of March 2002, while Verizon has reported
SMS traffic up to 4 million messages per day.[^462]

Pricing plans for SMS offered by mobile telephone carriers vary;
however, with most carriers, charges are usually incurred in addition to
monthly voice and/or wireless web service plan fees. Providers typically
charge a fixed monthly fee for a set number of messages, although
subscribers can also pay per message.[^463] For example, Verizon
Wireless offers customers a plan for \$2.99 per month for 100 messages
and a plan for \$7.99 per month for 600 messages. With both plans,
additional sent messages are \$0.10 and received messages are
\$0.02.[^464] Both Cingular Wireless and Nextel offer SMS *à la carte*
or bundled with their wireless web plans. Nextel offers a plan for \$5
that allows unlimited messages,[^465] or users can receive 300 messages
as part of the company's wireless Internet package.[^466]

In addition to SMS, some mobile telephone carriers offer instant
messaging ("IM") services for mobile devices. Instant messaging
services, such as AOL Instant Messenger ("AIM") and MSN Messenger,
enable users to send and receive messages within a community of users,
creating a chat-style atmosphere, whereas SMS is communication between
two individuals.[^467] AT&T Wireless, Sprint PCS, and VoiceStream offer
AIM to their mobile customers,[^468] and Cingular Wireless offers MSN
Messenger to its mobile customers.[^469] Users of the Palm i705 also
receive "always on" access to AIM.[^470] From their mobile devices, AIM
users are able to tell whether or not someone from their "buddy list" --
a list of other AIM users with whom the initial user communicates -- is
online. In addition, AIM users can communicate with their "buddies"
regardless of whether the buddies are on a PC or on a mobile
phone.[^471] We note that many in the industry have raised concerns
about competitiveness and access issues in instant messaging.[^472]

#### Web Content 

Using their existing and next generation networks, at least seven major
mobile telephone service providers[^473] currently offer text-based
wireless web[^474] services via mobile telephone handsets at speeds
ranging from approximately 14.4 kbps on 2G networks to 60 kbps on
advanced wireless networks.[^475] During 2001, mobile telephone
providers expanded their data service offerings as they began migrating
their networks to higher speed technologies. In addition to offering
wireless web service on mobile telephone handsets, several carriers
offer wireless Internet connections via wireless modem cards for PDAs
and laptop computers as well.

As explained in the *Sixth Report*, mobile telephone service providers
offer wireless web services that enable customers to surf web sites for
news, stock quotes, traffic reports, weather forecasts, movie listings,
shopping, and other text-based information.[^476] To deliver wireless
web content to wireless handset users, carriers continue to employ the
"walled garden" approach, which means all carriers currently restrict
the content users can access via wireless handsets on their
networks.[^477] However, customers who connect to the Internet via a
mobile telephone or wireless modem card attached to a laptop are able to
access the full content of the web.[^478]

Many PDAs have the ability to access almost the entire content of the
web. For example, Pocket PC PDAs, which include a PDA version of
Microsoft's Internet Explorer web browser, are able to access any web
site designed in HTML or WAP formats.[^479] Handspring PDAs and Treo
smartphones, as well as certain PalmOS-based devices,[^480] can access
web content with Handspring's Blazer browser, which supports web pages
written in HTML, cHTML, or WAP.[^481] While many PDAs have the potential
to access web content with their browsing software, they still require a
subscription to a wireless Internet Service Provider ("WISP") in order
to connect to the wireless Internet. WISPs such as EarthLink, Inc.
("EarthLink") and GoAmerica offer monthly wireless Internet access
subscriptions for numerous handhelds, including Pocket PC and PalmOS
devices, RIM BlackBerry PDAs, and two-way pagers such as the Motorola
Talkabout T900.[^482] While RIM's BlackBerry service focuses on the
delivery of e-mail instead of web content, BlackBerry users can access
web content while mobile through services offered by third party WISPs
such as EarthLink, GoAmerica, Oracle Mobile, and WolfeTech.[^483]

Palm i705 and VII users must access the Internet with a monthly
subscription to Palm's Palm.Net wireless Internet access service.
Palm.Net subscribers do not have access to the entire web, but browse
the web with Palm's web clipping applications, which allow users to view
text-based information from over 600 web-clipped Internet sites that
have been specially designed for Palm.Net.[^484]

For wireless web service on 2G networks, most mobile telephone carriers
charge an additional monthly fee beyond voice service ranging from \$6
to \$14.[^485] In addition, Internet access minutes are deducted from
the customer's minutes included in their monthly service plans.[^486] If
customers exceed their allotted monthly minutes, they must pay
per-minute airtime charges for wireless web or voice service.[^487]

For wireless web service on advanced wireless networks, users typically
receive a bucket of MB to download depending on their plan, and
additional MB downloaded beyond the plan limit cost extra. Prices for
this type of high-speed data plan vary by provider, since some providers
bundle other services with their plans. For example, VoiceStream allows
customers to add-on wireless web service to any voice plan for \$2.99
for one MB of data and \$10 per extra MB.[^488] Verizon Wireless also
allows customers to add-on high-speed wireless web service with
unlimited usage for \$30.[^489] AT&T Wireless offers two types of rate
plans. Customers can add data services to existing voice plans starting
at \$29.99 for 5 MB of downloaded data.[^490] The company also offers
plans that bundle high-speed wireless web service with voice services.
Bundled voice and data plans start at \$39.99 for 250 voice minutes and
one MB of downloaded data.[^491]

#### E-mail and Corporate Server Access 

As workers become increasingly more mobile and remote, the ability for
employees outside the office to access e-mail messages and files stored
electronically on corporate servers is likely to become an increasingly
more important mobile data application.[^492] Analysts claim that giving
employees mobile access to e-mail as well as to data and applications
stored on corporate servers are two of the most important uses of PDAs
in the enterprise market.[^493] One recent survey of U.S. firms that
plan to deploy mobile systems for employees found that 83 percent listed
mobile access to e-mail as the top priority,[^494] and another recent
survey of 400 large corporations found that 47 percent are deploying
wireless e-mail access.[^495]

Different types of mobile e-mail access services are currently available
on different devices from various providers. Some mobile carriers and
devices allow users to access e-mail messages from a personalized
account provided by the carrier, such as username@carrier.com. Some
mobile e-mail services allow users to access existing web-based, or
POP3, e-mail accounts provided by web portals such as Yahoo or
MSN.[^496] The most advanced mobile e-mail services give users direct
access to their existing 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.

The pioneer provider of mobile access to corporate e-mail accounts has
been RIM with its BlackBerry service. BlackBerry allows users to receive
pushed e-mail messages automatically from an existing corporate e-mail
account on one of RIM's mobile devices. About 289,000 people in North
America have subscribed to BlackBerry service since 1999,[^497] and more
than 13,000 North American organizations have integrated BlackBerry into
their office e-mail systems.[^498]

While the e-mail services available from mobile telephone carriers on
mobile telephone handsets vary, most carriers offer the ability to send
and receive messages from a personalized carrier account and from a POP3
account. For example, AT&T Wireless offers its voice subscribers e-mail
access with its PocketNet Plus plan for an additional \$6.99 per month
beyond voice service.[^499] E-mail subscribers receive a personalized
AT&T Wireless PocketNet account and can access existing Yahoo, AOL, or
AT&T WorldNet e-mail accounts.[^500] They can send, receive, and forward
messages and Microsoft Word or text document attachments.[^501]
VoiceStream's newly-introduced iStream WirelessInbox service allows
customers to access their corporate Microsoft Outlook or Lotus
Notes-based e-mail accounts, as well as POP3 e-mail accounts.[^502]
Users can send, receive, reply to, delete, and forward messages.[^503]
The service can be accessed from a Motorola P280 GPRS handset, a Pocket
PC PDA, or a laptop computer (using either the P280 handset or the G100
wireless modem card for a connection).[^504]

The Palm i705 allows users to receive pushed e-mail messages from up to
eight different accounts, including a Microsoft Outlook-based corporate
e-mail account, a Palm.net account, an EarthLink account, and POP3
accounts such as Yahoo.[^505] Unlimited Internet access, including
access to e-mail, the web, and IM, costs \$39.99 per month, or \$34.99
per month with a one-year commitment.[^506] The device vibrates or
flashes when new messages arrive.[^507]

In addition to offering the ability to access corporate e-mail accounts,
some mobile data providers offer a related service, the ability to
access electronic files stored on a corporate server from a mobile
device. Microsoft became a leading facilitator of this service with the
release of its Pocket PC 2002 operating system in October 2001 and its
Pocket PC 2002 Phone Edition smartphone operating system in February
2002.[^508] Both operating system editions allow users of Pocket PC 2002
devices to establish a secure virtual private network ("VPN") connection
over the wireless Internet to retrieve e-mail messages and files that
are stored on corporate servers.[^509]

Many mobile data companies offer customized mobile access products
directly to business customers. For example, GoAmerica sells a service
to enterprise customers called Mobile Office that allows their employees
to access proprietary corporate data applications with wireless-enabled
PDAs, including the Palm i705.[^510] In January 2002, Arch Wireless
began offering its Enterprise Solution product to businesses. The
product can reportedly give a business's mobile workforce secure,
real-time access to firewall-protected files, e-mail, calendar
functions, and enterprise applications on a variety of wireless
devices.[^511]

#### Location-Based Services

The Commission's Enhanced 911 rules ("E911") provide that starting on
October 1, 2001, wireless carriers were required to begin a phase-in of
automatic location identification ("ALI") for 911 calls upon request by
public safety answering points ("PSAPs").[^512] Carriers have announced
plans for complying with these requirements, called E911 Phase II, but
generally at later dates than set by the rules.[^513] The Commission has
granted waivers allowing delays in initial deployment by the major
national wireless carriers, while setting more specific, detailed
deployment benchmarks than in the original rules and continuing to
target complete deployment by the end of 2005.[^514] Similar waiver
requests from smaller carriers are under consideration.[^515] In
addition, several matters concerning compliance with the E911 Phase II
requirements have been investigated by the Enforcement Bureau.[^516]

Wireless carriers may comply with the ALI requirement using any of
several location technologies, or combinations of technologies.[^517]
For example, carriers may employ network-based or handset-based
technologies, or hybrid technologies that require upgrades to both
handsets and carrier networks. Currently, wireless carriers plan to
deploy three primary location technologies, depending upon the carrier's
air interface technology. Nationwide CDMA carriers Sprint PCS and
Verizon Wireless and iDEN carrier Nextel plan to employ Assisted GPS
("A-GPS"), a hybrid technology that requires handsets upgraded to
include Global Positioning System ("GPS") location capability and
assistance from network components.[^518] For their GSM networks, AT&T
Wireless, Cingular Wireless, and VoiceStream are planning to deploy a
hybrid technology called Enhanced Observed Time Difference of Arrival
("E-OT"D) that requires handsets with E-OTD software plus added network
equipment and upgrades to network software.[^519] In addition, some
carriers are deploying network-based technologies.[^520] These
network-based ALI solutions do not require changes to handsets. For its
TDMA networks, Cingular has indicated that it will deploy a
network-based solution and has entered a consent decree with the
Commission whereby it will deploy its E911 solution in accordance with
specific benchmarks.[^521] AT&T Wireless is currently in consent decree
negotiations with the Enforcement Bureau relating to a similar issue.

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 ALI-capable handsets in October 2001, and reports
that, as of the end of 2001, it had sold over 120,000 handsets with
A-GPS capability.[^522] Verizon Wireless began selling similar A-GPS
handsets in December 2001.[^523] Sprint PCS has committed to selling 100
percent A-GPS handsets by the end of this year.[^524] Verizon Wireless
has committed to selling 50 percent of its handsets with A-GPS
capabilities beginning in the second quarter of 2003, ramping up to 100
percent by the end of that year.[^525] The three largest carriers using
GSM have committed to begin selling EOTD handsets this fall and plan to
have 100 percent of their new handsets be EOTD capable by the summer of
2003.[^526]

In addition to E911, ALI can be used for a variety of other
location-based services such as driving directions, mobile yellow pages,
and the location of retailers, restaurants, or movie theaters.
Application service providers are currently developing software that
will enable a range of location-based services and can be tailored to a
customer's needs based upon their location. For example, AirFlash, Inc.
is an application service provider that develops software that plots the
location of businesses, hotels and restaurants. The software also allows
the user to share the information with others via e-mail.[^527]

Carriers' abilities to obtain and transmit precise location information
in fulfillment of the Commission's E911 rules 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.

In September 2000, Ericsson, Motorola, and Nokia founded the Location
Interoperability Forum, whose purpose is to define, develop, and promote
a common and ubiquitous location services solution.[^528] The Forum
announced a draft protocol in December 2001 to define a common interface
for the exchange of location information between location-based
applications and the wireless networks. This proposed standard is
intended to promote rapid introduction of location-based services
worldwide.[^529] Companies have also entered into a number of
partnerships to develop location-based services. For example, MapInfo,
Inc. and Siemens have partnered to enable wireless carriers to deliver
personalized Internet services based on a customer's current or intended
location.[^530]

#### Short Range Data Transmissions

While these services are not CMRS and hence are beyond the scope of this
report, we mention them here briefly because of their increasing
presence in the wireless data market. Short-range data transmission is
device-to-device communication over short distances, typically via
unlicensed spectrum.[^531] The three main short-range data transmission
technologies are infrared, Bluetooth, and Wireless Fidelity ("WiFi").
Infrared, a well-established technology, is currently used in some PDAs
to allow users to transfer data between two devices. Infrared is also
the technology commonly used in remote controls and requires
line-of-sight transmission. Bluetooth enables multipoint, broadcasting
applications, and WiFi enables devices to connect to wireless local area
networks ("WLAN").

*[Bluetooth.]{.underline}* Bluetooth is a technology used to establish
wireless connectivity between electronic devices that are up to 10
meters apart.[^532] Bluetooth allows users to send signals and transfer
data among numerous electronic devices, thus creating a personal area
network ("PAN").[^533] Bluetooth uses unlicensed spectrum in the 2.4 GHz
band and transmits data at speeds close to one Mbps. Bluetooth also uses
frequency hopping spread spectrum techniques to provide enhanced
communications performance and an initial level of transmission
security.[^534]

As mentioned in the *Fifth Report*, Bluetooth is widely backed by major
players in the wireless industry, including Ericsson, Intel Corp.,
International Business Machines Corp. ("IBM"), Nokia, Toshiba, 3Com
Corp., Lucent, Microsoft, and Motorola.[^535] As a result of industry
cooperation, analysts forecast a large market for Bluetooth products.
For example, Frost & Sullivan estimates there will be more than one
billion Bluetooth-enabled devices shipped by 2007, generating \$318
billion.[^536] Cahners In-Stat Group predicts that 780 million chip-set
units will be shipped in 2005.[^537]

[*WiFi*.]{.underline} Another wireless networking technology sharing the
2.4 GHz frequency band with Bluetooth is the Institute of Electrical and
Electronics Engineers ("IEEE")[^538] 802.11b standard, also called WiFi.
The 802.11b standard is used to connect devices to WLANs, and allows a
maximum throughput of 11 Mbps.[^539] Analysts have made several
predictions about the growth of the WLAN market and WiFi. Frost &
Sullivan predicts that WLAN industry revenues will reach \$884 million
by 2002, compared to \$415 million in revenues forecast in 1999.[^540]
The Dell'Oro Group expects the WiFi market to grow by 35 percent in
2002.[^541] Gartner Group estimates 95 percent of notebook computers
will be 802.11b-enabled by 2005.[^542]

The technology is being used in a number of WLAN settings, such as
college campuses, business parks, office buildings, and even private
houses. It is also being implemented by a number of vendors in public
places such as airports, hotels and Starbucks stores to give users of
WiFi-enabled notebook computers, handheld devices, and smartphones
wireless Internet access anywhere inside those locations.[^543] For
example, Wayport, a broadband service provider, has installed WiFi
networks in nine airports, 3,500 hotel conference rooms, and 800 other
WiFi access points or "hot spots.[^544] In September 2001, Wayport
signed an agreement with IPass, a global provider of network access to
ISPs, to provide IPass subscribers Internet access via Wayport's WiFi
networks in airports and hotels around the U.S.[^545]

Boingo Wireless ("Boingo"), a WiFi service provider, also offers
wireless broadband Internet access in popular venues such as major
hotels, airports, and coffee shops across the nation.[^546] Boingo
integrates WiFi hot spots from various providers to deliver broadband
Internet service to its customers.[^547] As of May 2002, Boingo had was
offering WiFi broadband Internet access in nearly 600 hot spots across
the United States.[^548] The company plans to be connected to over 2,000
hot spots by the end of 2002.[^549]

On May 11, 2001, the Commission amended Part 15 of its rules for spread
spectrum devices and proposed the following changes to systems operating
in the 2.4 GHz band: revise rules for frequency hopping spread spectrum
systems; eliminate the processing gain requirement for direct sequence
spread spectrum systems; and allow digital transmission technologies to
operate pursuant to the same rules as spread spectrum systems.[^550]

### Telemetry and Telematics

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.[^551]

Location-based services first appeared in vehicles as navigational
devices using GPS technology to determine the vehicle's location.[^552]
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.[^553] 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.[^554] As of January 2002, OnStar was available in
36 vehicle models and had more than 2 million subscribers.[^555]

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.[^556] Over 40,000 stolen
vehicles equipped with LoJack have been recovered by U.S. law
enforcement agencies.[^557]

The two major AMR providers are Itron, Inc. ("Itron") and Schlumberger
Resource Management Services, Inc. ("Schlumberger").[^558] Itron focuses
exclusively on providing AMR telemetry equipment and is the largest
provider in that market. As of the end of 2001, Itron had connected 17.6
million AMR units for 625 utility companies in North America.[^559] As
of the end of 2000, Schlumberger had connected over 5 million consumers
to its CellNet wireless telemetry network.[^560]

Many mobile data providers discussed above, including WebLink, SkyTel,
Motient, and Cingular, offer a variety of telemetry services, either
directly to end users or through other telemetry providers who create
and maintain telemetry computer systems for end users but rely on the
networks of mobile data providers.[^561] As mentioned in the *Sixth
Report*, many analysts and industry players believe that the telemetry
market could represent a significant business opportunity for
paging/messaging carriers.[^562] 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.[^563]

# CONCLUSION

The past year has continued the positive trends of increased competition
in the CMRS industry described in previous reports. In 2001, the mobile
telephone sector experienced another year of impressive subscriber
growth, increased usage, and declining prices. As of December 2001, the
Commission estimates that the sector had 128.5 million subscribers,
which translates into a nationwide penetration rate of roughly 45
percent.[^564] Other key metrics also demonstrate the increased demand
for and reliance placed on mobile services. During 2001, MOUs and ARPU
increased, while, according to BLS, the price of mobile telephone
service fell by 5.5 percent.[^565]

Digital technology is now dominant, with 97 percent of the total U.S.
population living in counties where operators offer digital mobile
telephone service, and 80 percent of all mobile telephone subscribers
using digital phones at the end of 2001.[^566]

Mobile telephony providers continued to expand their nationwide
footprints and buildout their networks.[^567] To date, 268 million
people, or 94 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 229 million people, or 80 percent of the U.S.
population, live in counties with five or more mobile telephone
operators competing to offer service. And 151 million people, or over 53
percent of the population, can choose from among six or more different
mobile telephone operators.

In addition, while 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.[^568] According to one
poll, almost one in five mobile telephony subscribers regard their
wireless phone as their primary phone.

Competition continues to be an integral force in shaping the mobile data
sector. A multitude of dynamic mobile data services, service packages,
and pricing plans are available to consumers from a variety of
providers, including mobile telephone carriers, paging carriers, and
handheld device providers. Analysts estimate there were approximately 8
to 10 million mobile Internet users at the end of 2001, up from 2 to 2.5
million at the end of 2000.[^569] Furthermore, as of March 2002, four
nationwide mobile telephone operators were offering mobile Internet
access services for mobile telephone handsets, PDAs, and/or laptops at
speeds generally ranging from 25 to 60 kbps,[^570] with maximum bursting
rates up to 144 kbps for at least one carrier. These advanced wireless
services using GPRS and 1xRTT networks were available in at least some
portion of U.S. counties covering approximately 181 million
people.[^571] Paging carriers have continued to compete in the mobile
data sector by upgrading their networks and offering a variety of
advanced, two-way messaging services.[^572] Furthermore, nearly all of
the estimated 6.6 million PDAs sold during 2001 offered users some
method of connecting to the Internet while mobile.[^573] Mobile data
providers offer their customers a variety of services, including
messaging, Web content, and e-mail access, and these services have
become increasingly similar across devices during the past year.[^574]

The GPRS and 1xRTT deployments by mobile telephone carriers have
contributed to the further convergence of voice and data services.
During the past year, the distinction between mobile telephones, which
have traditionally been voice-centric devices, and PDAs, which were
primarily data-centric devices, began to blur with the emergence of
smartphones. As discussed above, several major mobile data providers
have released smartphone devices that combine the organizational and
data-centric features of PDAs with the voice capabilities of mobile
telephones.[^575] The industry is likely to witness an even greater
level of voice and data convergence as mobile data providers make their
planned deployments of further network upgrades over the next few
years.[^576]

As evidenced by this year\'s forum and report, the Commission is always
interested in improving the quality and quantity of the data contained
in this Report. To that end, for next year\'s report, for the first
time, the Commission will issue a Notice of Inquiry to solicit
additional data from the public. In doing so, our goal is to provide the
most complete picture possible of the state of CMRS competition. In
particular, we hope to build on the new data in this year's report on
the state of competition in rural areas to provide a fuller picture of
the state of competition throughout the United States. We encourage the
public to participate fully in this process to ensure the best
information available for our Report to Congress.

# ADMINISTRATIVE MATTERS

This Seventh 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).

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.

FEDERAL COMMUNICATIONS COMMISSION

Marlene H. Dortch

Secretary

**[STATEMENT OF COMMISSIONER]{.underline}**

**[MICHAEL J. COPPS]{.underline}**

June 13, 2002

*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.*

I support today's Report because we have made progress in improving the
quality of the data we rely on; because we state that our data is still
incomplete; and because the Commission has committed to a wide-ranging
Notice of Inquiry to gather more adequate data before the next CMRS
Competition Report.

CMRS is a real success story. This Report shows how, in many areas,
there is real competition, declining prices, reduced roaming charges,
and innovative service offerings. Consumers are benefiting from this
competition everyday. As cable and fixed telephone rates increase, we
can all see what happens for consumers when many strong competitors
exist -- prices decline.

However, I want to point out two dark clouds on the horizon of this
sunny sky. First, our Report shows that this competition is not uniform
across the country. Rural consumers have far less choice than urban
consumers. In 50% of the country, consumers have a choice of two or
fewer wireless companies. The majorities or close to majorities of
Alaska, Arizona, Colorado, Kentucky, Missouri, Montana, Nebraska,
Nevada, New Hampshire, North Dakota, South Dakota, Vermont, and West
Virginia are served by two or fewer carriers. Such areas are, of course,
far less populated than more urban states. But they are no less
important for that.

So I am concerned that our Report continues to define an entire county
as being served by a carrier if any part of the county is served. This
means we count an entire county as served even though only a highway
that runs through it is actually served. And we find competition in a
county even where two apparent competitors do not venture into each
other's territory to actually compete. Finding more granular data is
difficult. But, just as in the broadband context of Section 706, when we
have insufficient data, we should not rush to judgment and assume
competition without proof. I'm glad that the Report notes that we lack
"data specific to rural markets." The Commission sought additional data
in a forum on data collection earlier this year. Unfortunately, most of
the data collected was anecdotal. This is not enough. While we can make
a judgement on competition in urban areas, better data is needed to give
us clear answers on competition throughout the country. The NOI has the
potential to give us what we need.

The second dark cloud is that this Report does not mean, nor should it
be read to imply, that the competition we celebrate is safe from
threats. We should not be tempted to see this report as license to
declare the wireless industry uniformly competitive or invulnerable to
serious competitive problems. Mergers, some of them far-reaching, are
altogether likely in the wireless industry. The competition we have seen
develop could yet be lost if we are not vigilant.

I would also like to point out that nothing in this Report changes the
Commission's previous finding that the CMRS market is already
characterized by "moderate to high concentration levels."[^577] Going
further, Leap Wireless, in another proceeding, offering economic studies
that state that the average Herfindahl-Hirshman Indices (HHIs) for even
the top 25 wireless markets -- which are more competitive than smaller
markets -- are "well above the level considered to be 'highly
concentrated' by antitrust authorities."[^578] The Commission has
previously stated that "\[w\]e find that the limited amount of spectrum
suitable for CMRS available today creates a significant barrier to
entry, at least in MSAs."[^579] Is a highly concentrated market
consistent with "a high level of competition?"[^580] What does the
presence of a "significant barrier to entry" mean for the continuance of
a high level of competition? If the industry consolidates significantly
more, what happens to the current levels of competition we cite today?
We need to explore this issue further.

I also must note that in discussing "churn" in this Report we are less
than clear about the fact that our churn data is insufficient and our
findings inconclusive. We have not found that current churn rates
suggest either increasing or decreasing competition.

I want to conclude by commending the staff who put this Report together.
It's a daunting task, and they did it well. We all have lots more work
ahead of us, I'm afraid, but I'm confident that we can continue to
improve our understanding of this market with such a high-quality team.
And, I hope, with widespread input from all interested stakeholders --
and they should be many.

**APPENDIX A:**

**FIXED WIRELESS VOICE AND DATA SERVICES**

# Introduction and Overview

In this section, the Commission reviews the current state of the fixed
wireless[^581] industry, including the market for voice and data
services to both residential and business customers. The first part of
Appendix A provides an overview of fixed wireless systems. The second
part discusses recent developments in the industry, including the recent
financial difficulties faced by many operators, two notable service
terminations, the current level of service deployment, and significant
policy changes related to spectrum bands used for fixed wireless
service.

The *Sixth Report* gave an overview of fixed wireless technology[^582]
and many of its advantages over wireline systems.[^583] Fixed wireless
operators use several spectrum bands, including Multipoint Distribution
Service ("MDS"),[^584] Wireless Communications Service ("WCS"),[^585]
unlicensed spectrum bands, 24 GHz, Local Multipoint Distribution Service
("LMDS"), and 39 GHz, to provide such service. In addition, some
licensees of spectrum bands traditionally used for CMRS are using that
spectrum to provide fixed wireless services.[^586] This report groups
operators into two major categories: lowerband providers (800 MHz to 5.8
GHz) and upperband providers (24 GHz to 39 GHz)[^587] due to the similar
technical characteristics of the bands within each category.

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).[^588] Therefore, the range of individual transmitters in
the upperbands is approximately two to five miles.

# Recent Developments

## Bankruptcies

During 2001, several carriers exited the fixed wireless business, either
through bankruptcy or service terminations. As discussed in the *Sixth
Report*, three major upperband carriers -- Winstar Communications, Inc.
("Winstar"), Teligent, Inc. ("Teligent") and Advanced Radio Telecom
("ART") -- filed for bankruptcy during 2001.[^589] These bankruptcies
have led to less competition in the fixed wireless market, and less
intermodal competition for telecommunications services to business
users.[^590]

Teligent, which filed for bankruptcy in May 2001,[^591] has since sold a
large portion of its assets, including \$1 million worth of transmission
equipment, office space, and supplies to NextWave Telecom.[^592] In
January 2002, a group of lenders announced that they plan to use the
proceeds from the sale of Teligent's assets, as well as additional
financing, to fund a successor fixed wireless company.[^593] The new,
yet unnamed company will reportedly hold the former Teligent's wireless
licenses and plans to abandon the retail business in favor of becoming a
wholesale carrier of fixed wireless access for other carriers.[^594]

Winstar filed for Chapter 11 bankruptcy protection in April 2001.[^595]
In January 2002, IDT Corp. ("IDT") received approval from the bankruptcy
court to purchase Winstar's assets for \$42.5 million.[^596] IDT is
currently in the process removing the former Winstar from the wireline
resale business, terminating its fixed wireless operations in certain
smaller markets, and consolidating some of its facilities with IDT's
business.[^597] IDT also plans to increase Winstar's buildings on-net by
600 in 22 of the cities where Winstar had maintained its operations
after it entered bankruptcy proceedings.[^598]

ART filed for bankruptcy in March 2001 and announced it would phase out
service to its existing customers over the following month.[^599] Most
of ART's assets were purchased by First Avenue Networks Corp., which now
sells fixed wireless access on a wholesale basis to other
carriers.[^600]

XO Communications, Inc. ("XO"), a wireline CLEC that also holds LMDS and
39 GHz licenses covering 95 percent of the population of the 30 largest
U.S. cities, has been offering fixed wireless broadband services to
businesses in 27 markets.[^601] On June 17, 2002, XO filed for Chapter
11 bankruptcy protection and submitted a reorganization plan with two
alternative scenarios for reorganizing and restructuring its balance
sheet.[^602] The company stated that it would continue to fund its
operations while its bankruptcy case is pending.[^603]

## Service Terminations

Among the lowerband carriers, AT&T Wireless and Sprint both announced in
the fall of 2001 that they were terminating their fixed wireless
operations. At the writing of the *Sixth Report*, AT&T Wireless was
offering its fixed wireless voice and data service, Digital
Broadband,[^604] to residential customers in five cities.[^605] As of
January 2001, the company had sold a total of 20,000 lines to 12,000
households.[^606] However, in October 2001, AT&T Wireless announced it
was exiting the fixed wireless business and phasing out service to its
47,000 existing customers.[^607] And Sprint, which had launched its
Broadband Direct MDS-based high-speed Internet access service in 16
cities across the United States,[^608] announced in October 2001 that it
was discontinuing the deployment of Broadband Direct. The company stated
at that time that it would continue to serve its 52,000 existing
Broadband Direct subscribers.[^609]

Many analysts believe that fixed wireless carriers are awaiting the
availability of next-generation technologies that will not require a
direct line-of-sight between subscribers' antennas and their receivers
before making further deployments.[^610] These new technologies will
reportedly lower carriers' costs and increase their service options
significantly.[^611] Orthogonal Frequency Division Multiplexing ("OFDM")
is a technology standard that has the potential to overcome the
line-of-sight restriction and is expected to increase the speeds of
wireless networks.[^612] OFDM-based equipment is currently being
developed for use in multiple wireless products, including wireless
LANs, mobile wireless systems, and broadband fixed wireless
access.[^613]

## Service Availability

In contrast to the service terminations and financial distress of its
fellow fixed wireless carriers, WorldCom Inc. ("WorldCom") has continued
to roll out high-speed, fixed wireless Internet access service using its
MDS and WCS spectrum during the past year.[^614] At the writing of the
*Sixth Report*, WorldCom was offering commercial service in three
markets and was running trials in two additional markets.[^615] As of
February 2002, the company had expanded its offering of fixed wireless
broadband services to business customers to a total of 13 U.S.
markets.[^616]

Several smaller fixed wireless carriers, including hundreds of operators
using unlicensed spectrum,[^617] 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.[^618] 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.[^619] In fact, at least one industry analyst claims that,
while fixed wireless has the potential to compete with DSL and cable
modem service, the technology is best-suited for rural and underserved
markets where these services may not be available.[^620] Other analysts
believe that the technology will be deployed mainly to residential, not
business, customers.[^621]

Estimates of the number of fixed wireless customers vary. One analyst
estimates that there were 100,000 fixed-wireless broadband subscribers
in the United States as of May 2001,[^622] while another estimates there
are were 300,000 fixed wireless subscribers, including businesses, in
the United States as of October 2001.[^623]

As mentioned in the *Sixth Report*, the Commission has begun tracking
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 222 different lowerband
operators providing fixed wireless services in 466 different
counties.[^624] These counties contain 124 million people, or 43.5
percent of the U.S. population.[^625] 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 *Sixth Report*, the Commission was evaluating the
possible use and reallocation of the 2500-2690 MHz band for advanced
wireless, including 3G mobile, services.[^626] However, due to the
extensive use of that band by incumbent MDS and ITFS operators for
services including high-speed fixed wireless Internet access, the
Commission decided in September 2001 not to reallocate that band
specifically for 3G services, but instead to permit mobile use of the
spectrum by MDS licensees.[^627] Analysts and industry players generally
believe the decision has given fixed wireless carriers and equipment
vendors additional flexibility, and may help to revive the
industry.[^628] In addition, in August 2001, the Commission proposed the
possible reallocation of the remaining MDS spectrum, the 2150-2160/62
MHz band, for advanced wireless services, including 3G systems.[^629]
MDS licensees currently use this band primarily for the upstream links
in two-way, fixed wireless broadband services.[^630]

**APPENDIX B:**

**SPECTRUM AUCTIONS**

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

Table 1A: FCC Auctions Summary - Service Design B-2

Table 1B: FCC Auctions Summary - Auction Results B-4

Table 2: VHS Public Coast and LMS Auction #39 Results B-5

Table 3: Paging Auction #40 Results B-6

Table 4: Narrowband PCS Auction #41 Results B-9

Table 5: Multiple Address Systems Spectrum Auction #42 Results B-9

Table 6: Multi-Radio Service Auction #43 Results B-9

Table 7: New Analog Television Stations Auction #82 Results B-9

**Table 1A: FCC Auctions Summary - Service Design**

+---+--------------+-------+-------+---------------+--------+--------+
| * |              | **N   | **    | **Spectrum    | *      | **S    |
| * |              | umber | Geogr | per license** | *Total | ervice |
| A |              | of    | aphic |               | Sp     | D      |
| u |              | Lic   | Li    |               | ectrum | escrip |
| c |              | enses | cense |               | per    | tion** |
| t |              | (1)** | S     |               | Ma     |        |
| i |              |       | cheme |               | rket** |        |
| o |              |       | (2)** |               |        |        |
| n |              |       |       |               |        |        |
| N |              |       |       |               |        |        |
| u |              |       |       |               |        |        |
| m |              |       |       |               |        |        |
| b |              |       |       |               |        |        |
| e |              |       |       |               |        |        |
| r |              |       |       |               |        |        |
| a |              |       |       |               |        |        |
| n |              |       |       |               |        |        |
| d |              |       |       |               |        |        |
| N |              |       |       |               |        |        |
| a |              |       |       |               |        |        |
| m |              |       |       |               |        |        |
| e |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Nationwide | 11    | Natio | 11 blocks: 5  | 0.7875 | Ad     |
| * | Narrowband   | (3)   | nwide | = 50/50 kHz,  | MHz    | vanced |
| 1 | PCS**        |       |       | 3 = 50/12.5   |        | pagin  |
| * |              |       |       | kHz, 2 = 50   |        | g/data |
| * |              |       |       | kHz           |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | *            | 594   | MSA   | 2 blocks of   | 1 MHz  | Inter  |
| * | *Interactive |       |       | 500 kHz       |        | active |
| 2 | Video and    |       |       |               |        | data   |
| * | Data         |       |       |               |        |        |
| * | Service**    |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Regional   | 30    | Reg   | 6 blocks: 2 = | 0.45   | Ad     |
| * | Narrowband   |       | ional | 50/50 kHz, 4  | MHz    | vanced |
| 3 | PCS**        |       |       | = 50/12.5 kHz |        | pagin  |
| * |              |       |       |               |        | g/data |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **A & B      | 102   | MTA   | 2 blocks of   | 60 MHz | Mobile |
| * | block        | (4)   |       | 30 MHz        |        | voice  |
| 4 | Broadband    |       |       |               |        | and    |
| * | PCS**        |       |       |               |        | data   |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **C block    | 493   | BTA   | 1 block of 30 | 30 MHz | Mobile |
| * | Broadband    |       |       | MHz or 2      |        | voice  |
| 5 | PCS (5)**    |       |       | blocks of 15  |        | and    |
| / |              |       |       | MHz           |        | data   |
| 1 |              |       |       |               |        |        |
| 0 |              |       |       |               |        |        |
| / |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **           | 493   | BTA   | Max of 13     | 78 MHz | Wi     |
| * | Multichannel |       |       | channels of 6 | (6)    | reless |
| 6 | Distribution |       |       | MHz           |        | cable  |
| * | Service**    |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **900 MHz    | 1020  | MTA   | 20 blocks of  | 5 MHz  | Mobile |
| * | Specialized  |       |       | .25 MHz       |        | voice  |
| 7 | Mobile       |       |       |               |        | and    |
| * | Radio**      |       |       |               |        | data   |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Digital    | 1     | Full  | 500 MHz       | 437.5  | Multic |
| * | Broadcast    |       | US    |               | MHz    | hannel |
| 8 | Service      |       | Cov   |               |        | video  |
| * | (7)**        |       | erage |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Digital    | 1     | Pa    | Uses same     | 375    | Multic |
| * | Broadcast    |       | rtial | spectrum as   | MHz    | hannel |
| 9 | Service      |       | US    | full coverage |        | video  |
| * | (7)**        |       | Cov   | license       |        |        |
| * |              |       | erage |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **D, E, & F  | 1479  | BTA   | 3 blocks of   | 30 MHz | Mobile |
| * | block        |       |       | 10 MHz        |        | voice  |
| 1 | Broadband    |       |       |               |        | and    |
| 1 | PCS (8)**    |       |       |               |        | data   |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Cellular   | 14    | MS    | 2 blocks of   | 50 MHz | Mobile |
| * | Unserved**   |       | A/RSA | 25 MHz        |        | voice  |
| 1 |              |       |       |               |        | and    |
| 2 |              |       |       |               |        | data   |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | *            | 981   | MS    | 2 blocks of   | 1 MHz  | Inter  |
| * | *Interactive |       | A/RSA | 500 kHz       |        | active |
| 1 | Video and    |       |       |               |        | data   |
| 3 | Data         |       |       |               |        |        |
| * | Service**    |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Wireless   | 128   | MEA   | 4 blocks: 2 = | 30 MHz | \(9\)  |
| * | Co           |       | /REAG | 10 MHz, 2 = 5 |        |        |
| 1 | mmunications |       |       | MHz           |        |        |
| 4 | Service**    |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Digital    | 2     | Full  | 2 blocks of   | 25 MHz | Multic |
| * | Audio Radio  |       | US    | 12.5 MHz      |        | hannel |
| 1 | Service**    |       | Cov   |               |        | audio  |
| 5 |              |       | erage |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Upper 800  | 525   | EA    | 3 blocks: 1   | **1**0 | Mobile |
| * | MHz          |       |       | MHz, 3 MHz ,  | MHz    | voice  |
| 1 | Specialized  |       |       | and 6 MHz     |        | and    |
| 6 | Mobile       |       |       |               |        | data   |
| * | Radio**      |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Local      | 986   | BTA   | 2 blocks:     | 1300   | Fixed  |
| * | Multipoint   | (10)  |       | 1150 MHz and  | MHz    | voice, |
| 1 | Distribution |       |       | 150 MHz       |        | data   |
| 7 | Service**    |       |       |               |        | and    |
| / |              |       |       |               |        | video  |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **220 MHz**  | 908   | Nati  | 13 blocks: 3  | 1.55   | Voice, |
| * |              |       | onal, | = 100 kHz, 5  | MHz    | data,  |
| 1 |              |       | EAG,  | = 100 kHz, 5  |        | p      |
| 8 |              |       | EA    | = 150 kHz     |        | aging, |
| / |              |       |       |               |        | fixed  |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| 4 |              |       |       |               |        |        |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 4 |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **VHF Public | 42    | Pub.  | 1 block       | 350 to | Fixed  |
| * | Coast**      |       | Coast | between 350   | 500    | and    |
| 2 |              |       | St    | and 500 kHz   | kHz    | mobile |
| 0 |              |       | ation |               |        |        |
| / |              |       | Areas |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| 9 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Location   | 528   | EA    | 3 blocks: 2 = | 14.25  | Mobile |
| * | and          |       |       | 6 MHz, 1 =    | MHz    | tel    |
| 2 | Monitoring   |       |       | 2.25 MHz      |        | emetry |
| 1 | Service**    |       |       |               |        |        |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| 9 |              |       |       |               |        |        |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 4 |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **\"Closed\" | 118   | n/a   | \(11\)        | \(11\) | Bro    |
| * | Broadcast**  |       |       |               |        | adcast |
| 2 |              |       |       |               |        | TV and |
| 5 |              |       |       |               |        | radio  |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| 7 |              |       |       |               |        |        |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 2 |              |       |       |               |        |        |
| 8 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **929 and    | 2,499 | MEA   | 49 blocks of  | 790    | Paging |
| * | 931 MHz      |       |       | 20 kHz: 12 in | kHz    | and    |
| 2 | Paging       |       |       | 929 Band, 37  |        | mes    |
| 6 | Service**    |       |       | in 931 band.  |        | saging |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 4 |              |       |       |               |        |        |
| 0 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **39 GHz**   | 2,450 | EA    | 14 Blocks of  | 1400   | Fixed  |
| * |              |       |       | 100 MHz       | MHz    | (12)   |
| 3 |              |       |       |               |        |        |
| 0 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **700MHz     | 104   | MEA   | 2 Blocks: 1=  | 6 MHz  | \(13\) |
| * | Guard Band** |       |       | 4 MHz, 1 = 2  |        |        |
| 3 |              |       |       | MHz           |        |        |
| 3 |              |       |       |               |        |        |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| 8 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **SMR 800    | 1,050 | EA    | 6 Blocks of   | 7.5    | Mobile |
| * | MHz General  |       |       | 1.25 MHz (14) | MHz    | voice  |
| 3 | Category**   |       |       |               |        | and    |
| 4 |              |       |       |               |        | data   |
| / |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
|   |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| 4 |              |       |       |               |        |        |
| 3 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **PCS C & F  | 422   | BTA   | Up to 4       | 10 to  | Mobile |
| * | Block (5)**  | (15)  |       | blocks of 10  | 40 MHz | voice  |
| 3 |              |       |       | MHz; Up to 2  |        | and    |
| 5 |              |       |       | blocks of 15  |        | data   |
| * |              |       |       | MHz           |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **SMR 800    | 2,800 | EA    | 16 Blocks of  | 4 MHz  | Mobile |
| * | MHz Lower 80 |       |       | .25 MHz       |        | voice  |
| 3 | Channels**   |       |       |               |        | and    |
| 6 |              |       |       |               |        | data   |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Paging**   | 1     | EA    | 36 blocks of  | 2.48   | Paging |
| * |              | 4,000 |       | 20 kHz; 44    | MHz    | and    |
| 4 |              | (16)  |       | blocks of 40  |        | mes    |
| 0 |              |       |       | kHz           |        | saging |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Narrowband | 365   | Nati  | 3 x 50/50     | 1.7625 | Ad     |
| * | PCS**        |       | onal, | kHz; 3 x      | MHz    | vanced |
| 4 |              |       | MTA   | 50/150 kHz; 4 |        | pagin  |
| 1 |              |       |       | x 50/100 kHz; |        | g/data |
| * |              |       |       | 3 x 50 kHz; 1 |        |        |
| * |              |       |       | x 12.5/100    |        |        |
|   |              |       |       | kHz           |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Multiple   | 5,104 | EA    | 28 blocks of  | 800    | Fixed  |
| * | Address      |       |       | 25 kHz; 1     | kHz    | and    |
| 4 | Systems      |       |       | block of 100  |        | Mobile |
| 2 | Spectrum**   |       |       | kHz           |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | *            | 69    | \--   | \--           | \--    | \--    |
| * | *Multi-Radio |       |       |               |        |        |
| 4 | Service**    |       |       |               |        |        |
| 3 | (17)         |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **Blanco     | 1     | n/a   | 1             | 6 MHz  | Bro    |
| * | Texas        |       |       | construction  |        | adcast |
| 8 | Broadcast**  |       |       | permit        |        | TV     |
| 0 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+
| * | **New Analog | 4     | n/a   | 4             | 6 MHz  | Bro    |
| * | Television   |       |       | construction  |        | adcast |
| 8 | Stations**   |       |       | permits       |        | TV     |
| 2 |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
| * |              |       |       |               |        |        |
+---+--------------+-------+-------+---------------+--------+--------+

Source: Federal Communications Commission

\(1\) This is the total number of licenses initially auctioned in each
service. It does not take into account any partitioning and
disaggregation activity. Some of these licenses may not have been
granted.

\(2\) MTAs = Major Trading Areas, BTAs = Basic Trading Areas, MSAs =
Metropolitan Statistical Areas, RSAs = Rural Service Areas, MEAs = Major
Economic Areas, REAGs = Regional Economic Area Groups, EAs = Economic
Areas.

\(3\) Includes one pioneer preference license.

\(4\) Includes three pioneer preference licenses.

\(5\) To date, four auctions have been completed that included C block
PCS licenses (Auctions Nos. 5, 10, 22 amd 35).

\(6\) To be precise, Multipoint Distribution Service ( MDS ) total
spectrum should be 76 MHz because Channel 2 was originally 6 MHz only in
the top 50 markets. In the rest of the markets, it was Channel 2A with 4
MHz. As noted in the MDS Auction Procedures, Terms, and Conditions: \"In
1992, the 2160-2162 MHz frequency was reallocated to emerging
technologies, and thus, any subsequent MDS use of these 2 MHz will be
secondary.\"

\(7\) There is a total of 500 MHz of DBS downlink spectrum available.
The same spectrum can be reused at each of the eight U.S. DBS orbital
slots. The figures in the table are (28/32) x500 and (24/32) x500,
respectively, but they each refer to portions of the same 500 MHz of
spectrum.

\(8\) To date, two auctions have been completed that included DEF block
PCS licenses, the original and one reauction.

\(9\) WCS is permitted to implement a wide range of services, subject to
FCC engineering requirements, including fixed, mobile, radio location,
and broadcasting-satellite (sound) service.

\(10\) Cellularvision, Inc. has been granted a pioneer preference for a
portion of the 1150 MHz New York BTA, of which 850 MHz was subsequently
sold to Winstar Communications, Inc.

\(11\) The "Closed" Broadcast auctions included a number of different
licenses used for broadcast television and radio. The types of licenses
included: AM Broadcast (10 kHz per license), FM Broadcast (200 kHz per
license), FM Translator (200 kHz), TV Broadcast (6 MHz per license), Low
Power TV (6 MHz per license), and TV Translator (6 MHz per license).

\(12\) Mobile communications are subject to the development of
inter-licensee and inter-service interference criteria.

\(13\) The Guard Band Manager is a new class of commercial licensee
engaged solely in the business of leasing spectrum to third parties on a
for-profit basis. The Guard Band Manager may subdivide its spectrum in
any manner it chooses and make it available to system operators, or
directly to end users for fixed or mobile communications. Entities that
employ a cellular system architecture are prohibited from operating in
this band.

\(14\) Additionally, the Commission offered 3 EA licenses in the 800 MHz
Upper Band: one 1 MHz license in Honolulu, HI (EA 172); one 3 MHz
license and one 6 MHz license in Guam and Northern Mariana Islands (EA
173).

\(15\) 170 licenses were available only to entrepreneurs in closed
bidding. 252 licenses were available to all bidders in open bidding.

\(16\) An additional 1,514 upper bands paging licenses that were unsold
in Auction No. 26 were also offered.

\(17\) The 220 MHz, 800 MHz SMR, and LMS spectrum licenses available in
this auction were either unsold from a previous auction or were
defaulted on by a winning bidder in a previous auction. The auction
included 4 Phase II 220 MHz Service licenses; 23, 800 MHz SMR Service
General Category licenses; and 42 LMS licenses.

**Table 1B: FCC Auctions Summary**

**Auction Results**

+---+------------------------+------------+-----+-----+-----+--------+
| * |                        | **Total    | **A | **  | *   | **     |
| * |                        | Winning    | uct | Auc | *\# | Number |
| A |                        | Bids (1)** | ion | tio | Ro  | of     |
| u |                        |            | B   | n** | und | W      |
| c |                        |            | ega |     | s** | inning |
| t |                        |            | n** | **E |     | Bid    |
| i |                        |            |     | nde |     | ders** |
| o |                        |            |     | d** |     |        |
| n |                        |            |     |     |     |        |
| N |                        |            |     |     |     |        |
| u |                        |            |     |     |     |        |
| m |                        |            |     |     |     |        |
| b |                        |            |     |     |     |        |
| e |                        |            |     |     |     |        |
| r |                        |            |     |     |     |        |
| ( |                        |            |     |     |     |        |
| s |                        |            |     |     |     |        |
| ) |                        |            |     |     |     |        |
| a |                        |            |     |     |     |        |
| n |                        |            |     |     |     |        |
| d |                        |            |     |     |     |        |
| N |                        |            |     |     |     |        |
| a |                        |            |     |     |     |        |
| m |                        |            |     |     |     |        |
| e |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+===+========================+============+=====+=====+=====+========+
| * | **Nationwide           | \$6        | 7   | 7   | 47  | 6      |
| * | Narrowband PCS**       | 50,306,674 | /25 | /29 |     |        |
| 1 |                        |            | /94 | /94 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Interactive Video    | \$2        | 7   | 7   | O   | 178    |
| * | and Data Service**     | 13,892,375 | /28 | /29 | ral |        |
| 2 |                        |            | /94 | /94 |     |        |
| * |                        |            |     |     | Out |        |
| * |                        |            |     |     | cry |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Regional Narrowband  | \$3        | 10  | 1   | 105 | 9      |
| * | PCS**                  | 92,706,797 | /26 | 1/8 |     |        |
| 3 |                        |            | /94 | /94 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **A & B block          | \$7,7      | 1   | 3   | 112 | 18     |
| * | Broadband PCS**        | 21,184,171 | 2/5 | /13 |     |        |
| 4 |                        |            | /94 | /95 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **C block Broadband    | \$10,071,  | 12  | 5/6 | 184 | 89     |
| * | PCS (2)**              | 708,841.50 | /18 | /96 |     |        |
| 5 |                        |            | /95 |     | 25  | 7      |
| / |                        | \$904,     |     | 7   |     |        |
| * |                        | 607,466.75 | 7/3 | /16 | 78  | 57     |
| * |                        |            | /96 | /96 |     |        |
|   |                        | \$409,     |     |     |     |        |
| * |                        | 936,425.00 | 3   | 4   |     |        |
| * |                        |            | /23 | /15 |     |        |
| 1 |                        |            | /99 | /99 |     |        |
| 0 |                        |            |     |     |     |        |
| / |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Multichannel         | \$2        | 11  | 3   | 181 | 67     |
| * | Distribution Service** | 16,239,603 | /13 | /28 |     |        |
| 6 |                        |            | /95 | /96 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **900 MHz Specialized  | \$2        | 1   | 4   | 168 | 80     |
| * | Mobile Radio**         | 04,267,144 | 2/5 | /15 |     |        |
| 7 |                        |            | /95 | /96 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Digital Broadcast    | \$6        | 1   | 1   | 19  | 1      |
| * | Service**              | 82,500,000 | /24 | /25 |     |        |
| 8 |                        |            | /96 | /96 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Digital Broadcast    | \$         | 1   | 1   | 25  | 1      |
| * | Service**              | 52,295,000 | /25 | /26 |     |        |
| 9 |                        |            | /96 | /96 |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **D, E, & F block      | \$2,5      | 8   | 1   | 276 | 125    |
| * | Broadband PCS (3)**    | 17,439,565 | /26 | /14 |     |        |
| 1 |                        |            | /96 | /97 | 78  | 6      |
| 1 |                        | \          |     |     |     |        |
| / |                        | $2,904,520 | 3   | 4   |     |        |
| * |                        |            | /23 | /15 |     |        |
| * |                        |            | /99 | /99 |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Cellular Unserved**  | \          | 1   | 1   | 36  | 10     |
| * |                        | $1,842,533 | /13 | /21 |     |        |
| 1 |                        |            | /97 | /97 |     |        |
| 2 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Wireless             | \$         | 4   | 4   | 29  | 17     |
| * | Communications         | 13,638,940 | /15 | /25 |     |        |
| 1 | Service**              |            | /97 | /97 |     |        |
| 4 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Digital Audio Radio  | \$1        | 4/1 | 4/2 | 25  | 2      |
| * | Service**              | 73,234,888 | /97 | /97 |     |        |
| 1 |                        |            |     |     |     |        |
| 5 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Upper 800 MHz        | \$         | 10  | 1   | 235 | 14     |
| * | Specialized Mobile     | 96,232,060 | /28 | 2/8 |     |        |
| 1 | Radio**                |            | /97 | /98 |     |        |
| 6 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Local Multipoint     | \$5        | 2   | 3   | 127 | 104    |
| * | Distribution Service** | 78,663,029 | /18 | /25 |     |        |
| 1 |                        |            | /98 | /98 | 43  | 40     |
| 7 |                        | \$         |     |     |     |        |
| / |                        | 45,064,450 | 4   | 5   |     |        |
| * |                        |            | /27 | /12 |     |        |
| * |                        |            | /99 | /99 |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| 3 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **220 MHz**            | \$         | 9   | 10  | 173 | 44     |
| * |                        | 21,650,301 | /15 | /22 |     |        |
| 1 |                        |            | /98 | /98 | 71  | 16     |
| 8 |                        | \          |     |     |     |        |
| / |                        | $1,924,950 | 6/8 | 6   |     |        |
| * |                        |            | /99 | /30 |     |        |
| * |                        |            |     | /99 |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| 4 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **VHF Public Coast**   | \          | 1   | 12  | 44  | 4      |
| * |                        | $7,459,200 | 2/3 | /14 |     |        |
| 2 |                        |            | /98 | /98 | 34  | 3      |
| 0 |                        | \$225,200  |     |     |     |        |
| / |                        |            | 6/6 | 6   |     |        |
| * |                        |            | /01 | /13 |     |        |
| * |                        |            |     | /01 |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 3 |                        |            |     |     |     |        |
| 9 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Location and         | \          | 2   | 3/5 | 54  | 4      |
| * | Monitoring Service**   | $3,438,294 | /23 | /99 |     |        |
| 2 |                        |            | /99 |     | 34  | 4      |
| 1 |                        | \$919,555  |     | 6   |     |        |
| / |                        |            | 6/6 | /13 |     |        |
| * |                        |            | /01 | /01 |     |        |
| * |                        |            |     |     |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 3 |                        |            |     |     |     |        |
| 9 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **"Closed" Broadcast   | \$         | 9   | 1   | 35  | 91     |
| * | Auction**              | 57,820,350 | /28 | 0/8 |     |        |
| 2 |                        |            | /99 | /99 | 15  | 1      |
| 5 |                        | \$172,250  |     |     |     |        |
| / |                        |            | 1   | 1   | 26  | 2      |
| * |                        | \          | 0/6 | 0/8 |     |        |
| * |                        | $1,210,000 | /99 | /99 |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            | 3   | 3   |     |        |
| * |                        |            | /21 | /24 |     |        |
| 2 |                        |            | /00 | /00 |     |        |
| 7 |                        |            |     |     |     |        |
| / |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 2 |                        |            |     |     |     |        |
| 8 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **929 and 931 MHz      | \          | 2   | 3/2 | 28  | 78     |
| * | Paging Service**       | $4,122,500 | /24 | /00 |     |        |
| 2 |                        |            | /00 |     |     |        |
| 6 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **39 GHz**             | \$4        | 4   | 5/8 | 73  | 29     |
| * |                        | 10,649,085 | /12 | /00 |     |        |
| 3 |                        |            | /00 |     |     |        |
| 0 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **700MHz Guard Band**  | \$5        | 9/6 | 9   | 66  | 9      |
| * |                        | 19,892,575 | /00 | /21 |     |        |
| 3 |                        |            |     | /00 | 38  | 3      |
| 3 |                        | \$         | 2   |     |     |        |
| / |                        | 20,961,500 | /13 | 2   |     |        |
| * |                        |            | /01 | /21 |     |        |
| * |                        |            |     | /01 |     |        |
|   |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| 3 |                        |            |     |     |     |        |
| 8 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **SMR 800 MHz General  | \$3        | 8   | 9/1 | 76  | 14     |
| * | Category**             | 19,451,810 | /16 | /00 |     |        |
| 3 |                        |            | /00 |     |     |        |
| 4 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **PCS C & F Block**    | \$16,8     | 12  | 1   | 101 | 35     |
| * |                        | 57,046,150 | /12 | /26 |     |        |
| 3 |                        |            | /00 | /01 |     |        |
| 5 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **SMR 800 MHz Lower 80 | \$         | 1   | 1   | 151 | 22     |
| * | Channels**             | 28,978,385 | 1/1 | 2/5 |     |        |
| 3 |                        |            | /00 | /00 |     |        |
| 6 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Paging**             | \$         | 10  | 1   | 140 | 182    |
| * |                        | 12,897,127 | /30 | 2/5 |     |        |
| 4 |                        |            | /01 | /01 |     |        |
| 0 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Narrowband PCS**     | \          | 1   | 10  | 48  | 5      |
| * |                        | $8,285,036 | 0/3 | /16 |     |        |
| 4 |                        |            | /01 | /01 |     |        |
| 1 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Multiple Address     | \          | 11  | 11  | 36  | 13     |
| * | Systems Spectrum**     | $1,202,725 | /14 | /27 |     |        |
| 4 |                        |            | /01 | /01 |     |        |
| 2 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Multi-Radio          | \          | 1   | 1   | 31  | 3      |
| * | Service**              | $1,548,225 | /10 | /17 |     |        |
| 4 |                        |            | /02 | /02 |     |        |
| 3 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **Blanco Texas         | \$         | 7   | 7   | 16  | 1      |
| * | Broadcast**            | 18,798,000 | /12 | /14 |     |        |
| 8 |                        |            | /00 | /00 |     |        |
| 0 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+
| * | **New Analog           | \          | 2/  | 2   | 13  | 3      |
| * | Television Stations**  | $5,025,250 | 502 | /13 |     |        |
| 8 |                        |            |     | /02 |     |        |
| 2 |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
| * |                        |            |     |     |     |        |
+---+------------------------+------------+-----+-----+-----+--------+

Source: Federal Communications Commission

Notes:

\(1\) Total Winning Bids includes high bids from the auction (net of any
bidding credits) plus the price paid for any pioneer preference
licenses.

\(2\) C block broadband PCS was auctioned in three auctions. Please note
that because licenses are in more than one auction, simply summing
together the figures for Total Winning Bids, Bid Price, and Number of
Winning Bidders will result in over counting.

\(3\) DEF block broadband PCS was auctioned in two auctions. Please note
that because licenses are in more than one auction, simply summing
together the figures for Total Winning Bids, Bid Price, and Number of
Winning Bidders will result in over counting.

**Table 2: VHS Public Coast and LMS Auction #39 Results**

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

  PCS Partners, L.P.                    32         \$528,840   36,413,087

  Telesaurus Holdings GB, LLC           80         \$347,815   44,713,791

  Maritel, Inc.                         7          \$100,400   1,846,458

  Helen Wong-Armijo                     84         \$58,370    26,701,121

  SMR Systems, Inc.                     3          \$48,750    473,571

  Scott MacIntyre                       3          \$35,750    503,691

  FCR, Inc.                             8          \$24,830    5,712,959
  ------------------------------------- ---------- ----------- ------------

Source: Federal Communications Commission

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

**Table 3: Paging Auction #40 Results**

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

  Marcus Spectrum Holdings, LLC          44         \$2,517,515   624,112,560

  Jeff S Cofsky                          84         \$1,216,618   230,315,004

  Paging Systems, Inc.                   117        \$1,042,540   692,956,816

  Scott MacIntyre                        149        \$497,939     358,701,230

  Jamestown Manufacturing Corporation    698        \$434,100     1,549,982,780

  Schuylkill Mobile Fone, Inc.           221        \$432,840     876,490,423

  anderson communications inc            35         \$416,060     170,524,100

  MOBILE RELAY ASSOCIATES                14         \$377,775     168,910,244

  Atlantic Communications, LLC           5          \$336,750     119,595,040

  T&W Electronics Inc.                   76         \$331,188     213,553,445

  COMMUNICATIONS EQUIPMENT INC           231        \$272,246     223,655,246

  Fisher Wireless Services, Inc.         77         \$219,980     100,153,042

  James T. Hopper                        13         \$176,150     80,350,179

  X.W. LLC                               6          \$163,800     56,768,874

  VICTOR COMMUNICATIONS INC.             120        \$152,438     304,220,305

  Thomas O\'Brien Sr. L.L.C.             1          \$148,200     23,919,008

  Cellplus Networks, LLC                 139        \$145,145     122,757,347

  Colorado CallComm, Inc.                12         \$140,140     36,373,680

  TeleBEEPER of New Mexico, Inc.         261        \$140,056     352,109,285

  Redi-Call Salisbury Communications     111        \$136,487     245,766,788
  Consortium                                                      

  Morris Communications, Inc.            116        \$134,460     154,501,398

  FCCA, LLC                              98         \$124,980     126,828,992

  Futronics Paging, Inc.                 40         \$123,006     67,081,857

  Central Communications Service Company 25         \$117,481     21,464,395

  Mountain Communications and            15         \$116,100     45,467,100
  Electronics, Inc.                                               

  Communications Sales and Service, Inc. 82         \$109,954     122,245,257

  Contact Communications, Inc.           30         \$109,330     82,342,398

  Direct Connect USA, Inc.               14         \$109,005     96,822,040

  SILKE COMMUNICATIONS INC.              85         \$108,615     125,057,456

  Domer Communication, Inc.              17         \$87,893      77,599,322

  AAA Mid-Atlantic                       2          \$85,000      47,838,016

  TELEPHONE & TWO-WAY INC.               56         \$84,500      159,273,287

  Indiana Paging Network, Inc.           63         \$81,405      145,745,954

  Avery Wisdom                           86         \$76,544      163,667,757

  RCC, Inc. d/b/a Radio Comm Company     35         \$76,401      59,324,191

  Golden Arrow Paging, Inc.              22         \$59,000      48,738,861

  A. V. LAUTTAMUS COMMUNICATIONS, INC.   37         \$54,119      52,422,195

  Ameritech Mobile Services, Inc.        58         \$52,840      164,858,305

  Arthur Nathan Sherman                  43         \$52,410      61,790,669

  Omnicall Corp.                         21         \$50,740      44,112,873

  Cook Telecom, Inc.                     84         \$50,190      187,170,529

  WILLIAM WAYNE DBA MR. RADIO            9          \$48,035      8,493,318

  Ray\'s Mobile Communications, Inc.     5          \$46,150      6,393,610

  AAT Paging Corporation II              4          \$45,500      33,129,176

  Western Paging, LLC                    44         \$43,725      140,724,540

  Lemar D. Van Heuveln                   54         \$42,796      20,575,220

  Jim Doering DBA J Doering              22         \$41,990      138,165,858
  Communicatins                                                   

  Minnesota Mobile Telehone Company      34         \$41,600      64,839,085

  Fresno Moible Radio, Inc.              31         \$40,725      70,558,890

  Saia Communications Inc.               20         \$39,754      30,235,255

  Azle Communications Solutions, LLC     6          \$39,455      37,084,698

  Alpha Wireless Communications Co.      56         \$39,080      58,705,114

  FastAds, Inc.                          49         \$37,089      49,276,462

  JSM Net Link LLC                       38         \$35,880      52,754,331

  Baycom Inc.                            36         \$32,865      29,536,226

  Tri County Communications, Ltd.        51         \$32,445      30,769,213

  NextBus Informations Systems. Inc      30         \$30,355      264,085,097

  JPJ Electronic Communications Inc Rene 36         \$29,820      53,783,143
  Matthew Cor                                                     

  Mobile Radio Communications, Inc.      22         \$29,460      24,792,425

  Automobile Club of Southern California 19         \$28,280      18,575,633

  Columbia Communications, Inc.          7          \$28,080      37,938,997

  ComProducts, Inc. d/b/a B&C            8          \$25,285      16,804,904
  Communications                                                  

  Mobilfone Service Inc                  5          \$23,720      11,210,869

  Joshua F.A. McCormick                  8          \$23,140      42,807,970

  Superior Technologies, Inc.            10         \$23,080      3,824,992

  Edward V Krom                          8          \$22,540      59,637,064

  CENTRAL VERMONT COMMUNICATIONS, INC.   18         \$22,126      48,086,643

  ROBERT J FETTERMAN                     17         \$21,825      54,470,474

  Communication Specialists Company of   39         \$21,541      38,843,438
  Wilmington, L                                                   

  METROCALL USA INC                      31         \$20,260      54,331,591

  BADGER SPECTRUM LTD                    38         \$19,955      101,417,799

  California State Automobile            4          \$19,600      26,034,889
  Association                                                     

  Range Corporation                      39         \$19,409      21,213,191

  Teton Communincations                  54         \$19,279      11,944,602

  Midwest Management, Inc.               59         \$19,175      15,249,549

  Kathleen Janssen                       12         \$19,140      15,465,793

  UHF-DE, LLC                            25         \$18,590      12,180,300

  FM Communications, Inc.                6          \$17,199      9,034,632

  AQUIS WIRELESS COMMUNICATIONS, INC.    6          \$17,000      41,416,102

  Regional Transit Service, Inc.         3          \$17,000      4,373,538

  WARNER COMMUNICATIONS CORPORATION      28         \$16,848      95,278,904

  Arthur R. Patrick                      40         \$16,770      38,129,074

  iDigi Networks, LLC                    12         \$16,590      41,949,528

  Alpha Communications Sites, Inc.       18         \$15,900      29,447,964

  Joplin Beepers Inc                     14         \$15,615      14,647,350

  Lancaster Radio Paging, Inc.           2          \$15,140      7,942,319

  Page Plus Incorporated                 30         \$15,000      46,941,240

  Lubbock Radio Paging Service, Inc.     21         \$14,520      7,560,150

  Clifford E. Bade                       14         \$14,209      63,905,324

  Teletouch Licenses, Inc.               15         \$14,000      12,530,895

  Two-Way Communications, Inc.           5          \$13,845      5,463,330

  T&K Communications Systems, Inc.       16         \$13,819      25,636,757

  MULTIPAGE, INC.                        25         \$13,300      27,291,114

  Electronic Engineering Co.             18         \$13,140      35,411,031

  BAKER\'S ELECTRONICS & COMMUNICATIONS, 37         \$12,675      56,165,736
  INC.                                                            

  Robert R Rule                          25         \$12,610      22,209,278

  TEXAPAGE NE INC.                       4          \$12,025      24,723,132

  Myrtle Beach Communications, Inc.      22         \$11,570      12,956,566

  ComServ Services, LLC                  20         \$11,115      33,756,340

  State of South Dakota, Bureau of       16         \$11,020      4,009,212
  Information & Tel                                               

  Davis Electronics Company Inc          22         \$11,000      31,927,080

  Mid-Rivers Telephone Cooperative, Inc. 22         \$11,000      6,273,061

  L & L Services, Inc. d/b/a Metro       21         \$11,000      16,918,724
  Communications                                                  

  Centre Communications                  28         \$10,322      33,616,491

  Richard L Oberdorfer                   5          \$9,620       5,013,956

  Select Path Holding, Inc.              10         \$9,525       14,759,354

  CAPITOL RADIOTELEPHONE COMPANY, INC.   12         \$9,334       16,214,547

  Mobile Communication Service, Inc.     20         \$9,120       11,556,675

  Buttner Holdings, LLC                  21         \$8,775       35,812,643

  Ozark Paging LLC                       5          \$8,580       6,895,436

  Michael A Phillips                     10         \$8,554       12,596,360

  UNITED TELEPHONE MUTUAL AID            16         \$8,000       2,855,048
  CORPORATION                                                     

  West Wisconsin Telcom Cooperative Inc  6          \$7,170       5,701,861

  TeleMaxx Communications LLC            3          \$6,630       10,990,738

  Industrial Communications              12         \$6,565       19,631,976

  WCS Communications Inc dba Western     11         \$6,435       9,844,513
  Communications                                                  

  Mobile Phone of Texas, Inc.            5          \$6,225       14,339,151

  Daksoft, Inc dba Mayer Radio           12         \$6,000       3,491,262

  Communications Specialists, Inc.       18         \$5,850       15,219,742

  TRIANGLE COMMUNICATIONS INC.           10         \$5,775       16,153,991

  wharton telecom holdings, inc          5          \$5,100       26,228,739

  Mobile Telephone & Paging Inc.         8          \$5,060       8,865,832

  Bob Jacobson d/b/a Wavecomm            6          \$5,005       17,163,540

  Virginia Channels, JV                  10         \$5,000       12,476,270

  RAM Technologies Inc                   4          \$5,000       4,879,317

  M. E. Parkinson                        14         \$4,836       4,999,288

  KARL A RINKER                          9          \$4,667       13,367,176

  Moraine Radio                          6          \$4,498       12,717,342

  John L Crump                           11         \$4,290       31,793,449

  Business Service Center, Inc.          4          \$4,275       2,191,808

  Acadian Ambulance Service, Inc.        8          \$4,000       5,920,678

  FONES WEST DIGITAL SYSTEMS, INC.       5          \$3,965       9,088,441

  Afton Communications Corporation       10         \$3,750       10,383,010

  NEP, LLC                               7          \$3,700       11,616,403

  Pro-Com Inc.                           6          \$3,653       14,913,325

  Com-Nav, Inc. d/b/a Radiotelephone of  7          \$3,510       3,731,945
  Maine                                                           

  Western Communications, Inc.           6          \$3,510       1,525,570

  Chicago Communication Service, Inc.    2          \$3,400       24,991,020

  Space Data Spectrum Holdings, LLC      3          \$3,300       10,376,805

  Spectrum Communications, Inc.          10         \$3,250       5,457,470

  Gabriel Wireless LLC                   2          \$3,250       10,051,212

  BEEPER NETWORK INC                     8          \$3,185       13,899,057

  Metamora Telephone Company             7          \$3,150       4,055,807

  CITY PAGE & CELLULAR SERVICES, INC.    2          \$3,120       9,564,000
  DBA CITY BEEPE                                                  

  Hub Communications, Inc.               9          \$2,990       9,661,811

  SEMA-PHOON, INC. d/b/a R.A.            7          \$2,964       4,154,428
  Communications                                                  

  Bobier Electronics, Inc.               9          \$2,925       10,764,387

  Communications Systems, Inc.           2          \$2,860       2,956,766

  Joseph B McNeal                        6          \$2,405       4,485,684

  PROGRESSIVE COMMUNICATIONS SERVICES,   7          \$2,275       5,823,297
  INC.                                                            

  Robert F. Ryder d/b/a Radio Paging     7          \$2,275       1,898,610
  Service                                                         

  Starpage Inc                           6          \$2,275       7,474,231

  McLeodUSA Telecommunications Services, 4          \$2,100       7,605,185
  Inc.                                                            

  Paging Source of Florida, Inc.         2          \$2,100       7,374,875

  Page-All, LLC                          1          \$2,000       3,945,443

  Answer Fort Smith, Inc.                3          \$1,950       5,264,463

  Great Eastern Communications Co. Inc.  1          \$1,885       7,454,633

  Christine M. Busby                     2          \$1,690       18,635,894

  Pineland Telephone Cooperative, Inc.   3          \$1,500       1,773,768

  VENTURES IN PAGING, LLC                3          \$1,500       2,955,208

  Professional Answering Service, Inc.   3          \$1,300       5,861,648

  General Tel Courier                    3          \$1,170       3,324,687

  MARK A. APSLEY                         2          \$1,105       2,852,700

  Allcom Communications, Inc.            2          \$1,000       572,068

  AreaWide Communications Inc.           2          \$1,000       2,835,801

  Leonard R. Putnam d/b/a Cascade        2          \$1,000       2,617,632
  Telephone Communic                                              

  South Shore Radio, Inc.                3          \$975         4,313,682

  P & R Comunnications Service, Inc.     1          \$750         4,325,459

  Atlas Mobilfone Inc                    2          \$715         946,147

  Courtesy Communications, Inc.          2          \$650         1,383,612

  D & K Business Pagers                  1          \$650         1,934,632

  DATAPAGE, INC.                         1          \$650         8,672,944

  Westside Paging Inc                    1          \$650         3,445,064

  Holsum Bakers, Inc. d/b/a Caprock      1          \$500         382,517
  Communications                                                  

  Cactus Communications Inc              1          \$390         1,741,991

  Pattersonville Telephone Company       1          \$375         1,147,154

  St. Louis Electronics Communications   1          \$375         3,402,818
  Corporation                                                     

  Communications Management Co. of       1          \$325         825,644
  Indiana                                                         

  Mobile Radio Communications Service,   1          \$325         150,155
  Inc.                                                            

  Mobilephone of Humboldt, Inc.          1          \$325         689,659

  SCP COMMUNICATIONS, LLC                1          \$325         864,201

  Western Communication Services, Inc.   1          \$325         144,847
  -------------------------------------- ---------- ------------- ---------------

Source: Federal Communications Commission

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

**Table 4: Narrowband PCS Auction #41 Results**

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

  Space Data Spectrum Holdings, LLC      204       \$6,343,511   2,795,954,831.00

  Allegheny Communications, Inc.         101       \$1,767,825   755,996,003.00

  Scott C. MacIntyre                     6         \$75,300      30,417,369.00

  AQUIS WIRELESS COMMUNICATIONS, INC.    5         \$64,400      56,415,142.00

  Paging Systems, Inc.                   1         \$34,000      19,145,232.00
  -------------------------------------- --------- ------------- ------------------

Source: Federal Communications Commission

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

**Table 5: Multiple Address Systems Spectrum Auction #42 Results**

  ----------------------------------------------------------------------------
  Bidder Name                            Total     Net High    POPs
                                         High Bids Bids (1)    
  -------------------------------------- --------- ----------- ---------------
  MilkyWay Communications, LLC           476       \$757,500   1,510,789,444

  Microwave Data Systems Inc.            168       \$181,000   182,265,599

  Paging Systems, Inc.                   38        \$113,100   312,924,284

  TeleBEEPER of New Mexico, Inc.         58        \$38,415    95,673,811

  Wisconsin Electric Power Company       33        \$33,000    48,559,020

  TELEPHONE & TWO-WAY INC.               40        \$26,260    138,076,054

  Southern Communications Services Inc   14        \$14,000    50,185,120
  d/b/a Souther                                                

  Phillips Communications, Inc.          10        \$10,100    4,230,958

  Kirkland Associates, Inc.              15        \$9,750     41,956,089

  IBG, Inc.                              8         \$6,500     73,559,336

  Fiberlessnet, Inc.                     10        \$6,500     27,601,346

  Chicago Communication Service, Inc.    4         \$4,000     37,271,788

  Petra Ramasastry                       4         \$2,600     25,526,022
  ----------------------------------------------------------------------------

Source: Federal Communications Commission

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

**Table 6: Multi-Radio Service Auction #43 Results**

  ---------------------------------------------------------------------------
  Bidder Name                            Total     Net High Bids POPs
                                         High Bids (1)           
  -------------------------------------- --------- ------------- ------------
  NEXTEL SPECTRUM ACQUISITION CORP.      18        \$1,282,000   15,984,384

  AerWav, Inc.                           4         \$182,700     99,250,444

  TeleBEEPER of NEW MEXICO, INC          5         \$83,525      3,334,545
  ---------------------------------------------------------------------------

Source: Federal Communications Commission

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

**Table 7: New Analog Television Stations Auction #82 Results**

  --------------------------------------------------------------------------
  Bidder Name                            Total     Net High Bids POPs
                                         High Bids (1)           
  -------------------------------------- --------- ------------- -----------
  Roberts Broadcasting USA, LLC          2         \$3,326,250   N/a

  Venture Technologies Group, LLC        1         \$1,323,000   N/a

  Equity Broadcasting Corporation        1         \$376,000     N/a
  --------------------------------------------------------------------------

Source: Federal Communications Commission

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

**APPENDIX C:**

**MOBILE TELEPHONY**

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

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

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

Table 3: Economic Area Penetration Rates C-4

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

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

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

Table 7: Mobile Telephone Digital Coverage C-10

Table 8: Change in CPI C-10

Table 9: Average Revenue Per Minute C-11

Table 10: Rural vs. Urban Pricing C-11

Table 11: First Cellular of Illinois Per Minute Pricing 1995-2001 C-12

Table 12: Foreign Holdings of U.S. Mobile Telephone Operators C-13

Table 13: International Comparisons of Mobile Pricing C-15

**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

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

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

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**

+------------+-------+------+-------+-------+-------+-------+-------+
| **Mobile   |       |      |       |       |       |       |       |
| Wireless   |       |      |       |       |       |       |       |
| Telephone  |       |      |       |       |       |       |       |
| S          |       |      |       |       |       |       |       |
| ubscribers |       |      |       |       |       |       |       |
| (as of     |       |      |       |       |       |       |       |
| June 30,   |       |      |       |       |       |       |       |
| 2001) 1/** |       |      |       |       |       |       |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| **State**  | **Jun | *    | **S   | **Sub | **S   | **S   | **Pe  |
|            | 2001  | *Jun | ubscr | scrib | ubscr | ubscr | rcent |
|            | Repo  | 2001 | ibers | ers** | ibers | ibers | C     |
|            | rting | Per  | Dec   |       | Dec   | Jun   | hange |
|            | Car   | cent | 1     | **Jun | 2000  | 2     | Jun   |
|            | riers | Re   | 999** | 2     | 3/**  | 001** | 00 -  |
|            | 1/**  | sold |       | 000** |       |       | Jun   |
|            |       | 2/** |       |       |       |       | 01**  |
+------------+-------+------+-------+-------+-------+-------+-------+
| Alabama    | 12    | 1%   | 1,08  | 1,25  | 1,38  | 1,93  | 54%   |
|            |       |      | 0,410 | 3,084 | 6,294 | 0,631 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Alaska     | 5     | 10%  | 16    | 16    | \*    | 21    | 29%   |
|            |       |      | 5,221 | 9,892 |       | 8,424 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Arizona    | 13    | 3%   | 1,12  | 1,62  | 1,85  | 2,01  | 24%   |
|            |       |      | 5,321 | 4,668 | 5,115 | 8,410 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Arkansas   | 6     | 2%   | 71    | 71    | 74    | 89    | 25%   |
|            |       |      | 9,919 | 5,467 | 3,928 | 1,275 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| California | 12    | 5%   | 8,54  | 12,28 | 12,71 | 14,18 | 15%   |
|            |       |      | 4,941 | 3,369 | 0,520 | 4,625 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Colorado   | 9     | 3%   | 1,55  | 1,65  | 1,85  | 1,98  | 20%   |
|            |       |      | 2,718 | 4,989 | 6,075 | 3,405 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| C          | 6     | 9%   | 1,07  | 1,13  | 1,27  | 1,41  | 25%   |
| onnecticut |       |      | 7,089 | 6,618 | 7,123 | 8,367 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Delaware   | 5     | 6%   | 27    | 27    | 37    | 38    | 41%   |
|            |       |      | 0,848 | 5,219 | 1,014 | 9,284 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| District   | 6     | 9%   | 91    | 4/    | 92    | 98    | N.M.  |
| of         |       |      | 0,116 |       | 8,962 | 7,323 |       |
| Columbia   |       |      |       |       |       |       |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Florida    | 9     | 7%   | 5,15  | 4,98  | 6,36  | 7,53  | 51%   |
|            |       |      | 8,079 | 3,478 | 9,985 | 6,670 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Georgia    | 14    | 4%   | 2,53  | 2,68  | 2,75  | 4,07  | 52%   |
|            |       |      | 8,983 | 7,238 | 4,784 | 6,119 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Guam       | \*    | \*   | \*    | \*    | 0     | \*    | \*    |
+------------+-------+------+-------+-------+-------+-------+-------+
| Hawaii     | 6     | 2%   | 28    | 45    | 52    | 54    | 20%   |
|            |       |      | 8,425 | 4,364 | 4,291 | 3,283 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Idaho      | 7     | 3%   | 27    | 29    | 34    | 39    | 35%   |
|            |       |      | 1,436 | 6,066 | 4,564 | 8,781 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Illinois   | 10    | 9%   | 3,92  | 4,30  | 5,14  | 5,62  | 30%   |
|            |       |      | 2,482 | 9,660 | 3,767 | 1,044 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Indiana    | 9     | 5%   | 1,31  | 1,71  | 1,71  | 1,78  | 4%    |
|            |       |      | 8,975 | 7,378 | 5,074 | 1,247 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Iowa       | 8     | 7%   | 77    | 97    | 83    | 86    | -12%  |
|            |       |      | 4,773 | 5,629 | 2,106 | 1,382 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Kansas     | 10    | 3%   | 66    | 72    | 80    | 90    | 24%   |
|            |       |      | 9,472 | 4,024 | 1,293 | 1,225 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Kentucky   | 9     | 1%   | 91    | 99    | 1,02  | 1,17  | 18%   |
|            |       |      | 1,700 | 9,544 | 6,334 | 6,756 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Louisiana  | 12    | 3%   | 1,22  | 1,29  | 1,30  | 1,67  | 30%   |
|            |       |      | 7,106 | 4,693 | 6,457 | 7,292 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Maine      | 5     | 3%   | 18    | 28    | 35    | 39    | 41%   |
|            |       |      | 7,003 | 3,640 | 9,786 | 9,616 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Maryland   | 8     | 4%   | 1,47  | 4/    | 1,98  | 2,13  | N.M.  |
|            |       |      | 3,494 |       | 2,477 | 4,125 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Mas        | 6     | 4%   | 1,89  | 2,22  | 2,64  | 2,75  | 24%   |
| sachusetts |       |      | 2,014 | 8,169 | 9,130 | 3,685 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Michigan   | 10    | 9%   | 3,51  | 3,42  | 3,55  | 4,07  | 19%   |
|            |       |      | 2,813 | 3,535 | 1,719 | 1,091 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Minnesota  | 12    | 7%   | 1,55  | 1,59  | 1,85  | 2,01  | 26%   |
|            |       |      | 0,411 | 5,560 | 1,430 | 4,317 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| M          | 9     | 4%   | 67    | 50    | 78    | 99    | 95%   |
| ississippi |       |      | 3,355 | 9,038 | 6,577 | 3,781 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Missouri   | 9     | 4%   | 1,85  | 1,84  | 1,76  | 1,93  | 5%    |
|            |       |      | 5,452 | 8,775 | 7,411 | 7,684 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Montana    | \*    | \*   | \*    | \*    | \*    | \*    | \*    |
+------------+-------+------+-------+-------+-------+-------+-------+
| Nebraska   | 5     | 2%   | 57    | 60    | 65    | 71    | 19%   |
|            |       |      | 6,296 | 0,885 | 9,380 | 2,685 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Nevada     | 6     | 3%   | 75    | 82    | 68    | 76    | -7%   |
|            |       |      | 0,335 | 5,163 | 4,752 | 6,581 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| New        | 7     | 13%  | 28    | 30    | 38    | 44    | 44%   |
| Hampshire  |       |      | 0,508 | 9,263 | 7,264 | 5,181 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| New Jersey | 6     | 1%   | 2,28  | 2,75  | 3,57  | 3,89  | 42%   |
|            |       |      | 9,181 | 0,024 | 5,130 | 6,778 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| New Mexico | 8     | 8%   | 36    | 39    | 44    | 61    | 57%   |
|            |       |      | 3,827 | 5,111 | 3,343 | 9,582 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| New York   | 9     | 11%  | 4,83  | 5,01  | 5,91  | 6,74  | 35%   |
|            |       |      | 3,816 | 6,524 | 8,136 | 9,096 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| North      | 11    | 4%   | 2,53  | 2,73  | 3,10  | 3,37  | 24%   |
| Carolina   |       |      | 6,068 | 0,178 | 5,811 | 7,331 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| North      | \*    | \*   | \*    | \*    | \*    | \*    | \*    |
| Dakota     |       |      |       |       |       |       |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Ohio       | 12    | 6%   | 3,23  | 3,27  | 4,15  | 4,25  | 30%   |
|            |       |      | 7,786 | 8,960 | 0,498 | 5,934 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Oklahoma   | 12    | 3%   | 82    | 97    | 1,12  | 1,20  | 23%   |
|            |       |      | 6,637 | 9,513 | 4,214 | 0,234 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Oregon     | 8     | 3%   | 91    | 1,08  | 1,20  | 1,26  | 17%   |
|            |       |      | 4,848 | 2,425 | 1,207 | 8,909 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Pe         | 12    | 5%   | 2,76  | 3,85  | 4,12  | 4,37  | 14%   |
| nnsylvania |       |      | 7,474 | 0,372 | 9,186 | 8,216 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Puerto     | 5     | 21%  | \*    | 1,09  | 75    | 1,37  | 26%   |
| Rico       |       |      |       | 0,005 | 7,613 | 4,747 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Rhode      | 6     | 5%   | 27    | 31    | 35    | 40    | 28%   |
| Island     |       |      | 9,304 | 3,550 | 5,889 | 1,805 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| South      | 8     | 9%   | 1,13  | 1,23  | 1,39  | 1,50  | 22%   |
| Carolina   |       |      | 7,232 | 6,338 | 2,586 | 2,345 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| South      | \*    | \*   | \*    | \*    | \*    | \*    | \*    |
| Dakota     |       |      |       |       |       |       |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Tennessee  | 11    | 1%   | 1,52  | 1,87  | 1,98  | 2,25  | 20%   |
|            |       |      | 9,054 | 6,444 | 5,851 | 1,208 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Texas      | 16    | 5%   | 5,79  | 6,70  | 7,54  | 8,29  | 24%   |
|            |       |      | 2,453 | 5,423 | 8,537 | 4,338 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Utah       | 10    | 3%   | 64    | 69    | 75    | 83    | 20%   |
|            |       |      | 3,824 | 2,006 | 0,244 | 3,492 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Vermont    | \*    | \*   | \*    | \*    | \*    | \*    | \*    |
+------------+-------+------+-------+-------+-------+-------+-------+
| Virgin     | \*    | \*   | \*    | 0     | 0     | \*    | \*    |
| Islands    |       |      |       |       |       |       |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Virginia   | 11    | 4%   | 1,86  | 4/    | 2,45  | 2,76  | N.M.  |
|            |       |      | 0,262 |       | 0,289 | 7,247 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Washington | 9     | 4%   | 1,87  | 2,14  | 2,28  | 2,49  | 16%   |
|            |       |      | 3,475 | 4,767 | 6,082 | 3,214 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| West       | 9     | 6%   | 24    | 34    | 39    | 45    | 30%   |
| Virginia   |       |      | 1,265 | 7,916 | 2,384 | 2,036 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Wisconsin  | 10    | 7%   | 1,52  | 1,34  | 1,69  | 2,00  | 50%   |
|            |       |      | 5,818 | 2,908 | 8,520 | 8,679 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Wyoming    | 4     | 3%   | 12    | \*    | \*    | 17    | \*    |
|            |       |      | 7,634 |       |       | 3,939 |       |
+------------+-------+------+-------+-------+-------+-------+-------+
| Nationwide | 72    | 5%   | 79,69 | 90,64 | 1     | 1     | 26%   |
|            |       |      | 6,083 | 3,058 | 01,04 | 14,02 |       |
|            |       |      |       |       | 3,219 | 8,928 |       |
+------------+-------+------+-------+-------+-------+-------+-------+

N.M. - Not meaningful.

\* 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/ Data for December 2000 have been revised.

4/ At the end of June 2000, the District of Columbia, Maryland, and
Virginia had a total of 4.8 million subscribers. The state-by-state
totals for these individual states were inconsistently reported at the
end of June 2000 compared to the other filing periods.

Source: *Local Telephone Competition: Status as of June 30, 2001*,
Federal Communications Commission, Feb. 2002 (Table 10: Mobile Wireless
Telephone Subscribers).

**Table 3: Economic Area Penetration Rates**

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

  34       Tampa-St. Petersburg-Clearwater, FL          920,170           2,395,997    38%           938.0

  10       New York-No. New Jer.-Long Island,           12,184,293        25,712,577   47%           924.2
           NY-NJ-CT-PA-MA-VT                                                                         

  12       Philadelphia-Wilmington-Atl. City,           3,542,947         7,309,792    48%           802.1
           PA-NJ-DE-MD                                                                               

  161      San Diego, CA                                1,396,336         2,813,833    50%           669.2

  64       Chicago-Gary-Kenosha, IL-IN-WI               5,051,676         10,328,854   49%           561.2

  31       Miami-Fort Lauderdale, FL                    2,971,444         5,602,222    53%           532.7

  3        Boston-Worcester-Lawrence-Lowell-Brockton,   3,735,291         7,954,554    47%           437.4
           MA-NH-RI-VT                                                                               

  55       Cleveland-Akron, OH-PA                       2,022,255         4,692,460    43%           432.9

  13       Washington-Baltimore, DC-MD-VA-WV-PA         4,441,033         8,403,130    53%           413.8

  63       Milwaukee-Racine, WI                         951,740           2,255,183    42%           377.7

  57       Detroit-Ann Arbor-Flint, MI                  3,559,074         6,963,637    51%           368.9

  50       Dayton-Springfield, OH                       515,403           1,133,004    45%           319.5

  20       Norfolk-Virginia Beach-Newport News, VA-NC   805,041           1,722,764    47%           312.3

  49       Cincinnati-Hamilton, OH-KY-IN                968,489           2,184,860    44%           297.7

  11       Harrisburg-Lebanon-Carlisle, PA              436,066           1,125,265    39%           295.6

  30       Orlando, FL                                  1,653,770         3,642,540    45%           295.0

  33       Sarasota-Bradenton, FL                       237,085           763,795      31%           288.9

  160      Los Angeles-Riverside-Orange County, CA-AZ   8,196,656         18,003,420   46%           288.8

  53       Pittsburgh, PA-WV                            1,228,944         2,971,829    41%           286.9

  163      San Francisco-Oakland-San Jose, CA           4,505,279         9,111,806    49%           275.0

  40       Atlanta, GA-AL-NC                            3,101,196         5,471,412    57%           250.2

  32       Fort Myers-Cape Coral, FL                    265,565           692,265      38%           244.7

  23       Charlotte-Gastonia-Rock Hill, NC-SC          1,036,091         2,031,519    51%           244.3

  133      McAllen-Edinburg-Mission, TX                 285,964           978,369      29%           227.8

  83       New Orleans, LA-MS                           815,144           1,725,338    47%           215.4

  8        Buffalo-Niagara Falls, NY-PA                 481,033           1,507,759    32%           214.4

  62       Grand Rapids-Muskegon-Holland, MI            745,452           1,881,991    40%           210.9

  170      Seattle-Tacoma-Bremerton, WA                 2,076,766         4,135,291    50%           196.3

  164      Sacramento-Yolo, CA                          1,089,950         2,311,567    47%           192.9

  51       Columbus, OH                                 1,043,728         2,349,060    44%           191.5

  19       Raleigh-Durham-Chapel Hill, NC               921,246           1,831,510    50%           191.3

  18       Greensboro-Winston-Salem-High Point, NC-VA   846,321           1,854,853    46%           190.8

  65       Elkhart-Goshen, IN-MI                        302,732           936,245      32%           188.7

  172      Honolulu, HI                                 678,441           1,211,537    56%           188.6

  41       Greenville-Spartanburg-Anderson, SC-NC       547,336           1,248,824    44%           188.5

  70       Louisville, KY-IN                            624,418           1,416,914    44%           183.1

  131      Houston-Galveston-Brazoria, TX               2,821,174         5,632,853    50%           175.0

  67       Indianapolis, IN-IL                          1,263,358         3,066,469    41%           172.4

  44       Knoxville, TN                                433,719           983,329      44%           172.0

  7        Rochester, NY-PA                             440,545           1,493,518    30%           170.4

  81       Pensacola, FL                                236,009           623,252      38%           169.7

  22       Fayetteville, NC                             218,585           528,224      41%           165.7

  56       Toledo, OH                                   528,791           1,294,395    41%           165.6

  26       Charleston-North Charleston, SC              283,141           587,297      48%           161.0

  66       Fort Wayne, IN                               237,456           725,847      33%           159.8

  130      Austin-San Marcos, TX                        708,185           1,349,267    52%           158.5

  60       Appleton-Oshkosh-Neenah, WI                  169,589           433,250      39%           156.1

  43       Chattanooga, TN-GA                           301,360           720,375      42%           148.9

  84       Baton Rouge, LA-MS                           337,171           739,673      46%           146.6

  82       Biloxi-Gulfport-Pascagoula, MS               180,317           396,754      45%           146.5

  45       Johnson City-Kingsport-Bristol, TN-VA        218,673           576,081      38%           146.2

  78       Birmingham, AL                               774,217           1,578,903    49%           139.3

  5        Albany-Schenectady-Troy, NY                  398,011           1,171,669    34%           139.0

  46       Hickory-Morganton, NC-TN                     176,375           519,208      34%           133.2

  14       Salisbury, MD-DE-VA                          116,455           363,970      32%           131.1

  24       Columbia, SC                                 424,353           932,115      46%           130.9

  42       Asheville, NC                                192,505           444,594      43%           129.6

  96       St. Louis, MO-IL                             1,602,321         3,558,651    45%           129.0

  15       Richmond-Petersburg, VA                      690,032           1,446,123    48%           127.1

  52       Wheeling, WV-OH                              99,604            327,645      30%           125.8

  74       Huntsville, AL-TN                            443,660           997,824      44%           123.5

  127      Dallas-Fort Worth, TX-AR-OK                  3,492,819         7,645,530    46%           121.6

  54       Erie, PA                                     146,901           519,348      28%           117.9

  29       Jacksonville, FL-GA                          948,062           1,885,190    50%           117.4

  102      Davenport-Moline-Rock Island, IA-IL          222,511           558,913      40%           110.3

  25       Wilmington, NC-SC                            387,544           878,267      44%           109.8

  6        Syracuse, NY-PA                              559,353           1,902,640    29%           107.9

  85       Lafayette, LA                                252,426           601,654      42%           107.1

  71       Nashville, TN-KY                             1,073,972         2,444,643    44%           106.7

  73       Memphis, TN-AR-MS-KY                         844,860           1,882,332    45%           106.0

  2        Portland, ME                                 263,474           748,817      35%           104.8

  103      Cedar Rapids, IA                             182,916           384,577      48%           101.8

  162      Fresno, CA                                   466,213           1,419,998    33%           99.2

  17       Roanoke, VA-NC-WV                            342,689           826,284      41%           98.7

  21       Greenville, NC                               333,540           823,517      41%           96.7

  28       Savannah, GA-SC                              309,941           668,214      46%           95.8

  158      Phoenix-Mesa, AZ-NM                          1,660,151         3,407,197    49%           94.1

  9        State College, PA                            239,859           809,979      30%           92.8

  101      Peoria-Pekin, IL                             208,753           528,671      39%           92.4

  87       Beaumont-Port Arthur, TX                     186,769           456,637      41%           92.3

  27       Augusta-Aiken, GA-SC                         261,341           604,799      43%           91.4

  92       Fayetteville-Springdale-Rogers, AR-MO-OK     153,503           405,160      38%           90.3

  99       Kansas City, MO-KS                           1,337,213         2,469,340    54%           89.7

  107      Minneapolis-St. Paul, MN-WI-IA               2,029,379         4,498,286    45%           87.4

  48       Charleston, WV-KY-OH                         381,295           1,199,373    32%           86.0

  39       Columbus, GA-AL                              245,678           496,538      49%           85.6

  134      San Antonio, TX                              875,662           2,141,060    41%           83.6

  47       Lexington, KY-TN-VA-WV                       564,282           1,851,367    30%           80.9

  167      Portland-Salem, OR-WA                        1,274,658         2,883,737    44%           77.1

  69       Evansville-Henderson, IN-KY-IL               329,160           854,714      39%           76.4

  80       Mobile, AL                                   256,953           676,258      38%           76.3

  93       Joplin, MO-KS-OK                             92,188            263,904      35%           75.1

  124      Tulsa, OK-KS                                 612,351           1,384,426    44%           74.5

  72       Paducah, KY-IL                               42,471            226,586      19%           74.1

  68       Champaign-Urbana, IL                         231,754           630,898      37%           73.8

  104      Madison, WI-IL-IA                            352,588           933,823      38%           72.9

  79       Montgomery, AL                               249,504           481,137      52%           67.7

  35       Tallahassee, FL-GA                           326,031           720,434      45%           65.9

  125      Oklahoma City, OK                            682,522           1,698,197    40%           65.8

  37       Albany, GA                                   174,001           468,178      37%           63.8

  38       Macon, GA                                    303,464           768,701      39%           63.5

  118      Omaha, NE-IA-MO                              460,250           1,044,156    44%           62.7

  4        Burlington, VT-NY                            145,021           605,393      24%           61.0

  88       Shreveport-Bossier City, LA-AR               213,734           573,616      37%           60.3

  159      Tucson, AZ                                   454,852           999,882      45%           60.3

  97       Springfield, IL-MO                           215,021           517,462      42%           58.8

  98       Columbia, MO                                 146,327           369,014      40%           58.7

  89       Monroe, LA                                   131,988           333,519      40%           57.3

  106      Rochester, MN-IA-WI                          140,121           318,374      44%           56.2

  86       Lake Charles, LA                             201,460           536,758      38%           55.3

  105      La Crosse, WI-MN                             61,293            241,903      25%           54.6

  36       Dothan, AL-FL-GA                             121,219           332,409      36%           54.6

  61       Traverse City, MI                            111,359           286,745      39%           52.4

  141      Denver-Boulder-Greeley, CO-KS-NE             2,158,548         3,984,105    54%           52.1

  95       Jonesboro, AR-MO                             97,821            303,852      32%           51.8

  16       Staunton, VA-WV                              172,853           334,087      52%           51.1

  77       Jackson, MS-AL-LA                            582,434           1,432,518    41%           50.5

  119      Lincoln, NE                                  168,876           379,321      45%           50.4

  75       Tupelo, MS-AL-TN                             212,847           625,002      34%           50.4

  94       Springfield, MO                              331,637           859,559      39%           48.7

  132      Corpus Christi, TX                           215,353           549,012      39%           47.7

  91       Fort Smith, AR-OK                            109,451           329,136      33%           47.7

  100      Des Moines, IA-IL-MO                         726,705           1,683,257    43%           47.6

  90       Little Rock-North Little Rock, AR            673,941           1,614,850    42%           47.2

  166      Eugene-Springfield, OR-CA                    314,490           791,776      40%           43.4

  76       Greenville, MS                               54,753            252,280      22%           42.3

  117      Sioux City, IA-NE-SD                         78,391            252,656      31%           39.6

  152      Salt Lake City-Ogden, UT-ID                  934,897           2,088,974    45%           37.1

  123      Topeka, KS                                   172,136           454,539      38%           36.0

  108      Wausau, WI                                   153,868           487,723      32%           35.2

  59       Green Bay, WI-MI                             255,114           671,225      38%           35.0

  157      El Paso, TX-NM                               314,942           955,602      33%           33.1

  58       Northern Michigan, MI                        52,371            269,986      19%           29.9

  169      Richland-Kennewick-Pasco, WA                 241,690           677,674      36%           28.1

  137      Lubbock, TX                                  152,257           374,626      41%           27.2

  147      Spokane, WA-ID                               314,010           829,735      38%           23.9

  153      Las Vegas, NV-AZ-UT                          764,938           1,709,797    45%           23.9

  1        Bangor, ME                                   \*                526,106      \*            22.2

  156      Albuquerque, NM-AZ                           401,336           921,086      44%           20.9

  122      Wichita, KS-OK                               436,681           1,175,577    37%           20.6

  128      Abilene, TX                                  69,134            222,147      31%           20.4

  109      Duluth-Superior, MN-WI                       138,626           350,059      40%           19.8

  113      Fargo-Moorhead, ND-MN                        142,755           371,691      38%           16.9

  155      Farmington, NM-CO                            67,869            193,872      35%           16.1

  116      Sioux Falls, SD-IA-MN-NE                     216,957           519,143      42%           15.4

  165      Redding, CA-OR                               115,277           336,820      34%           14.7

  149      Twin Falls, ID                               60,399            162,397      37%           14.1

  150      Boise City, ID-OR                            239,554           574,876      42%           13.8

  139      Santa Fe, NM                                 98,201            258,790      38%           13.1

  126      Western Oklahoma, OK                         53,392            139,761      38%           12.1

  138      Amarillo, TX-NM                              181,305           481,633      38%           11.8

  120      Grand Island, NE                             115,829           288,047      40%           11.6

  136      Hobbs, NM-TX                                 56,693            190,340      30%           11.2

  148      Idaho Falls, ID-WY                           117,667           306,120      38%           11.0

  146      Missoula, MT                                 125,030           399,183      31%           10.9

  110      Grand Forks, ND-MN                           79,630            230,253      35%           10.5

  135      Odessa-Midland, TX                           150,112           388,007      39%           10.1

  129      San Angelo, TX                               66,580            202,679      33%           10.1

  140      Pueblo, CO-NM                                86,666            279,600      31%           8.7

  168      Pendleton, OR-WA                             60,071            200,681      30%           8.7

  154      Flagstaff, AZ-UT                             111,854           401,766      28%           8.3

  142      Scottsbluff, NE-WY                           34,775            92,360       38%           7.8

  151      Reno, NV-CA                                  272,535           670,013      41%           7.6

  111      Minot, ND                                    \*                111,195      \*            7.2

  112      Bismarck, ND-MT-SD                           64,536            175,427      37%           6.4

  114      Aberdeen, SD                                 \*                82,608       \*            5.5

  143      Casper, WY-ID-UT                             184,959           408,708      45%           5.2

  115      Rapid City, SD-MT-NE-ND                      66,457            213,696      31%           5.1

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

  144      Billings, MT-WY                              139,481           404,902      34%           4.9

  145      Great Falls, MT                              48,795            166,564      29%           4.3

  171      Anchorage, AK                                257,411           626,932      41%           1.1
  -------- -------------------------------------------- ----------------- ------------ ------------- -----------

\* Data withheld to maintain firm confidentiality.

Source: Federal Communications Commission internal analysis based on
preliminary year-end 2001 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 2000                    Year-End 2001         

         Operator              Total      Operator              Total

  1      Verizon Wireless      27,505     Verizon Wireless      29,398

  2      Cingular              19,681     Cingular              21,596

  3      AT&T                  15,163     AT&T                  18,047

  4      Sprint PCS            9,543      Sprint PCS            13,555

  5      Nextel                6,678      Nextel                8,667

  6      ALLTEL                6,300      VoiceStream           6,993

  7      VoiceStream           3,879      ALLTEL                6,683

  8      US Cellular           3,061      US Cellular           3,461

  9      Western Wireless      1,050      Western Wireless      1,177

  10     Powertel              908        Leap Wireless         1,119

  11     Qwest                 805        Qwest                 1,114

  12     CenturyTel            751        Telecorp (1)          1,018

  13     TeleCorp              666        Centennial            827

  14     Dobson Comm.          654        CenturyTel            797

  15     Rural Cellular        552        Dobson Comm.          700

  16     Price Comm            528        Triton PCS            686

  17     Centennial            665        American Cell.        657

  18     Triton PCS            446        Rural Cellular        647

  19     Cincinnati Bell       339        Price Wireless (2)    570

  20     PR Tel. Co.           335        Nextel Partners       516

  21     Nextel Partners       227        Alamosa PCS           503

  22     Midwest Wireless      208        Broadwing             462

  23     Cellcom               190        Airgate               453

  24     Leap Wireless         190        PrimeCo (3)           385

  25     Ntelos                168        PR. Tel. Co.          327
  ------ --------------------- ---------- --------------------- ----------

Sources: For 2000, *see* *Sixth Report,* at 13464. For 2001, publicly
available company documents such as operators' news releases and filings
made with the Securities and Exchange Commission. PrimeCo estimate from
Paul Wuh *et al*., *United States Cellular Corp. to Acquire PrimeCo in
Chicago, Becomes 7^th^ Carrier in Market*, Global Equity Research,
Goldman Sachs, May 13, 2002, at 2.

Notes

\(1\) AT&T Wireless acquired TeleCorp in February 2002.

\(2\) Verizon Wireless has announced plans to acquire Price Wireless.

\(3\) U.S. Cellular has announced plans to acquire PrimeCo.

**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     2164        268,270,582   94.1%     1,746,786    49.6%

  4 or More     1615        252,857,505   88.7%     1,193,833    33.9%

  5 or More     1125        229,432,579   80.4%     839,939      23.9%

  6 or More     670         151,497,042   53.1%     504,777      14.3%

  7 or More     217         60,507,951    21.2%     172,286      4.9%
  ------------- ----------- ------------- --------- ------------ ---------

**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        775         96.3%       234,640,253   231,961,749   98.9%

  2nd Quartile 805        632         78.5%       31,425,466    25,249,594    80.4%

  3rd Quartile 805        509         63.2%       14,146,698    9,189,879     65.0%

  4th Quartile 804        248         30.9%       5,018,099     1,869,360     37.3%
  ------------ ---------- ----------- ----------- ------------- ------------- -----------

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               256,427,449     89.9%      1,761,669.9    50.0%

  TDMA / GSM         265,019,589     92.9%      1,857,545.3    52.8%

  iDEN               245,068,095     85.9%      1,217,212.7    34.6%

  Total Digital      276,799,296     97.0%      2,487,809.1    70.7%
  ------------------ --------------- ---------- -------------- ------------

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

Notes:

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

(2) 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

  Dec-97   100              100                 100                  100                  100         

  Dec-98   101.6   1.6%     91.7       -8.3%    100.3       0.3%     101.3       1.3%     99.9        -0.1%

  Dec-99   104.3   2.7%     81.1       -11.6%   100.7       0.4%     104.2       2.8%     98.6        -1.3%

  Dec-00   107.9   3.4%     71.1       -12.3%   98.4        -2.3%    110.0       5.5%     89.5        -9.2%

  Dec-01   109.5   1.6%     67.2       -5.5%    99.7        1.3%     114.9       4.5%     87.9        -1.8%

                                                                                                      

  Dec-97   100     9.5%     100        -32.8%   100         -0.3%    100         14.9%    100         -12.1%
  to                                                                                                  
  Dec-01                                                                                              
  -------- ------- -------- ---------- -------- ----------- -------- ----------- -------- ----------- --------

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       385           \$0.12           -31%
  ------------ ------------- ------------- ---------------- ---------------

Source: CTIA, *Semi-Annual Mobile Telephone Industry Survey*
\<.http://www.wow-com.com/wirelesssurvey/\> (average local monthly
bill); *June 2001 CTIA Survey* (results through 2000), at 168-169
(minutes of use); Todd Rethemeier *et al*, *Talk is Cheaper, Demand is
Steeper*, Bear Sterns, Equity Research, May 21, 2002, at 1 (citing CTIA
2001 minutes of use).

**Table 10: Rural vs. Urban Pricing**

<table>
<colgroup>
<col style="width: 26%" />
<col style="width: 14%" />
<col style="width: 4%" />
<col style="width: 10%" />
<col style="width: 4%" />
<col style="width: 10%" />
<col style="width: 4%" />
<col style="width: 10%" />
<col style="width: 4%" />
<col style="width: 11%" />
</colgroup>
<tbody>
<tr class="odd">
<td colspan="10"><p>Average Monthly Charge for Wireless Service</p>
<p>Comparison Across Market Groups Surveyed</p>
<p>October 2001</p></td>
</tr>
<tr class="even">
<td rowspan="6"><p> </p>
<p> </p>
<p> </p>
<p> </p>
<p> </p></td>
<td colspan="9">October 2001 70 % Peak</td>
</tr>
<tr class="odd">
<td colspan="9">Minutes of Usage Per Month</td>
</tr>
<tr class="even">
<td>30</td>
<td></td>
<td>150</td>
<td></td>
<td>300</td>
<td></td>
<td>600</td>
<td> </td>
<td>Average</td>
</tr>
<tr class="odd">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="even">
<td colspan="9">(Dollars Per Month)</td>
</tr>
<tr class="odd">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="even">
<td>Top 25 Markets</td>
<td>$23.46</td>
<td> </td>
<td>$34.69</td>
<td> </td>
<td>$39.79</td>
<td> </td>
<td>$51.61</td>
<td> </td>
<td>$37.39</td>
</tr>
<tr class="odd">
<td>“Rural” Markets</td>
<td>$23.52</td>
<td> </td>
<td>$31.09</td>
<td> </td>
<td>$36.34</td>
<td> </td>
<td>$54.39</td>
<td> </td>
<td>$36.34</td>
</tr>
<tr class="even">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
<tr class="odd">
<td>Large-Market Premium</td>
<td>-$0.07</td>
<td> </td>
<td>$3.60</td>
<td> </td>
<td>$3.45</td>
<td> </td>
<td>-$2.78</td>
<td> </td>
<td>$1.05</td>
</tr>
<tr class="even">
<td>% Difference</td>
<td>-0.3%</td>
<td> </td>
<td>11.6%</td>
<td> </td>
<td>9.5%</td>
<td> </td>
<td>-5.1%</td>
<td> </td>
<td>2.9%</td>
</tr>
<tr class="odd">
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
<td> </td>
</tr>
</tbody>
</table>

Source: Charles R. Mahla, *Public Forum For the 7th Annual CMRS
Competition Report,* Presentation, Econ One Research, Inc., Feb. 28,
2002, at slide 12 (*available at*
http://wireless.fcc.gov/services/cmrs/presentations/).

**Table 11: First Cellular Of Illinois Per Minute Pricing**

**1995-2001**

![](media/image2.wmf){width="5.998611111111111in"
height="4.841666666666667in"}

Source: Terry Addington, CEO of First Cellular of Southern Illinois,
handout presented at the CMRS Public Forum, Feb. 28, 2002.

**Table 12: U.S. Mobile Telephone Operators'**

**Holdings in Foreign Mobile Operators**

+------------+-------------+------+------+------------+-------------+
| **         | **Country** | **S  |      | *          | **Ownership |
| Operator** |             | ubsc |      | *Venture** | (%)**       |
|            |             | ribe |      |            |             |
|            |             | rs** |      |            |             |
|            |             |      |      |            |             |
|            |             | **(B |      |            |             |
|            |             | rand |      |            |             |
|            |             | nam  |      |            |             |
|            |             | e)** |      |            |             |
+------------+-------------+------+------+------------+-------------+
| SBC        | France      | 11   |      | Cegetel    | 15 (through |
|            |             | .646 |      | (owns 80%  | JV with     |
|            |             | mil  |      | of         | Vivendi)    |
|            |             | lion |      | cellular   |             |
|            |             |      |      | company    |             |
|            |             |      |      | Societe    |             |
|            |             |      |      | Francaise  |             |
|            |             |      |      | de         |             |
|            |             |      |      | Radio      |             |
|            |             |      |      | telephone) |             |
+------------+-------------+------+------+------------+-------------+
|            | Denmark     | 1    |      | Tele       | 41.6        |
|            |             | .918 |      | Danmark    |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Belgium     | 4    |      | Belgacom   | 17.5        |
|            |             | .098 |      |            | (controls   |
|            |             | mil  |      |            | 24.36%      |
|            |             | lion |      |            | through     |
|            |             |      |      |            | investment  |
|            |             | (P   |      |            | in Tele     |
|            |             | roxi |      |            | Danmark,    |
|            |             | mus) |      |            | which owns  |
|            |             |      |      |            | 16.5% of    |
|            |             |      |      |            | Belgacom)   |
+------------+-------------+------+------+------------+-------------+
|            | South       | 5    |      | Telkom     | 18          |
|            | Africa      | .919 |      | SA(owns    |             |
|            |             | mil  |      | 50% of     |             |
|            |             | lion |      | Vodacom)   |             |
|            |             | (    |      |            |             |
|            |             | Voda |      |            |             |
|            |             | com) |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Canada      | 2    |      | Bell       | 20          |
|            |             | .789 |      | Canada     |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
|            |             |      |      |            |             |
|            |             | (    |      |            |             |
|            |             | Bell |      |            |             |
|            |             | M    |      |            |             |
|            |             | obil |      |            |             |
|            |             | ity) |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Mexico      | 16   |      | America    | 8           |
|            |             | .103 |      | Movil      |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
| BellSouth  | Uruguay     | 138  |      | Abiatar    | 46          |
|            |             | ,000 |      |            |             |
|            |             |      |      |            |             |
|            |             | (    |      |            |             |
|            |             | Movi |      |            |             |
|            |             | com) |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Guatemala   | 75   |      | BellSouth  | 60          |
|            |             | ,000 |      | Guatemala  |             |
+------------+-------------+------+------+------------+-------------+
|            | Nicaragua   | 157  |      | Nicacell   | 89          |
|            |             | ,000 |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Ecuador     | 344  |      | Otecel     | 89.4        |
|            |             | ,000 |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Panama      | 293  |      | BellSouth  | 43.7        |
|            |             | ,000 |      | Panama     |             |
+------------+-------------+------+------+------------+-------------+
|            | Brazil (Sao | 1    |      | BCP        | 45.4        |
|            | Paulo)      | .781 |      |            |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Brazil      | 942  |      | BCP        | 47.1        |
|            | (northeast) | ,000 |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            |             |      |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Venezuela   | 3    |      | Telcel     | 78.2        |
|            |             | .106 |      |            |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Argentina   | 1    |      | Movicom/   | 65          |
|            |             | .588 |      |            |             |
|            |             | mil  |      | BellSouth  |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Chile       | 860  |      | BellSouth  | 100         |
|            |             | ,000 |      | Chile      |             |
+------------+-------------+------+------+------------+-------------+
|            | Columbia    | 1    |      | Celumovil  | 66          |
|            |             | .126 |      |            |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Peru        | 404  |      | Tele 2000  | 97.4        |
|            |             | ,000 |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Denmark     | 810  |      | Sonafon    | 46.5        |
|            |             | ,251 |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Israel      | 1    |      | Cellcom    | 34.7        |
|            |             | ,856 |      |            |             |
|            |             | ,488 |      |            |             |
+------------+-------------+------+------+------------+-------------+
| AT&T       | Canada      | 3    |      | Rogers     | 34.4        |
|            |             | mil  |      | Wireless   |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | India       | 176  |      | Birla      | 33          |
|            |             | ,800 |      | -AT&T-Tata |             |
+------------+-------------+------+------+------------+-------------+
|            | Taiwan      | 3    |      | FarEasTone | 22.7        |
|            |             | .211 |      |            |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Czech       | 2.11 |      | EuroTel    | 24.5        |
|            | Republic    | mil  |      | Praha      |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Slovakia    | 493  |      | EuroTel    | 24.5        |
|            |             | ,030 |      | Bratislava |             |
+------------+-------------+------+------+------------+-------------+
|            | India       | 606  |      | BPL        | 49          |
|            |             | ,200 |      | Cellular   |             |
|            |             |      |      |            |             |
|            |             | (BPL |      |            |             |
|            |             | Mob  |      |            |             |
|            |             | ile) |      |            |             |
+------------+-------------+------+------+------------+-------------+
| Verizon    | Italy       | \>17 |      | Omnitel    | 23.1        |
|            |             | mil  |      | Pronto     |             |
|            |             | lion |      | Italia     |             |
+------------+-------------+------+------+------------+-------------+
|            | Mexico      | 1.9  |      | Iusacell   | 39.4        |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Czech       | 2.11 |      | EuroTel    | 24.5        |
|            | Republic    | mil  |      | Praha      |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Slovakia    | 493  |      | EuroTel    | 24.5        |
|            |             | ,030 |      | Bratislava |             |
+------------+-------------+------+------+------------+-------------+
|            | Greece      | 1    |      | STET       | 17.5        |
|            |             | .645 |      | Hellas     |             |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Indonesia   | 765  |      | Ex         | 23.1        |
|            |             | ,000 |      | celcomindo |             |
+------------+-------------+------+------+------------+-------------+
|            | Japan       | 3.84 |      | Tu-Ka      | 2.7-5       |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | New Zealand | 1.2  |      | Telecom    | 21.5        |
|            |             | mil  |      | New        |             |
|            |             | lion |      | Zealand    |             |
+------------+-------------+------+------+------------+-------------+
|            | Philippines | 26   |      | BayanTel   | 19.4        |
|            |             | ,000 |      | (owns      |             |
|            |             |      |      | 46.6%      |             |
|            |             | (E   |      | stake in   |             |
|            |             | xtel |      | wireless   |             |
|            |             | com) |      | provider   |             |
|            |             |      |      | Extelcom)  |             |
+------------+-------------+------+------+------------+-------------+
|            | Argentina   | 1.1  |      | CTI        | 65.3        |
|            |             | mil  |      | Holdings   |             |
|            |             | lion |      |            |             |
|            |             |      |      |            |             |
|            |             | (CTI |      |            |             |
|            |             | Mo   |      |            |             |
|            |             | vil) |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Canada      | 2.5  |      | TELUS      | 23.7        |
|            |             | mil  |      | C          |             |
|            |             | lion |      | orporation |             |
+------------+-------------+------+------+------------+-------------+
|            | Venezuela   | 2.5  |      | CANTV      | 28.5        |
|            |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Taiwan      | 6.6  |      | Taiwan     | 13          |
|            |             | mil  |      | Cellular   |             |
|            |             | lion |      | C          |             |
|            |             |      |      | orporation |             |
+------------+-------------+------+------+------------+-------------+
|            | Dominican   | 550  |      | CODETEL    | 100         |
|            | Republic    | ,000 |      |            |             |
+------------+-------------+------+------+------------+-------------+
| Western    | Ireland     | 802  | Laun | Meteor     | 78          |
| Wireless   |             | ,000 | ched |            |             |
| Int        |             | for  | 2/01 |            |             |
| ernational |             | all  |      |            |             |
|            |             | for  |      |            |             |
|            |             | eign |      |            |             |
|            |             | vent |      |            |             |
|            |             | ures |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Iceland     |      | 55   | TAL        | 57.3        |
|            |             |      | ,000 |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Austria     |      | 200  | tele.ring  | 100         |
|            |             |      | ,000 |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Slovenia    |      | Lice | Western    | 100         |
|            |             |      | nsed | Wireless   |             |
|            |             |      | 1    |            |             |
|            |             |      | 1/00 |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Croatia     |      | 470  | VIPnet     | 19          |
|            |             |      | ,000 |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Georgia     |      | NA   | MagtiCom   | 14.5        |
+------------+-------------+------+------+------------+-------------+
|            | Ghana       |      | NA   | Western    | 56.7        |
|            |             |      |      | T          |             |
|            |             |      |      | elesystems |             |
+------------+-------------+------+------+------------+-------------+
|            | Cote        |      | Laun | CORA de    | 40          |
|            | d'Ivoire    |      | ched | Comstar    |             |
|            |             |      | 9/00 |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Bolivia     |      | Laun | NuevaTel   | 67          |
|            |             |      | ched |            |             |
|            |             |      | 1    |            |             |
|            |             |      | 1/00 |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Haiti       |      | NA   | COMCEL     | 51          |
+------------+-------------+------+------+------------+-------------+
| Nextel     | Canada      | 2    |      | TELUS      | 4.8         |
| Int        |             | .156 |      | Corp.      |             |
| ernational |             | mil  |      |            |             |
|            |             | lion |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Japan       | 49   |      | NEXNET Co. | 32          |
|            |             | ,000 |      |            |             |
+------------+-------------+------+------+------------+-------------+
|            | Argentina   | 134  |      | Nextel     | 100         |
|            |             | ,000 |      | Comm       |             |
|            |             |      |      | unications |             |
|            |             |      |      | Argentina  |             |
+------------+-------------+------+------+------------+-------------+
|            | Brazil      | 322  |      | Nextel     | 100         |
|            |             | ,000 |      | Teleco     |             |
|            |             |      |      | municacoes |             |
+------------+-------------+------+------+------------+-------------+
|            | Mexico      | 218  |      | Nextel De  | 100         |
|            |             | ,000 |      | Mexico     |             |
+------------+-------------+------+------+------------+-------------+
|            | Peru        | 68   |      | Nextel del | 100         |
|            |             | ,000 |      | Peru       |             |
+------------+-------------+------+------+------------+-------------+
|            | Philippines | 42   |      | Nextel     | 51          |
|            |             | ,000 |      | Comm       |             |
|            |             |      |      | unications |             |
|            |             |      |      | Ph         |             |
|            |             |      |      | ilippines, |             |
|            |             |      |      | Inc.       |             |
+------------+-------------+------+------+------------+-------------+

Sources: Publicly available information such as operators' news
releases, web sites, filings with the Securities and Exchange
Commission, and the web site of the European Radiocommunications Office.

**Table 13: International Comparisons of Mobile Pricing**

+--------------------------+--------------+---------------+-----------+
| **Country**              | **Business** | **            | **Revenue |
|                          |              | Residential** | Per       |
|                          | **Mobile     |               | Minute**  |
|                          | Basket**     | **Mobile      |           |
|                          |              | Basket**      |           |
+--------------------------+--------------+---------------+-----------+
| Australia                | \$759        | \$172         | \$0.18    |
+--------------------------+--------------+---------------+-----------+
| Japan                    | \$907        | \$347         | \$0.33    |
+--------------------------+--------------+---------------+-----------+
| New Zealand              | \$1659       | \$368         | \$0.15    |
+--------------------------+--------------+---------------+-----------+
| South Korea              | \$1039       | \$357         | \$0.19    |
+--------------------------+--------------+---------------+-----------+
| **Asia-Pacific Average** | **\$1091**   | **\$311**     | *         |
|                          |              |               | *\$0.21** |
+--------------------------+--------------+---------------+-----------+
| Austria                  | \$736        | \$387         |           |
+--------------------------+--------------+---------------+-----------+
| Belgium                  | \$860        | \$266         |           |
+--------------------------+--------------+---------------+-----------+
| Denmark                  | \$945        | \$183         |           |
+--------------------------+--------------+---------------+-----------+
| Finland                  | \$1074       | \$152         |           |
+--------------------------+--------------+---------------+-----------+
| France-Orange, Forfait   | \$1063       | \$406         | \$0.20    |
| 2H                       |              |               |           |
+--------------------------+--------------+---------------+-----------+
| France-Orange, Forfait   | \$790        | \$683         |           |
| 5H                       |              |               |           |
+--------------------------+--------------+---------------+-----------+
| Germany                  | \$1124       | \$299         | \$0.20    |
+--------------------------+--------------+---------------+-----------+
| Greece                   | \$1262       | \$308         | \$0.28    |
+--------------------------+--------------+---------------+-----------+
| Iceland                  | \$815        | \$167         |           |
+--------------------------+--------------+---------------+-----------+
| Ireland                  | \$1157       | \$257         |           |
+--------------------------+--------------+---------------+-----------+
| Italy                    | \$1556       | \$345         | \$0.21    |
+--------------------------+--------------+---------------+-----------+
| Luxembourg               | \$690        | \$184         |           |
+--------------------------+--------------+---------------+-----------+
| Netherlands              | \$790        | \$269         |           |
+--------------------------+--------------+---------------+-----------+
| Norway                   | \$717        | \$214         |           |
+--------------------------+--------------+---------------+-----------+
| Portugal                 | \$1252       | \$388         | \$0.21    |
+--------------------------+--------------+---------------+-----------+
| Spain                    | \$1618       | \$323         | \$0.23    |
+--------------------------+--------------+---------------+-----------+
| Sweden                   | \$1257       | \$206         |           |
+--------------------------+--------------+---------------+-----------+
| Switzerland              | \$1046       | \$284         |           |
+--------------------------+--------------+---------------+-----------+
| U.K.-BT                  | \$1006       | \$339         | \$0.21    |
+--------------------------+--------------+---------------+-----------+
| U.K.-Vodafone            | \$1047       | \$331         |           |
+--------------------------+--------------+---------------+-----------+
| **West European          | **\$1040**   | **\$299**     | *         |
| Average**                |              |               | *\$0.22** |
+--------------------------+--------------+---------------+-----------+
| Canada                   | \$1026       | \$422         | \$0.13    |
+--------------------------+--------------+---------------+-----------+
| U.S.A.-Qwest             | \$772        | \$415         | \$0.16    |
+--------------------------+--------------+---------------+-----------+
| U.S.A.-Sprint            | \$692        | \$479         |           |
+--------------------------+--------------+---------------+-----------+

Sources: The mobile baskets are from *Teligen T-Basket -- Mobile
(GSM/PCS) Basket*, Teligen Limited, Feb. 2002; the Revenue Per Minute
estimates are from Adam Quinton et al, *Wireless Matrix -- 3Q01*, Global
Equity Research, Merrill Lynch, Jan. 2002, at 3.

**APPENDIX D:**

**MOBILE DATA**

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

Table 1: 3G Spectrum Licensing Abroad D-2

Table 2: Mobile Internet Access Services D-5

Table 3: Bluetooth-Enabled Devices D-8

Table 4: Telemetry Services D-9

**Table 1: 3G Licensing Abroad**

+-----------+----------+-----------+-----------+----------------------+
| **        | **Sp     | **Number  | **Ass     | **Auction Revenue**  |
| Country** | ectrum** | of        | ignment** |                      |
|           |          | L         |           | **Or License Fee**   |
| **(       | *        | icenses** | *         |                      |
| status)** | *(MHz)** |           | *Method** | **(US Dollars)**     |
+-----------+----------+-----------+-----------+----------------------+
| Austria   | 145      | 4-6       | Auction   | \$618m               |
|           |          |           |           |                      |
| (Awarded  |          | (6        |           |                      |
| November  |          | awarded)  |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Australia | 140 in   | 4 or more | Auction   | \$580m               |
|           | capital  |           |           |                      |
| (Awarded  | cities   | (6        |           |                      |
| March     |          | awarded)  |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
|           | 110 in   | 3 or more |           |                      |
|           | Canberra |           |           |                      |
|           |          | (5        |           |                      |
|           |          | awarded)  |           |                      |
+-----------+----------+-----------+-----------+----------------------+
|           | 40 in    | 2 or more |           |                      |
|           | regional |           |           |                      |
|           | areas    | (3        |           |                      |
|           |          | awarded)  |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Belgium   | 140      | 4         | Auction   | \$413m               |
|           |          |           |           |                      |
| (Awarded  | (105     | (3        |           |                      |
| March     | sold)    | awarded)  |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Denmark   | 140      | 4         | Auction   | \$472m               |
|           |          |           |           |                      |
| (Awarded  |          |           |           |                      |
| September |          |           |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Finland   | 140      | 4         | Beauty    | Annual spectrum fee  |
|           |          |           | contest   | of \$890 per 25 KHz  |
| (Awarded  |          |           |           | (licenses awarded    |
| March     |          |           |           | free of charge)      |
| 1999)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| France    | 140      | 4         | Beauty    | \$535m per license + |
|           |          |           | contest   | 1% of annual revenue |
| (Awarded  |          | (2 bids   |           |                      |
| May 2001) |          | received) |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Germany   | 145      | 4-6       | Auction   | \$46.11bn            |
|           |          |           |           |                      |
| (Awarded  |          | (6        |           |                      |
| August    |          | awarded)  |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Greece    | 140      | 4         | Auction   | \$414.1m             |
|           |          |           |           |                      |
| (Awarded  |          | (3        |           |                      |
| July      |          | awarded)  |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+

+-----------+----------+-----------+-----------+----------------------+
| Hong Kong | 140      | 4         | Co        | 5% of 3G revenue     |
|           |          |           | mbination | over 15 years, with  |
| (Awarded  |          |           |           | minimum of \$6.4m    |
| September |          |           | (pre      | per year in first 5  |
|           |          |           | qualifica | years                |
| 2001\)    |          |           | tion      |                      |
|           |          |           | followed  |                      |
|           |          |           | by        |                      |
|           |          |           | aucti     |                      |
|           |          |           | on[^631]) |                      |
+-----------+----------+-----------+-----------+----------------------+
| Italy     | 1        | 5         | Co        | \$10.04bn            |
|           | 45[^632] |           | mbination |                      |
| (Awarded  |          |           | (prequal  |                      |
| October   |          |           | ification |                      |
| 2000)     |          |           | beauty    |                      |
|           |          |           | contest   |                      |
|           |          |           | followed  |                      |
|           |          |           | by        |                      |
|           |          |           | auction)  |                      |
+-----------+----------+-----------+-----------+----------------------+
| Ireland   | 140      | 4         | Beauty    | \$43.6m (A license)  |
|           |          |           | contest   | or \$98.3m (B        |
| (Expected |          |           |           | licenses) + \$1.91m  |
| June      |          |           |           | annual fee           |
| 2002)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Japan     | 120      | 3         | Beauty    | No fees              |
|           |          |           | contest   |                      |
| (Awarded  |          |           |           |                      |
| July      |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Ne        | 145      | 5         | Auction   | \$2.5bn              |
| therlands |          |           |           |                      |
|           |          |           |           |                      |
| (Awarded  |          |           |           |                      |
| July      |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| New       | 105      | 4         | Auction   | \$51.4m              |
| Zealand   |          |           |           |                      |
|           |          |           |           |                      |
| (Awarded  |          |           |           |                      |
| January   |          |           |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Norway    | 140      | 4[^633]   | Beauty    | \$92m + annual fee   |
|           |          |           | contest   | of \$2.2m per        |
| (Awarded  |          |           |           | license              |
| November  |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Portugal  | 140      | 4         | Beauty    | \$342.4m + annual    |
|           |          |           | contest   | fee                  |
| (Awarded  |          |           |           |                      |
| November  |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Singapore | 140      | 4         | Auct      | \$173.4m             |
|           |          |           | ion[^634] |                      |
| (Awarded  |          | (3        |           |                      |
| April     |          | awarded)  |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| South     | Not      | 3         | Beauty    | \$3.3bn              |
| Korea     | a        |           | contest   |                      |
|           | vailable |           |           |                      |
| (Awarded  |          |           |           |                      |
| December  |          |           |           |                      |
| 2000 and  |          |           |           |                      |
| August    |          |           |           |                      |
| 2001)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Spain     | 140      | 4         | Beauty    | \$446.5m + annual    |
|           |          |           | contest   | fee                  |
| (Awarded  |          |           |           |                      |
| March     |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Sweden    | 140      | 4         | Beauty    | \$107,000 + 0.15% of |
|           |          |           | contest   | annual revenues      |
| (Awarded  |          |           |           |                      |
| December  |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Sw        | 140      | 4         | Auction   | \$120m               |
| itzerland |          |           |           |                      |
|           |          |           |           |                      |
| (Awarded  |          |           |           |                      |
| December  |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| Taiwan    | 170      | 5         | Auction   | \$1.4bn              |
|           |          |           |           |                      |
| (Awarded  |          |           |           |                      |
| Feb.      |          |           |           |                      |
| 2002)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+
| UK        | 140      | 5         | Auction   | \$35.361bn           |
|           |          |           |           |                      |
| (Awarded  |          |           |           |                      |
| April     |          |           |           |                      |
| 2000)     |          |           |           |                      |
+-----------+----------+-----------+-----------+----------------------+

Sources: Publicly available information such as web sites of national
regulatory authorities, the EU Commission, and the ITU.

**Table 2: Mobile Internet Access Services**

+-------+-------+------+----------+----+----+----+-----------------+
| **    | **Ser | *    | *        | *  | *  | ** | **Notes**       |
| Provi | vice\ | *Dev | *Price** | *M | *W | E- |                 |
| der** | N     | ice( |          | es | eb | ma |                 |
|       | ame** | s)** | **(\$    | s- | ** | il |                 |
|       |       |      | per      | ** |    | ** |                 |
|       |       |      | month)** |    |    |    |                 |
|       |       |      |          | *  |    |    |                 |
|       |       |      |          | *a |    |    |                 |
|       |       |      |          | gi |    |    |                 |
|       |       |      |          | ng |    |    |                 |
|       |       |      |          | ** |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| A     | W     | Mo   | \$5.95,  |    | •  | •  | Users can       |
| LLTEL | eb-Un | bile | free for |    |    |    | customize their |
|       | wired | hand | the      |    |    |    | wireless web    |
|       |       | sets | first    |    |    |    | home pages to   |
|       |       |      | month    |    |    |    | include         |
|       |       |      |          |    |    |    | pertinent       |
|       |       |      |          |    |    |    | information and |
|       |       |      |          |    |    |    | tools, such as  |
|       |       |      |          |    |    |    | a list of       |
|       |       |      |          |    |    |    | bookmarks.      |
+-------+-------+------+----------+----+----+----+-----------------+
| AOL   | M     | RIM  | \$29.95  | •  |    | •  | Users can       |
|       | obile | 2    |          |    |    |    | access AOL IM   |
|       | Co    | -way |          |    |    |    | and e-mail      |
|       | mmuni | m    |          |    |    |    | messages from   |
|       | cator | essa |          |    |    |    | an AOL account. |
|       |       | ging |          |    |    |    |                 |
|       |       | de   |          |    |    |    |                 |
|       |       | vice |          |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| Arch  | We    | Moto | \$9.95   | •  |    | •  | Users can have  |
| Wir   | bster | rola | -\$59.95 |    |    |    | messages from   |
| eless | 100   | T900 | for      |    |    |    | existing e-mail |
|       |       |      | 10,000   |    |    |    | accounts        |
|       |       |      | ch       |    |    |    | forwarded to    |
|       |       |      | aracters |    |    |    | the device,     |
|       |       |      | to       |    |    |    | exchange IMs,   |
|       |       |      | u        |    |    |    | and receive     |
|       |       |      | nlimited |    |    |    | information     |
|       |       |      | m        |    |    |    | updates.        |
|       |       |      | essaging |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| AT&T  | 2-Way | Mo   | 10¢ per  | •  |    |    | Receive         |
| Wir   | Text  | bile | sent     |    |    |    | unlimited       |
| eless | M     | hand | message  |    |    |    | messages with   |
|       | essag | sets | or AIM   |    |    |    | both pricing    |
|       | ing/\ |      | command  |    |    |    | plans. Send     |
|       | AIM   |      |          |    |    |    | text messages   |
|       |       |      | 25¢ per  |    |    |    | to any digital  |
|       |       |      | message  |    |    |    | network.        |
|       |       |      | when     |    |    |    |                 |
|       |       |      | roaming  |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       |       |      | \$4.99   | •  |    |    |                 |
|       |       |      | for 100  |    |    |    |                 |
|       |       |      | sent     |    |    |    |                 |
|       |       |      | m        |    |    |    |                 |
|       |       |      | essages, |    |    |    |                 |
|       |       |      | 10¢      |    |    |    |                 |
|       |       |      | th       |    |    |    |                 |
|       |       |      | ereafter |    |    |    |                 |
|       |       |      | or per   |    |    |    |                 |
|       |       |      | AIM      |    |    |    |                 |
|       |       |      | command  |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Pock  | Mo   | \$0      |    | •  | •  | Basic free      |
|       | etNet | bile | -\$14.99 |    |    |    | service         |
|       |       | hand |          |    |    |    | includes access |
|       |       | sets |          |    |    |    | to over 80 web  |
|       |       |      |          |    |    |    | sites.          |
|       |       |      |          |    |    |    |                 |
|       |       |      |          |    |    |    | Plus and        |
|       |       |      |          |    |    |    | Premium plans   |
|       |       |      |          |    |    |    | include access  |
|       |       |      |          |    |    |    | to all web      |
|       |       |      |          |    |    |    | sites, email,   |
|       |       |      |          |    |    |    | calendar,       |
|       |       |      |          |    |    |    | contact list,   |
|       |       |      |          |    |    |    | and other       |
|       |       |      |          |    |    |    | features.       |
+-------+-------+------+----------+----+----+----+-----------------+
|       | M     | Mo   | \$29.99  |    | •  | •  | GSM/GPRS        |
|       | obile | bile | for up   |    |    |    | network with    |
|       | Int   | h    | to 5MB + |    |    |    | speeds bursting |
|       | ernet | ands | .7¢ per  |    |    |    | up to 144 kbps. |
|       | (GSM  | ets, | extra KB |    |    |    |                 |
|       | /GPRS | wire |          |    |    |    |                 |
|       | Net   | less |          |    |    |    |                 |
|       | work) | m    |          |    |    |    |                 |
|       |       | odem |          |    |    |    |                 |
|       |       | card |          |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       |       |      | \$39.99  |    | •  | •  |                 |
|       |       |      | and up   |    |    |    |                 |
|       |       |      | --       |    |    |    |                 |
|       |       |      | Bundled  |    |    |    |                 |
|       |       |      | voice    |    |    |    |                 |
|       |       |      | and data |    |    |    |                 |
|       |       |      | plans    |    |    |    |                 |
|       |       |      | that     |    |    |    |                 |
|       |       |      | include  |    |    |    |                 |
|       |       |      | 1 MB +   |    |    |    |                 |
|       |       |      | voice    |    |    |    |                 |
|       |       |      | minutes  |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| Cin   | 2-Way | Mo   | \$2.99   | •  |    |    | Send and        |
| gular | Text  | bile | for 100  |    |    |    | receive up to   |
| Wir   | M     | hand | messages |    |    |    | 150 characters  |
| eless | essag | sets |          |    |    |    | on any          |
|       | ing/\ |      | \$5.99   |    |    |    | carrier's       |
|       | MSN   |      | for 250  |    |    |    | network.        |
|       | Mess  |      | messages |    |    |    |                 |
|       | enger |      |          |    |    |    |                 |
|       |       |      | \$9.99   |    |    |    |                 |
|       |       |      | for 500  |    |    |    |                 |
|       |       |      | messages |    |    |    |                 |
|       |       |      |          |    |    |    |                 |
|       |       |      | 10¢ per  |    |    |    |                 |
|       |       |      | ad       |    |    |    |                 |
|       |       |      | ditional |    |    |    |                 |
|       |       |      | message  |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Wir   | Mo   | \$6.99-  | •  | •  | •  | Provides        |
|       | eless | bile | \$13.99, |    |    |    | content such as |
|       | Int   | hand | includes |    |    |    | movie listings, |
|       | ernet | sets | 100 to   |    |    |    | stock quotes,   |
|       |       |      | 500      |    |    |    | news, weather   |
|       |       |      | messages |    |    |    | and yellow      |
|       |       |      |          |    |    |    | pages.          |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Wir   | Mo   | \$14.99  | •  | •  | •  | Provides        |
|       | eless | bile | -\$21.99 |    |    |    | content via     |
|       | Int   | hand | for 500  |    |    |    | GPRS network.   |
|       | ernet | sets | KB + 100 |    |    |    |                 |
|       | Ex    |      | to 500   |    |    |    |                 |
|       | press |      | messages |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| Eart  | Eart  | var  | \$39.99  |    | •  | •  | Prices are      |
| hLink | hLink | ious | (most    |    |    |    | slightly lower  |
|       | Wir   | P    | PDAs)    |    |    |    | with an annual  |
|       | eless | DAs, |          |    |    |    | prepaid service |
|       | Se    | Moto | RIM:     |    |    |    | contract.       |
|       | rvice | rola | \$9.95   |    |    |    |                 |
|       |       | 2    | beyond   |    |    |    |                 |
|       |       | -way | Bl       |    |    |    |                 |
|       |       | p    | ackBerry |    |    |    |                 |
|       |       | ager |          |    |    |    |                 |
|       |       |      | Compaq:  |    |    |    |                 |
|       |       |      | \$59.99\ |    |    |    |                 |
|       |       |      | M        |    |    |    |                 |
|       |       |      | otorola: |    |    |    |                 |
|       |       |      | \$24.95  |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| GoAm  | G     | var  | \$49.95  |    | •  | •  | Users can       |
| erica | o.Web | ious | un       |    |    |    | access existing |
|       |       | P    | limited\ |    |    |    | POP3 e-mail     |
|       |       | DAs, | RIM:     |    |    |    | accounts.       |
|       |       | lap  | \$24.95  |    |    |    |                 |
|       |       | tops | beyond   |    |    |    |                 |
|       |       |      | Bl       |    |    |    |                 |
|       |       |      | ackBerry |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| Metr  | M     | Moto | \$19.95  | •  |    | •  |                 |
| ocall | y2Way | rola | -\$49.95 |    |    |    |                 |
|       |       | T    | for      |    |    |    |                 |
|       |       | 900, | 1        |    |    |    |                 |
|       |       | P935 | 000-3500 |    |    |    |                 |
|       |       |      | messages |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | My    | RIM  | \$49.95  | •  |    | •  |                 |
|       | eLink | 850  | u        |    |    |    |                 |
|       |       |      | nlimited |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| Mo    | eLink | RIM  | \$49.99  |    | •  | •  | Forwards        |
| tient |       | 850, | u        |    |    |    | messages from   |
|       |       | RIM  | nlimited |    |    |    | an existing POP |
|       |       | 857, |          |    |    |    | or IMAP e-mail  |
|       |       | Palm | \$19.99  |    |    |    | account to the  |
|       |       | V    | for      |    |    |    | device; web     |
|       |       | with | 150,000  |    |    |    | browsing from   |
|       |       | wire | char     |    |    |    | Go.Web          |
|       |       | less | acters + |    |    |    |                 |
|       |       | m    | \$0.20   |    |    |    |                 |
|       |       | odem | per addl |    |    |    |                 |
|       |       |      | KB       |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| N     | N     | Mo   | \$5.00,  |    | •  | •  | Access to       |
| extel | extel | bile | free     |    |    |    | w               |
|       | O     | hand | with     |    |    |    | ireless-enabled |
|       | nline | sets | national |    |    |    | websites and    |
|       |       |      | plans    |    |    |    | Microsoft       |
|       |       |      |          |    |    |    | Hotmail         |
|       |       |      |          |    |    |    | account. Plan   |
|       |       |      |          |    |    |    | includes 300    |
|       |       |      |          |    |    |    | text messages   |
|       |       |      |          |    |    |    | per month.      |
+-------+-------+------+----------+----+----+----+-----------------+
|       | N     | Mo   | \$10.00  |    | •  | •  | Access to       |
|       | extel | bile |          |    |    |    | w               |
|       | O     | hand |          |    |    |    | ireless-enabled |
|       | nline | sets |          |    |    |    | websites,       |
|       | Plus  |      |          |    |    |    | email,          |
|       |       |      |          |    |    |    | calendar, and   |
|       |       |      |          |    |    |    | contact list.   |
|       |       |      |          |    |    |    | Plan includes   |
|       |       |      |          |    |    |    | 300 text        |
|       |       |      |          |    |    |    | messages per    |
|       |       |      |          |    |    |    | month.          |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Tw    | Mo   | \$5.00,  | •  |    |    | Send and        |
|       | o-way | bile | u        |    |    |    | receive email,  |
|       | Mess  | hand | nlimited |    |    |    | text, and       |
|       | aging | sets | usage    |    |    |    | numeric         |
|       |       |      |          |    |    |    | messages.       |
+-------+-------+------+----------+----+----+----+-----------------+
| Palm  | Pal   | Palm | \$9.99   | •  | •  | •  | Service on Palm |
|       | m.net | i705 | 50 KB    |    |    |    | i705 includes   |
|       |       |      |          |    |    |    | access to AIM.  |
|       |       | Palm | \$24.99  |    |    |    |                 |
|       |       | VII  | 150 KB   |    |    |    |                 |
|       |       |      |          |    |    |    |                 |
|       |       |      | \$44.99  |    |    |    |                 |
|       |       |      | u        |    |    |    |                 |
|       |       |      | nlimited |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| RIM   | Black | RIM  | \$39.99  |    |    | •  | Allows          |
|       | Berry | PDAs |          |    |    |    | integration     |
|       |       |      |          |    |    |    | with existing   |
|       |       |      |          |    |    |    | e-mail          |
|       |       |      |          |    |    |    | accounts.       |
+-------+-------+------+----------+----+----+----+-----------------+
| S     | eChat | Moto | \        | •  |    | •  | Individual      |
| kyTel |       | rola | $14.95 - |    |    |    | messages have a |
|       |       | T900 | \$29.98  |    |    |    | 500-character   |
|       |       |      | for      |    |    |    | limit.          |
|       |       |      | 500 -    |    |    |    |                 |
|       |       |      | 2000     |    |    |    |                 |
|       |       |      | messages |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | M     | RIM  | \$49.95  |    |    | •  | E-mail messages |
|       | obile | 850, | u        |    |    |    | can be up to    |
|       | Mail  | RIM  | nlimited |    |    |    | 2,000           |
|       |       | 857  |          |    |    |    | characters      |
|       |       |      |          |    |    |    | long.           |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Black | RIM  | \$49.99  | •  |    | •  | Allows          |
|       | Berry | 850, | u        |    |    |    | integration     |
|       | by    | RIM  | nlimited |    |    |    | with existing   |
|       | S     | 857  |          |    |    |    | e-mail          |
|       | kyTel |      |          |    |    |    | accounts.       |
|       |       |      |          |    |    |    | Two-way         |
|       |       |      |          |    |    |    | messaging with  |
|       |       |      |          |    |    |    | other SkyTel    |
|       |       |      |          |    |    |    | and RIM users   |
|       |       |      |          |    |    |    | included.       |
+-------+-------+------+----------+----+----+----+-----------------+
| S     | Wir   | Mo   | From     |    | •  | •  | Calling plan    |
| print | eless | bile | \$9.99   |    |    |    | minutes can be  |
| PCS   | Web   | hand | with     |    |    |    | used for either |
|       | O     | sets | Sprint   |    |    |    | calls or        |
|       | ption |      | PCS      |    |    |    | Internet.       |
|       |       |      | calling  |    |    |    | Includes 50     |
|       |       |      | plan     |    |    |    | wireless web    |
|       |       |      |          |    |    |    | updates.        |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Wir   | Lap  | 39¢ per  |    | •  | •  | Uses Sprint PCS |
|       | eless | tops | minute   |    |    |    | phone and       |
|       | Web   | and  |          |    |    |    | connection kit  |
|       | Conne | h    |          |    |    |    | to wirelessly   |
|       | ction | andh |          |    |    |    | connect laptops |
|       |       | elds |          |    |    |    | and handhelds   |
|       |       |      |          |    |    |    | to the          |
|       |       |      |          |    |    |    | Internet.       |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Wir   | WAP  | From     | •  |    |    | Calling plan    |
|       | eless | -ena | \$5.00   |    |    |    | minutes can be  |
|       | Web   | bled | with     |    |    |    | used for either |
|       | Short | Mo   | Sprint   |    |    |    | calls or Short  |
|       | Mail  | bile | PCS      |    |    |    | Mail messages.  |
|       |       | hand | calling  |    |    |    | Messages are    |
|       |       | sets | plan or  |    |    |    | sent via email. |
|       |       |      | 39¢ per  |    |    |    |                 |
|       |       |      | minute   |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| Ve    | 2-Way | Mo   | 2¢       | •  |    |    | 120 character   |
| rizon | Text  | bile | send/10¢ |    |    |    | text messaging  |
| Wir   | Mess  | han  | receive  |    |    |    | on the Verizon  |
| eless | aging | dset |          |    |    |    | Wireless        |
|       |       |      | \$2.99   |    |    |    | network.        |
|       |       |      | for 100  |    |    |    |                 |
|       |       |      | messages |    |    |    |                 |
|       |       |      |          |    |    |    |                 |
|       |       |      | \$7.99   |    |    |    |                 |
|       |       |      | for 600  |    |    |    |                 |
|       |       |      | messages |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | M     | Mo   | \$6.95   |    | •  | •  | Allows users to |
|       | obile | bile | to       |    |    |    | customize       |
|       | Web   | han  | \$12.95  |    |    |    | content, either |
|       |       | dset | for web  |    |    |    | with a handset  |
|       |       |      | access   |    |    |    | or through a    |
|       |       |      | and 100  |    |    |    | wired PC at     |
|       |       |      | to 600   |    |    |    | MyVZW.com,      |
|       |       |      | alerts.  |    |    |    | Verizon's       |
|       |       |      |          |    |    |    | portal.         |
+-------+-------+------+----------+----+----+----+-----------------+
|       | M     | Kyo  | \$9.95   |    | •  | •  | Service for     |
|       | obile | cera |          |    |    |    | Smartphones.    |
|       | Web   | QCP- |          |    |    |    | Allows access   |
|       | Plus  | 6035 |          |    |    |    | to up to 6 POP3 |
|       |       | sm   |          |    |    |    | email accounts. |
|       |       | artp |          |    |    |    |                 |
|       |       | hone |          |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | Ex    | 1    | Plans    |    | •  | •  | Using the       |
|       | press | XRTT | start at |    |    |    | CDMA2000 1xRTT  |
|       | Ne    | mo   | \$35 for |    |    |    | network,        |
|       | twork | bile | 10 MB or |    |    |    | average data    |
|       |       | hand | \$30 for |    |    |    | rates are 40-60 |
|       |       | set, | u        |    |    |    | kbps. Verizon   |
|       |       | wire | nlimited |    |    |    | Wireless claims |
|       |       | less | d        |    |    |    | speeds up to    |
|       |       | m    | ownloads |    |    |    | 144 kbps.       |
|       |       | odem | when     |    |    |    |                 |
|       |       | card | p        |    |    |    |                 |
|       |       |      | urchased |    |    |    |                 |
|       |       |      | with a   |    |    |    |                 |
|       |       |      | voice    |    |    |    |                 |
|       |       |      | plan.    |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| V     | iS    | Sma  | \$2.99   | •  | •  | •  | Prices and      |
| oiceS | tream | rtph | for      |    |    |    | conditions vary |
| tream |       | one, | Sma      |    |    |    | by device. Each |
|       |       | PDA, | rtphones |    |    |    | plan includes   |
|       |       | and  |          |    |    |    | an allotment of |
|       |       | la   | \$19.99  |    |    |    | MB, and the     |
|       |       | ptop | for PDAs |    |    |    | option to use   |
|       |       |      |          |    |    |    | more MB for an  |
|       |       |      | \$39.99  |    |    |    | additional fee. |
|       |       |      | for      |    |    |    | Each plan also  |
|       |       |      | laptops  |    |    |    | includes 300    |
|       |       |      |          |    |    |    | Ping Pong text  |
|       |       |      |          |    |    |    | messages.       |
+-------+-------+------+----------+----+----+----+-----------------+
|       | AOL   | Mo   | \$2.99   | •  |    |    | Customers keep  |
|       | In    | bile | for 500  |    |    |    | in touch with   |
|       | stant | han  | messages |    |    |    | "buddies" using |
|       | Mess  | dset |          |    |    |    | AIM.            |
|       | enger |      |          |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
| We    | 2-Way | Moto | \$14.95  | •  |    |    |                 |
| bLink | Mess  | rola | -\$29.95 |    |    |    |                 |
| Wir   | aging | T900 | for      |    |    |    |                 |
| eless |       |      | 500-3000 |    |    |    |                 |
|       |       |      | messages |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+
|       | R     | Moto | \$2 in   |    |    | •  | Users can have  |
|       | emote | rola | addition |    |    |    | e-mail messages |
|       | E     | T900 | to 2-way |    |    |    | from existing   |
|       | -mail |      | m        |    |    |    | accounts        |
|       | Ma    |      | essaging |    |    |    | forwarded to    |
|       | nager |      | plan,    |    |    |    | the T900.       |
|       |       |      | free for |    |    |    |                 |
|       |       |      | "Deluxe" |    |    |    |                 |
|       |       |      | 2-Way    |    |    |    |                 |
|       |       |      | sub      |    |    |    |                 |
|       |       |      | scribers |    |    |    |                 |
+-------+-------+------+----------+----+----+----+-----------------+

Sources: The information provided above is illustrative of Internet
access services provided by mobile telephone operators in 2000 and
should not be considered an exhaustive list. Information is based on
publicly available company documents such as news releases, company web
sites, SEC filings, and newspaper and periodical articles.

**Table 3: Bluetooth-Enabled Devices**

+-------------------+-----------------------------+--------------------+
| ###               | **[Product                  | **[Product         |
| ###### [Company]{ | Name]{.underline}**         | T                  |
| .underline} {#com |                             | ype]{.underline}** |
| pany .unnumbered} |                             |                    |
+-------------------+-----------------------------+--------------------+
| ATO Technology    | ATO Bluetooth Headset       | Mobile phone       |
| Ltd.              |                             | accessory          |
+-------------------+-----------------------------+--------------------+
| Compaq            | iPAQ Pocket PC              | Mobile computer    |
+-------------------+-----------------------------+--------------------+
| Epson             | Print Adapter               | Office equipment   |
+-------------------+-----------------------------+--------------------+
| Ericsson          | Mobile Telephone T68i       | Mobile phone       |
+-------------------+-----------------------------+--------------------+
|                   | Bluetooth Headset HGH-20    | Mobile phone       |
|                   |                             | accessory          |
+-------------------+-----------------------------+--------------------+
| Fujitsu           | Modem Access Point          | Computer accessory |
+-------------------+-----------------------------+--------------------+
|                   | Data Access Point           | Office equipment   |
+-------------------+-----------------------------+--------------------+
| INVENTEL SYSTEMES | BlueDSL and EtherBlue       | Computer accessory |
+-------------------+-----------------------------+--------------------+
| Motorola          | Handsfree Car Kit           | Mobile phone       |
|                   |                             | accessory          |
+-------------------+-----------------------------+--------------------+
|                   | Timeport 270                | Mobile phone       |
+-------------------+-----------------------------+--------------------+
|                   | Phone Module and Phone      | Mobile phone       |
|                   | Module II                   | accessory          |
+-------------------+-----------------------------+--------------------+
|                   | Clip-on Accessory           | Mobile phone       |
|                   |                             | accessory          |
+-------------------+-----------------------------+--------------------+
| Nokia             | Models 6310 and 6310i       | Mobile phone       |
+-------------------+-----------------------------+--------------------+
|                   | Connectivity Battery        | Mobile phone       |
|                   |                             | accessory          |
+-------------------+-----------------------------+--------------------+
| Samsung           | Samsung Bluetooth PCS Phone | Mobile phone       |
+-------------------+-----------------------------+--------------------+
| Sony              | Digital Video Camera        | Cameras and video  |
|                   | Recorder                    |                    |
+-------------------+-----------------------------+--------------------+
| Toshiba           | Ubiquitous Headset          | Accessory          |
+-------------------+-----------------------------+--------------------+
|                   | Refrigerator-freezer        | Home environment   |
|                   |                             | equipment          |
+-------------------+-----------------------------+--------------------+

Sources: The information provided above is illustrative of the qualified
Bluetooth-enabled devices available from equipment manufacturers and
should not be considered an exhaustive list. Information is based on the
Bluetooth Qualification web site:
\<http://qualweb.opengroup.org/Template2.cfm?LinkQualified=QualifiedProducts\>.

**Table 4: Telemetry Services**

  --------------------------- ------------------------------------------------------
  **[Company]{.underline}**   **[Status]{.underline}**

  Schlumberger                5 million wireless telemetry customers in North
                              America connected as of February 2001.

  Itron                       Offers AMR exclusively; had connected 17.6 million AMR
                              units at YE 2001 to over 625 utilities in North
                              America.

  Aeris's MicroBurst          Leases the control channel of cellular networks from
                              cellular carriers covering all of North America.
                              During 2001, Aeris signed the following agreements
                              with telemetry providers: American Innovations Team to
                              monitor 2 million miles of gas and oil pipelines;
                              Notifact to allow Invensys Energy Systems to remotely
                              control and monitor lighting systems at Albertson's
                              250 supermarket locations in California; Beacon
                              Wireless Solutions to provide monitoring and security
                              services for boats.

  NumereX's Cellemetry Data   Leases capacity from cellular carriers covering 99
  Service                     percent of U.S. cellular markets. Provides two-way,
                              wireless data connectivity for a variety of
                              machine-to-machine communications that remotely
                              monitor, measure, or track fixed and mobile assets.
                              Numerex has signed agreements with Vermeer
                              Manufacturing allowing Vermeer to provide a fleet
                              management system in order to track and monitor its
                              equipment, and with InterTrak to provide security and
                              tracking support in the deployment of InterTrack's GPS
                              Satellite Tracking System.

  WebLink Wireless            Its telemetry business unit, Wireless Control Systems,
                              sells the use of its narrowband PCS spectrum for
                              remote monitoring services; has contracts to deploy
                              security alarm monitoring and HVAC control systems.

  Motient                     Offers telemetry services such as AMR, asset tracking,
                              and vending machine monitoring.

  Cingular Wireless           Resells Mobitex network to telemetry providers, such
                              as alarm, billboard sign, and vending machine
                              monitoring companies.

  SkyTel ReFLEX Telemetry     Offers telemetry services for nearly any type of
  Services                    machine measurement system, including utility meters,
                              vending machines, vehicles, and health care devices.
                              Uses narrowband PCS spectrum, satellite backhaul, and
                              CreataLink2 XT wireless data transceiver devices to
                              monitor and transmit remote data for its customers.
  --------------------------- ------------------------------------------------------

Sources: Information is based on publicly available documents such as
news releases, newspaper and periodical articles, company web pages, and
SEC filings.

**APPENDIX E:**

**MAPS**

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

Map 1: Mobile Telephone Operator Coverage Estimated by County E-2

Map 2: A-Side Cellular Coverage E-3

Map 3: B-Side Cellular Coverage E-4

Map 4: Mobile Telephony Penetration Estimated by Economic Area E-5

Map 5: Estimated Rollout with Any Digital Coverage E-6

Map 6: Estimated Rollout with CDMA-Based Coverage E-7

Map 7: Estimated Rollout with TDMA/GSM-Based Coverage E-8

Map 8: Estimated Rollout with iDEN-Based Coverage E-9

Map 9: Estimated Rollout of GPRS and cdma2000 1xRTT Networks E-10

Map 10: Lowerband Fixed Wireless Internet Access Rollout Estimated by
County E-11

Table 1: Geographic Licensing Schemes E-12

Map 11: Basic Trading Areas. E-13

Map 12: Major Trading Areas. E-14

Map 13: Cellular Market Areas. E-15

Map 14: Economic Areas. E-16

**Map 1**

![](media/image1.png){width="6.49375in" height="8.403472222222222in"}

**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="6.49375in" height="8.403472222222222in"}

**Map 5**

![](media/image6.png){width="6.49375in" height="8.403472222222222in"}

**Map 6**

![](media/image7.png){width="6.49375in" height="8.403472222222222in"}

**Map 7**

![](media/image8.png){width="6.49375in" height="8.403472222222222in"}

**Map 8**

![](media/image9.png){width="6.49375in" height="8.403472222222222in"}

**Map 9**

![](media/image10.jpeg){width="6.381944444444445in"
height="8.669444444444444in"}

**Map 10**

![](media/image11.wmf){width="6.273611111111111in"
height="8.052777777777777in"}

**Table 1: Geographic Licensing Schemes**

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

  Basic Trading Areas (BTAs)      493               BTAs make up MTAs

  Major Trading Areas (MTAs)      51                

  Cellular Market Areas (CMAs)    734               Also known as MSAs 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"}

[^1]: Commercial Mobile Services came to be known by the Commission as
    the Commercial Mobile Radio Services, or "CMRS."

[^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).

[^3]: *Id.* codified at 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, *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*").

[^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 product markets than any used,
    suggested, or implied in this report.

[^6]: 47 C.F.R. § 20.9(10).

[^7]: *See, e.g.,* Section II.b, Satellite Operators, *infra*, which
    includes a discussion of satellite services that are regulated as
    commercial mobile radio services as well as satellite services that
    may compete with CMRS, even though they are not subject to the CMRS
    rules.

[^8]: *See* Section II.b, Market Performance, *infra*, for a detailed
    discussion.

[^9]: *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* *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 transcript of
    the forum can be found at *Public Hearing for 7th Annual CMRS
    Competition Report: Transcript of the Day's Event* (visited Mar. 14,
    2002)
    \<http://wireless.fcc.gov/services/cmrs/presentations/020228.pdf\>
    ("*Transcript*").

[^10]: For purposes of this report, the Commission defines the mobile
    telephone segment to include the provision of mobile telephony
    services by cellular, broadband Personal Communications Services
    ("broadband PCS" or "PCS"), and digital Specialized Mobile Radio
    ("SMR") operators. The Commission recognizes that other formulations
    have been used in specific adjudications and that the Commission may
    determine in the future that these definitions should be revised.

[^11]: Mobile data service is the delivery of non-voice information to a
    mobile device and includes everything from paging messages to web
    access on a mobile phone to e-mail delivery.

[^12]: *See* Section A.(ii), Building Nationwide Networks, *infra*.

[^13]: 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.

[^14]: *See* Section II.B.1.a, Mobile Data Domestic Developments, and
    note Error: Reference source not found, *infra*.

[^15]: *See* Section II.B.1.a, Mobile Data Domestic Developments,
    *infra.*

[^16]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *infra*.

[^17]: *See* Section II.B.1.a, Mobile Data Domestic Developments,
    *infra.*

[^18]: The terms "PDA," "handheld," "handheld PDA," and "handheld
    device" are used interchangeably throughout this report.

[^19]: Most of the data in this report, except where noted, are taken
    from publicly-available sources. These sources include: trade
    associations, securities analysts, company releases and web sites,
    filings with the Securities and Exchange Commission ("SEC"),
    newspaper and periodical articles, and certain materials made
    available to the Commission that were prepared by research companies
    and consultants that study various aspects of the wireless industry.
    The accuracy of the data from these materials, however, was not
    independently verified by the Commission. The inclusion of these
    data in this report does not constitute a representation or warranty
    by the Commission of their accuracy or completeness.

[^20]: *See* Appendix C, Table 1, at C-2.

[^21]: *See* Section A.(i), Subscriber Growth, *infra*.

[^22]: *Id*.

[^23]: *See* Section A.(vi), Market Entry, *infra*, for a detailed
    discussion.

[^24]: *See* Appendix C, Table 4, at C-5.

[^25]: *Id.*

[^26]: *Id.*

[^27]: The four main digital technologies used in the United States are:
    Code Division Multiple Access ("CDMA"), Global System Mobile
    Communications ("GSM"), integrated Digital Enhanced Network
    ("iDEN"), and Time Division Multiple Access ("TDMA").

[^28]: *See* Section II.c, Digital Deployment, *infra*, for a detailed
    discussion.

[^29]: *See* Section II.d, Pricing Data and Trends, *infra*, for a
    detailed discussion of price competition.

[^30]: *Id.*

[^31]: *Id.*

[^32]: For purposes of this report, "advanced wireless services" is used
    to describe the next-generation mobile network technologies of GPRS
    and cdma2000 1xRTT (also referred to as "cdma2000 1X" or "1xRTT").
    This term is used because there is debate in the industry as to
    which next-generation mobile network upgrades constitute "3G." As
    explained in the *Sixth Report*, Third Generation, or "3G,"
    generally refers to high-speed advanced mobile data services and the
    next generation of technologies -- beyond the 2G technologies of
    CDMA, TDMA, GSM, and iDEN -- that will make such services possible.
    *See Sixth Report*, at 13356. 3G speeds are expected to reach 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. In the United
    States, GSM/TDMA carriers are deploying GPRS as an interim
    technology, also often referred to as a "2.5G" technology because
    most currently plan to use GPRS in migrating from 2G to 3G. GPRS is
    a packet-based data-only network upgrade that allows for faster data
    rates by aggregating up to eight 14.4 kbps channels. *See Fifth
    Report*, at 17700. *See also,* note Error: Reference source not
    found, *infra*. Most U.S. GSM/TDMA 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"). CDMA carriers are upgrading to cdma2000 1xRTT, a network
    technology that doubles voice capacity and allows maximum data
    throughput rates of up to 144 kbps. Many in the industry describe
    1xRTT as a 2.5G technology, while some CDMA carriers and equipment
    manufacturers characterize it as the first step in 3G deployment.
    Beyond 1xRTT, the major CDMA carriers have plans to build out
    cdma2000 EV-DO and/or cdma2000 1X-EV, which will reportedly increase
    maximum data transfer speeds to 2.4 Mbps. *See* Section II.B.2.a,
    Mobile Data Mobile Telephone Sector, *infra*, for a more detailed
    discussion.

[^33]: *See* Section II.B.2.b.(i), Smartphones, *infra*.

[^34]: *See Fourth Report*, at 10151-10152, and *Fifth Report*, at
    17668.

[^35]: *See* 47 C.F.R. §§ 22.900, 24.200, 90.601.

[^36]: *See* Appendix E, Table 1 and Maps 11-14, at E-12 -- E-16, for
    descriptions and maps of various geographical licensing schemes
    employed by the Commission.

[^37]: 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
    June 7, 2002)
    \<[http://wireless.fcc.gov/auctions/45/](http://wireless.fcc.gov/auctions/12/)\>.

[^38]: See Section II.c, Digital Deployment, *infra*.

[^39]: 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, Federal
    Communications Commission, June 23, 1995. The Commission has had
    five additional broadband PCS auctions. *See* Federal Communications
    Commission, *Completed Auctions* (visited Apr. 13, 2001)
    \<<http://www.fcc.gov/wtb/auctions/serv8.html>\>. 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.

[^40]: *See* *Sixth Report*, at 13368.

[^41]: The Commission's broadband PCS allocation includes 20 megahertz
    of spectrum at 1910 MHz - 1930 MHz for unlicensed broadband PCS.
    Unlicensed broadband PCS is used for short-range communications such
    as wireless private branch exchanges. Such systems operate with very
    low power and have a limit on the duration of transmissions.

[^42]: 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 Basic Trading Areas ("BTAs"). BTAs 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. 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.

[^43]: 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).

[^44]: 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").

[^45]: The Commission has held multiple auctions for SMR licenses. FCC,
    *FCC Auctions* (visited Mar. 7, 2002)
    \<http://wireless.fcc.gov/auctions/\>.

[^46]: 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.

[^47]: *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).

[^48]: 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.

[^49]: *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.

[^50]: 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, *Comments*, WT
    Docket No. 00-193, 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.

[^51]: "Trunked" dispatch, which refers to dispatch offered on systems
    allowing automatic sharing of multiple radio channels, is available
    on spectrum allocated in the 217-219, 220-222, and 450-470 MHz
    frequency bands. *See Motorola Order*, at 8460-8462 for a detailed
    discussion.

[^52]: *Id*., at 8462-8463.

[^53]: Some markets may have fewer than eight active licenses because
    certain auction winners have defaulted on payments to the
    Commission, because some licensees did meet their buildout
    requirements, because some licensees returned their licenses, or
    because some licenses went unsold in auction.

[^54]: 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
    partioning and disaggregation, there often are more than eight
    cellular and broadband PCS licenses in a market.

[^55]: No more than 10 megahertz of SMR spectrum is attributable to an
    entity under the cap. 47 C.F.R. § 20.6(b).

[^56]: 47 C.F.R. § 20.6(a).

[^57]: 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.

[^58]: *Spectrum Cap Order*, at 22669-22670.

[^59]: Sprint PCS is a division of Sprint Corp. ("Sprint"). *See* Sprint
    Corp., SEC Form 10-K, Mar. 4, 2002, at 3.

[^60]: 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.

[^61]: VoiceStream is a wholly-owned subsidiary of Deutsche Telekom AG
    ("Deutsche Telekom"). *See Sixth Report*, at 13364. Deutsche Telecom
    is in the process of phasing out its VoiceStream brand in favor of
    its worldwide "T-Mobile" name, to be completed by the end of 2002.
    *T-Mobile replaces VoiceStream By Year's End*,
    [WirelessNow]{.smallcaps}, Feb. 15, 2002 (citing a report in [The
    Seattle Times]{.smallcaps}).

[^62]: Cingular Wireless is a joint venture of SBC Communications, Inc.
    ("SBC") and BellSouth Corporation ("BellSouth"). *See* *Sixth
    Report*, at 13363-64.

[^63]: In addition, based on FCC internal analysis, the six national
    operators, including affiliates and partnerships, have licenses
    covering between 230 and 285 million people, while the next largest
    provider of mobile telephone service has licenses covering less than
    60 million people.

[^64]: *See* *Fifth Report*, at 17669.

[^65]: For a discussion of DOR plans, *see* *Fifth Report*, at
    17675-17676; *Fourth Report*, at 10155-10156. *See* *also* Section
    A.(i), Developments in Pricing Plans, *infra*.

[^66]: 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.

[^67]: For a more complete discussion of the motivations for this
    phenomenon, s*ee Fourth Report*, at 10159-10160.

[^68]: *AT&T Wireless Completes TeleCorp PCS Acquisition*, News Release,
    AT&T Wireless, Feb. 12, 2002. The Commission gave its consent to the
    transaction in February 2002. Wireless Telecommunications Bureau and
    International Bureau Grant Consent For Transfer Of Control Or
    Assignment Of Licenses From Telecorp PCS, Inc. to AT&T Wireless
    Services, Inc., *Public Notice*, DA 02-331 (rel. Feb. 12, 2002).

[^69]: *AT&T Wireless To Acquire TeleCorp PCS*, News Release, AT&T
    Wireless, Oct. 8, 2001.

[^70]: *Id*.

[^71]: 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.

[^72]: *AT&T Wireless To Acquire TeleCorp PCS*, News Release, AT&T
    Wireless, Oct. 8, 2001.

[^73]: AT&T Wireless, SEC Form 10-k405, Mar. 28, 2002, at 2.

[^74]: *See Sixth Report*, at 13364. The Commission granted consent for
    the transaction in March 2001. Wireless Telecommunications Bureau
    and International Bureau Grant Consent For Assignment or Transfer of
    Control of Wireless Licenses and Authorizations from Price
    Communications Corporation to Cellco Partnership d/b/a Verizon
    Wireless, *Public Notice*, DA 01-791 (rel. Mar. 30, 2001).

[^75]: *Verizon Wireless, Price Communications to Combine Certain
    Business Operation,* News Release, Verizon Wireless, Dec. 19, 2001.

[^76]: *UbiquiTel Becomes Second Largest Sprint PCS Network Partner with
    Completion of Acquisition of VIA Wireless*, News Release, UbiquiTel,
    Aug. 13, 2001. VIA also had spectrum licenses in Oklahoma and
    Pennsylvania. *UbiquiTel to Sell Spectrum*, News Release, UbiquiTel,
    Mar. 6, 2001. The Commission consented to this transaction in July
    2001. Wireless Telecommunications Bureau Grants Consent to Transfer
    Control Of A, C, and F Block Broadband PCS Licenses and Common
    Carrier Fixed Point to Point Microwave Service, *Public Notice*, DA
    01-1707 (rel. July 16, 2001).

[^77]: *UbiquiTel Becomes Second Largest Sprint PCS Network Partner with
    Completion of Acquisition of VIA Wireless*, News Release, UbiquiTel,
    Aug. 13, 2001. The acquisition cost Ubiquitel about \$150 million in
    stock and assumed debt. *Id*. Based on UbiquiTel's \$8 closing price
    on August 13, 2001, the deal valued VIA at \$156.2 million.
    *UbiquiTel Buys VIA Wireless*, [Dow Jones News Service]{.smallcaps},
    Aug. 13, 2001. In October 2001, UbiquiTel raised \$50 million by the
    sale of VIA's California spectrum to VoiceStream. *UbiquiTel to Sell
    Spectrum*, News Release, UbiquiTel, Mar. 6, 2001; *UbiquiTel
    Completes Sale of Spectrum to VoiceStream for \$50 Million*, News
    Release, UbiquiTel, Oct. 22, 2001. The Commission consented to the
    transaction in August 2001. Wireless Telecommunications Bureau
    Grants Consent to Assign A, C and F Block Broadband PCS Licenses,
    *Public Notice*, DA 01-2012 (rel. Aug. 24, 2001). UbiquiTel is able
    to continue operations in California through its affiliation with
    Sprint PCS. *See* Section 1.(d), Affiliations, *infra*.

[^78]: *AirGate PCS, Inc. Completes Merger With iPCS, Inc.*, News
    Release, AirGate, Nov. 30, 2001; *AirGate PCS to Combine With iPCS
    for \$900 Million to Create The Premier Sprint PCS Network Partner*,
    News Release, AirGate, Aug. 29, 2001.

[^79]: *AirGate PCS to Combine With iPCS for \$900 Million to Create The
    Premier Sprint PCS Network Partner*, News Release, AirGate, Aug. 29,
    2001. The transaction, involving the swap of 13.5 million shares of
    AirGate stock for iPCS stock and the assumption of \$97 million of
    iPCS debt, was valued at \$900 million when the deal was announced
    in August 2001. *Id*.

[^80]: *US Unwired Completes Acquisition of Georgia PCS*, News Release,
    US Unwired, Mar. 15, 2002; *US Unwired Completes Acquisition of IWO
    Holdings*, News Release, US Unwired, Apr. 2, 2002.

[^81]: Subscriber numbers for IWO (125,000) and US Unwired (236,000) are
    as of September 30, 2001 and December 31, 2001 for Georgia PCS
    (36,600). *See* *US Unwired to Acquire Georgia PCS*, News Release,
    US Unwired, Feb. 11, 2002; *US Unwired to Acquire IWO Holdings*,
    News Release, US Unwired, Dec. 20, 2001.

[^82]: *US Unwired to Acquire Georgia PCS*, News Release, US Unwired,
    Feb. 11, 2002.

[^83]: *ALLTEL to Purchase CenturyTel\'s Wireless Properties for \$1.65
    billion*, News Release, ALLTEL, Mar. 19, 2002. In 2001, ALLTEL made
    an unsolicited \$6.1 billion bid for all of CenturyTel, but the
    offer was rejected. [Communications Daily]{.smallcaps}, Mar. 20,
    2002.

[^84]: Also included in the transaction are minority partnership
    interests in cellular operations of 2 million POPs, and PCS licenses
    covering 1.3 million POPs in Wisconsin and Iowa.

[^85]: Wireless Telecommunications Bureau Grants Consent for the
    Transfer of Control of Licenses from Centurytel, Inc. to ALLTEL
    Communications, Inc., *Public Notice*, DA 02-1366 (rel. June 12,
    2002).

[^86]: *U.S. Cellular Enters into Agreement to Purchase PrimeCo
    Wireless*, News Release, U.S. Cellular, May 10, 2002.

[^87]: *Id*.

[^88]: Application of Pacific Wireless, Inc. and Nextel of California,
    Inc. for Assignments of Authorization, *Application,* ULS file no.
    0000523796 (filed July 27, 2001) ("*PWT Application*"). The
    Commission consented to the transaction in November 2001.
    Application of Pacific Wireless Technologies, Inc. and Nextel of
    California, Inc. for Consent to Assignment of Licenses, *Memorandum
    Opinion and Order*, 16 FCC Rcd 20341(2001).

[^89]: Application of Pacific Wireless, Inc. and Nextel of California,
    Inc. for Assignments of Authorization, *Consummation Notice*, ULS
    file no. 0000738671 (filed Jan 18. 2002).

[^90]: *PWT Application*, Attachment 2, Public Interest Statement, at 4.

[^91]: *Id*.

[^92]: *Id*.

[^93]: *Id*.

[^94]: *Cingular, VoiceStream to Share Wireless Networks in New York,
    California and Nevada*, News Release, Cingular, Oct. 15, 2001.

[^95]: *AT&T Wireless and Cingular Wireless Announce Major Expansion of
    GSM/GPRS Network Coverage Via New Joint Venture*, News Release, AT&T
    Wireless, Jan. 28, 2002.

[^96]: *AT&T Wireless Is Separate, Independently-Traded Company,
    Following Split-off From AT&T*, News Release, AT&T Wireless, July 9,
    2001.

[^97]: During late April 2000, AT&T raised \$10.6 billion in its initial
    public offering of 360 million shares of AT&T Wireless Group
    tracking stock. *AT&T Closes Wireless Offering*, News Release, AT&T
    Wireless, May 2, 2000.

[^98]: *AT&T Completes Disposition of Its Remaining Interest in AT&T
    Wireless*, News Release, Dec. 24, 2001.

[^99]: *See* Section A.(ii), Roaming, *infra*.

[^100]: *See*, *e.g.*, Nextel, Automatic and Manual Roaming Obligations
    Pertaining to Commercial Mobile Radio Services, *Comments*, WT
    Docket No. 00-193, 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.").

[^101]: 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, SEC Form 10-K, Apr. 1, 2002, at 72.
    Dobson operates the ACC markets under the brand name Cellular One.
    Dobson, SEC Form 10-K, Apr. 1, 2002, at 3 and 8. AT&T Wireless owns
    approximately 12 percent of Dobson. AT&T Wireless, SEC Form 10-K405,
    Mar. 28, 2002, at 62. 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. 16, 2001, at 4. 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) and Lewis &
    Clark Communications, LLC (49.9 percent). AT&T Wireless, FCC Form
    602 (filed Mar. 6, 2002).

[^102]: AT&T Wireless owns 15.7 percent of Triton PCS and 40 percent of
    Edge. AT&T Wireless, FCC Form 602 (filed Mar. 6, 2002).

[^103]: Suncom, *Suncom Fact Sheet* (visited Mar. 8, 2002)
    \<http://www.suncom.com/pr_news/index.html\>.

[^104]: As of the end of 2001. *See* Section 1.(a), Combinations,
    *supra*. For a list of Sprint PCS affiliates and their service
    territories, *see* Dan Myer, *US Unwired Adds Georgia PCS To Fold*,
    [RCR Wireless News]{.smallcaps}, Feb. 18, 2002, at 14.

[^105]: *See*, *e.g.*, US Unwired Inc., SEC Form 4249(B)(1), May 17,
    2000, at 7.

[^106]: Ric Prentis, *Sprint PCS*, Equity Research, Raymond James, Feb.
    19, 2002, at 4.

[^107]: *Id*.

[^108]: *Sprint Wireless Affiliate Program Exceeds Two Million
    Subscribers*, News Release, Sprint PCS, Jan. 7, 2002.

[^109]: Nextel Partners, SEC Form 10-K, Mar. 22, 2002, at 3. As of the
    end of 2001, Nextel owned 32.3 percent of the common stock of Nextel
    Partners. *Id.*, at 2.

[^110]: *Id.*, at 3.

[^111]: *See* Section II.d, Pricing Data and Trends, *infra*.

[^112]: Carriers began reporting NRUF data biannually beginning with the
    period ending June 2000. The Commission has another source of mobile
    wireless subscribership data in addition to the NRUF data. Since the
    Commission's local competition and broadband data gathering program
    was adopted in March 2000, mobile wireless carriers with over 10,000
    facility-based subscribers in a state have been required to report
    the number of their subscribers in those states twice a year to the
    Commission. In their June 30, 2001 filings, operators reported that
    they served 114 million subscribers. *See* Appendix C, Table 2, at
    C-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).

[^113]: 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.*

[^114]: 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.

[^115]: For example, in the survey for the period ending June 30, 2001,
    subscribers captured through survey response made up 109,674,358 out
    of a total subscriber estimate of 118,397,734, a difference of 8
    percent (8,723,376). CTIA, *Wireless Industry Indices: Semi-Annual
    Data Survey Results* (results through June 2001) ("*June 2001 CTIA
    Survey*"), at 15.

[^116]: 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 30,000 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.

[^117]: Subscribers refer to the number of separate wireless accounts. A
    particular individual may have more than one wireless account.

[^118]: Federal Communications Commission, based on preliminary year-end
    2001 filings for Numbering Resource Utilization in the United
    States.

[^119]: 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, 2001
    was estimated to be 288.6 million. *See* U.S. Census Bureau,
    *Population Estimates* (visited Mar. 8, 2002)
    \<http://eire.census.gov/popest/estimates.php\>.

[^120]: *See* Appendix C, Table 1, at C-2.

[^121]: *Id*.

[^122]: 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\>.

[^123]: Kenneth P. Johnson, *Redefinition of the BEA Economic Areas*,
    [Survey Of Current Business]{.smallcaps}, Feb. 1995, at 75.

[^124]: *See, also,* Appendix E, Map 4, at E-5.

[^125]: *June 2001 CTIA Survey* (minutes of use through 2000), at 169;
    Todd Rethemeier *et al.*, *Talk is Cheaper, Demand is Steeper*, Bear
    Sterns, Equity Research, May 21, 2002, at 1 (citing CTIA 2001 MOU
    results). 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.

[^126]: Paul Kagan Associates, Inc., *Wireless Customers Using 60% More
    Minutes than Two Years Ago -- Not Always On Plan*, [Wireless Market
    Stats]{.smallcaps}, Sept. 11, 2001, at 4 (based on carriers'
    reported MOUs); Paul Kagan Associates, Inc., *Minutes Up By 28% in
    Quarter; Acquisition Costs Continue Decline*, [Wireless Market
    Stats]{.smallcaps}, Aug. 14, 2000, at 6.

[^127]: *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); *Wireless Usage Continues to Climb as Flat-Rate Pricing
    And Free Minutes Become More Prevalent in the Marketplace*, News
    Release, J.D. Power and Associates, Sept. 26, 2000.

[^128]: There are different ways of calculating ARPU. The measure used
    here, CTIA's "average local monthly bill," does not include toll or
    roaming revenues. *June 2001 CTIA Survey*, at 158. CTIA defines an
    alternative measure of ARPU, which includes roaming revenues but not
    toll revenue. For a comparison between these two measures, *see*
    *June 2001 CTIA Survey*, at 159.

[^129]: *See* Appendix C, Table 1, at C-2.

[^130]: *See* Section II.d, Pricing Data and Trends, *infra*.

[^131]: Regardless of whether customers use the large bundles of minutes
    included with such plans, the higher monthly access fees increase
    operators' ARPUs.

[^132]: This assumes that each churned customer is a unique individual
    and that the same customers do not churn multiple times.

[^133]: *See* Linda J. Mutschler *et al.*, *The Next Generation VI:
    Wireless in the US*, United States Telecom
    Services-Wireless/Cellular, Merrill Lynch, Mar. 8, 2002 ("*NextGen
    VI"*), at 85 (Table 24: US Wireless Operating Matrix -- Monthly
    Churn). Churn also varies by locality. According to one survey, in
    the second quarter of 2001, Chicago had churn of 4.5 percent; Los
    Angeles, 3.5 percent; New York, 3.1 percent; San Francisco, 2.8
    percent; and Washington, 2.7 percent. Tim Race, *Drilling Down /
    Cell Phones*, [New York Times]{.smallcaps}, Sept. 3, 2001 (citing a
    survey by Telephia).

[^134]: Michael I. Rollins *et al.*, *Wireless Services*, Equity
    Research, Salomon Smith Barney, Jan. 11, 2002, at 9 ("*SSB Wireless
    Services*").

[^135]: *See Sixth Report*, at 13372-73.

[^136]: *Churn Analysis II: Main Reason For Switching Carriers*,
    Telephia, Oct. 10, 2001 (published in [WirelessWeek]{.smallcaps},
    available at
    \<http://www.wirelessweek.com/index.asp?layout=Research&doc_id=49067&ResearchParam=Research+Article&vertical=Telephia&verticalid=594\>).

[^137]: *Id.*

[^138]: 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.

[^139]: All population figures are based on the Bureau of the Census's
    2000 county population.

[^140]: *See* Appendix E, Maps 2-3, at E-3 - E-4.

[^141]: *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 CMA in which they were licensees. *Id*.

[^142]: *See* Appendix C, Table 4, at C-5.

[^143]: *Id.*

[^144]: *Id.*

[^145]: Only 3 percent, due to its previous high level of 90.8 percent.
    *See Sixth Report*, at 13465.

[^146]: *Id.*

[^147]: 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 big as 20 miles across, or any size in between. 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 phone network. 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.

[^148]: *See Sixth Report*, at 13361.

[^149]: *NextGen VI*, at 69. In the *Sixth Report*, the Commission
    estimated year-end 2000 digital penetration to be 62 percent. *See*
    *Sixth Report*, at 13374.

[^150]: Based on *NextGen VI* digital penetration rates.

[^151]: Subscribers that can access both the digital and analog networks
    of carriers are considered to be digital subscribers.

[^152]: *NextGen VI*, at 69.

[^153]: Ninety-six percent of Cingular's minutes of use were digital at
    the end of 2001. Frank G. Louthan IV, *SBC Communications*, Equity
    Research, Raymond James, Feb. 11, 2002, at 19.

[^154]: *NextGen VI*, at 69.

[^155]: Operators serving rural areas are converting their networks to
    digital technology as well. Ken Johnson of Rural Telecommunications
    Group ("RTG") said, "For their part, rural carriers are shifting to
    digital roll out." *Transcript*, at 100.

[^156]: *NextGen VI*, at 69.

[^157]: *NextGen VI*, at 69. CenturyTel went from 19 percent to 32
    percent, while Western Wireless went from 3 percent to 30 percent.
    *Id*.

[^158]: *See Fourth Report*, at 10170.

[^159]: Cingular announced in January 2002 that it had begun field
    testing a new technology, known as GAIT (GSM/ANSI-136
    Interoperability Team), that allows users to move with one handset
    between TDMA and GSM technologies on both broadband PCS and cellular
    spectrum bands. *Network Enhancements to Enable Cingular Customers
    to Access Both GSM and TDMA*, News Release, Cingular, Jan. 16, 2002.

[^160]: *Universal Wireless Communications Consortium Completes
    Organizational Objectives*, News Release, Universal Wireless
    Communications Consortium, Dec. 26, 2001. In March 2002, a number of
    wireless carriers and equipment manufactures, including AT&T
    Wireless and Cingular, formed a new trade association, called 3G
    Americas, to promote the GSM and TDMA family of technologies. *3G
    Americas to Represent Global Technologies in the Americas*, News
    Release, 3G Americas, Mar. 13, 2002.

[^161]: *See* *Sixth Report*, at 13398-99. AT&T Wireless has indicated
    that it does not plan to aggressively migrate users to its GSM
    network. Paul Wuh *et al*., *AT&T Wireless Group*, Global Equity
    Research, Goldman Sachs, Feb. 8, 2002, at 4 ("*Goldman Sachs AT&T
    Wireless Group*").

[^162]: *Goldman Sachs AT&T Wireless Group*, at 2.

[^163]: AT&T Wireless indicated that it would begin to deploy GSM/GPRS
    infrastructure in TeleCorp's coverage area beginning in the second
    half of 2002. *Id.*, at 10.

[^164]: *Cingular Moves to the Edge*, News Release, Cingular, Oct. 30,
    2001; *Cingular Announces Technology Path*, speech by Stephen Carter
    at the Righa Royal Hotel, New York, NY, Oct. 30, 2001 (*available
    in* http://www.cingularwireless.com/about/speech_01_10_30).

[^165]: Ric Prentiss, *Cingular Announced GSM Overbuild Plans*, Email
    Alert, Raymond James, Oct. 30, 2001.

[^166]: *Cingular Moves to the Edge*, News Release, Cingular, Oct. 30,
    2001

[^167]: Ric Prentiss, *Cingular Clues Us In on '02 CapEx Plans*, Equity
    Research, Raymond James, Nov. 6, 2001

[^168]: *See* Section 1.(b), Joint Ventures, *supra*. Dobson, whose two
    largest roaming partners are AT&T Wireless and Cingular, announced
    in January 2002 that it too planned to upgrade its TDMA network to
    GSM/GPRS. *Dobson To Upgrade Network to Wireless Standard*,
    [Reuters]{.smallcaps}, Jan. 29, 2002.

[^169]: The broadband PCS-based and digital SMR-based coverage is
    estimated using counties, and the cellular-based coverage is
    estimated using CMAs. The same caveats mentioned in Section A.(vi),
    Market Entry, *supra*, apply to this analysis as well.

[^170]: *See* Appendix E, Maps 5-8, at E-6 -- E-9.

[^171]: *See* Appendix C, Table 7 at C-10. Upgrades by carriers to GPRS
    and 1xRTT technologies are discussed in Section II.B.2.a, Mobile
    Data Mobile Telephone Sector, *infra*.

[^172]: *See* Appendix C, Table 7 at C-10.

[^173]: *NextGen VI*, at 2 ("There is no question that wireless pricing
    remains incredibly competitive"); *NextGen VI*, at 3 ("in recent
    quarters, we estimate that the level of pricing competition has
    accelerated, and we currently see no end in sight"); Olga Kharif,
    *Why Sprint PCS Could Pick Up Speed*, [BusinessWeek
    Online]{.smallcaps}, Mar. 13, 2002 ("Price competition has grown
    intense"); Tish Williams, *Wireless Now Has Price War to Worry
    About*, [TheStreet.com]{.smallcaps}, Mar. 3, 2002; Paul Wuh *et
    al.*, *Week In Wireless*, Global Equity Research, Goldman Sachs,
    Feb. 8, 2002, at 1 ("we believe that the national carriers are
    continuing to become more aggressive about pricing").

[^174]: *See Fourth Report*, at 10164-10165.

[^175]: *Econ One Survey Shows Average Cost of Cell Phone Service
    Dropped 7.3 % in 2001*, News Release, Econ One, Jan. 31, 2002. The
    survey is based on an analysis of pricing plan data collected from
    carriers' websites. *Transcript*, at 78.

[^176]: This does not include any additional costs for roaming or long
    distance.

[^177]: The analysis assumes a 70 percent peak /30 percent off-peak
    split in the kind of minutes used. *Transcript*, at 78.

[^178]: *Econ One Survey Shows Average Cost of Cell Phone Service
    Dropped 7.3 % in 2001*, News Release, Econ One, Jan. 31, 2002.

[^179]: *Id*.

[^180]: *See* Appendix C, Table 8, at C-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 1998, 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.

[^181]: *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\>.

[^182]: Adam Quinton *et al*, *Wireless Matrix -- 3Q01*, Global Equity
    Research, Merrill Lynch, Jan. 2002, at 4 ("*Wireless Matrix*").

[^183]: 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*.

[^184]: *See* Appendix C, Table 9, at C-11.

[^185]: *See AT&T Launches First National One-Rate Wireless Service
    Plan*, News Release, AT&T Corp., May 7, 1998.

[^186]: *See* *NextGen VI*, at 57-63.

[^187]: *Id.*, at 18.

[^188]: *Id*.

[^189]: 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.

[^190]: In the fourth quarter of 2001, roaming revenues accounted for 25
    percent of total revenue for Rural Cellular Corp. and 20 percent for
    Western Wireless. Dan Meyer, *Rural Carriers Overlay to Keep Roaming
    \$\$,* [RCR Wireless News]{.smallcaps}, Mar. 4, 2002, at 1. In fact,
    the price of Western Wireless stock fell 30 percent when AT&T
    Wireless and Cingular announced their infrastructure sharing
    agreement (see above). *Western Wireless Stock Off More Than 30
    Percent*, [Reuters]{.smallcaps}, Jan. 28, 2002. Investors feared
    that Western Wireless's roaming revenues were likely to decline as a
    result of the deal. *Id*.

[^191]: *See* Appendix C, Table 1, at C-2.

[^192]: *June 2001 CTIA Survey*, at 65.

[^193]: *Id.*

[^194]: *See*, *e.g*., Yukari Iwatani, *AT&T Wireless Sees Potential in
    Prepayments*, [Reuters]{.smallcaps}, July 26, 2001. Prepaid programs
    are considered to have been the primary driver of the rapid
    penetration gains in Europe over the past couple of years. *NextGen
    VI*, at 16.

[^195]: *See* *SSB Wireless Services*, at 5; *NextGen VI*, at 16. In its
    July analyst conference, for example, AT&T Wireless "took great
    pains" to emphasize that prepaid programs will not be a dominant
    part of its subscriber base, so that "subscriber quality" will
    remain high. Frank Marsala and Dae B. Rao, *AT&T Wireless*, Equity
    Research, Robertson Stephens, Sept. 7, 2001, at 1.

[^196]: Paul Wuh *et al*., *Telecom Services: Wireless Communications*,
    Global Equity Research, Goldman Sachs, Dec. 12, 2001, at 1 (8
    percent); *New Telephia/Harris Interactive Analysis Gives Wireless
    Carriers National Perspective on Customer Acquisition and Retention,
    News Release*, Telephia, Aug. 27. 2001 (10 percent). The Telephia
    survey also found that 16 percent of new subscribers were prepaid.
    *Id*. For 2000 percentage, *see* *Sixth Report,* at 13380.

[^197]: Ric Prentiss and Tanya Nelson, *Wireless Holiday Songs*,
    Industry Report, Raymond James & Associates, Dec. 20, 2001, at 5.
    Nextel does not offer prepaid plans. Nextel, *Compare Rate Plans*
    (visited Mar. 20, 2002)
    \<http://www.nextel.com/phone_services/rates/rateplancomparison.shtml\>.

[^198]: Paul Wuh and Seung Hoon Han, *Sprint PCS Group*, Global Equity
    Research, Goldman Sachs, Nov. 7, 2001, at 2 ("*Goldman Sachs Sprint
    PCS Report*"*)*. Sprint PCS's slogan for the program is "Clear Pay
    -- The Clear Alternative to Prepaid." *SSB Wireless Services*, at
    14.

[^199]: *NextGen VI*, at 19. Approximately one-third of the U.S.
    consumer market has sub-prime credit. *SSB Wireless Services*, at
    28.

[^200]: Paul Wuh *et al.*, *Analysis of Prepaid Business Model*, Global
    Equity Research, Goldman Sachs, June 14, 2001, at 13.

[^201]: *Goldman Sachs Sprint PCS Report*, at 2. Sprint PCS eliminated
    the deposit requirement in June 2001, but reinstated it in February
    2002 due to high churn and default rates associated with ASL
    customers. Paul Kagan Associates, Inc., *No-Deposit Plans Still
    Driving Up Sprint Churn*, [Wireless Market Stats]{.smallcaps}, Mar.
    26, at 6.

[^202]: *See*, *e.g.*, *Goldman Sachs Sprint PCS Report*, at 2.

[^203]: Gross additions includes sales to both new and existing
    subscribers.

[^204]: Paul Wuh *et al.*, *Week in Wireless*, Global Equity Research,
    Goldman Sachs, Feb. 6, 2002, at 2.

[^205]: *See* *Sixth Report*, at 13381.

[^206]: Margaret Schoener, *U.S. Residential Wireless Voice Access Lines
    Head South, Revenue Heads North*, Gartner, Inc., Aug. 31, 2001,
    at 1. Another study found that 52 percent of households in the 25
    largest U.S. markets use wireless phone service. *Wireless Phone
    Penetration Among U.S. Household Climbs above 50 Percent As More
    First-Time Subscribers Enter the Marketplace*, News Release, J.D.
    Power and Associates, Sept. 26, 2001.

[^207]: GenWireless.Com, *Mobile Penetration by Age* (visited Jun 12,
    2002 ) \<http://www.genwireless.com/stats.html\> (describing a
    November 2001 survey commissioned by Upoc, a "a mobile marketing and
    community developer"). The breakdown by age: 12-17, 51 percent;
    18-24, 61 percent; 25-29, 60 percent; 30-34, 69 percent; 35-54, 62
    percent; 55 and older, 50 percent. *Id.*

[^208]: *Carriers Said to Need New Tactics to Combat LD Substitution*,
    [Communications Daily]{.smallcaps}, Mar. 15, 2002 (citing Yankee
    Group analyst Knox Bricken's estimate of 3 percent). According to
    CTIA, about 2.2 percent of people in the United States have
    abandoned their wireline phones in favor of wireless phones or other
    wireless devices, which translates into roughly 5 percent of all
    wireless subscribers. Yuki Noguchi, *More Cell-Phone Users Cut Ties
    to Traditional Service*, [Washtech.com]{.smallcaps}, Dec. 27, 2001
    (citing CTIA).

[^209]: *Carriers Said to Need New Tactics to Combat LD Substitution*,
    [Communications Daily]{.smallcaps}, Mar. 15, 2002 (citing Yankee
    Group analyst Knox Bricken).

[^210]: Michelle Kessler, *18% See Cellphones as Their Main Phone*, [USA
    Today]{.smallcaps}, Feb. 1, 2002.

[^211]: *NextGen VI*, at 33.

[^212]: *Id.*, at 34.

[^213]: Yuki Noguchi, *Verizon Connections Decline*, [Washington
    Post]{.smallcaps}, Sept. 11, 2001 (*available in* 2001 WL 22754735)
    (citing Verizon President and Co-Chief Executive Officer Ivan
    Seidenberg). In the same vein, Duane Ackerman, Chairman and Chief
    Executive Officer of BellSouth said: "Wireless substitution is now a
    fact." Shawn Young, *More Callers Cut Off Second Phone Lines for
    Cellphones, Cable Modems*, [Wall Street Journal]{.smallcaps}, Nov.
    15, 2001, at B1. He added, "That's okay. We tend to own both." *Id.*

[^214]: *It's a Wireless Boom as More People Cut the Cord*, News
    Release, International Data Corp. ("IDC"), Jan. 8, 2002. Another
    study estimates that 2 million households replaced an access line
    with a wireless phone in the first six months of 2001. Margaret
    Schoener, *U.S. Residential Wireless Voice Access Lines Head South,
    Revenue Heads North*, Gartner, Inc., Aug. 31, 2001, at 1.

[^215]: *SBC Adjusts Prices to Maintain Payphone Base*, News Release,
    SBC, July 6, 2001; *Verizon Raises Price of Local Payphone Call;
    Announces Return of the 10-Cent Call in Some Markets*, News Release,
    Verizon, Sept. 7, 2001.

[^216]: *Verizon Tests Lower Prices for Local Payphone Calls*, News
    Release, Verizon, Jan. 29, 2002.

[^217]: *Sixth Report*, at 13381.

[^218]: *NextGen VI*, at 33.

[^219]: *Id.*, at 57-63.

[^220]: *Carriers Said to Need New Tactics to Combat LD Substitution*,
    [Communications Daily]{.smallcaps}, Mar. 15, 2002 (citing Yankee
    Group analyst Knox Bricken).

[^221]: *AT&T Announces 1Q 2002 Earnings*, News Release, AT&T Corp.,
    Apr. 24, 2002.

[^222]: *See* Cingular, *Cingular Wireless* (visited Mar. 21, 2002)
    \<http://www.cingular.com/\>.

[^223]: Leap, *Welcome to Cricket Communications* (visited Mar. 20,
    2002) \<<http://www.cricketcommunications.com/>\>.

[^224]: *Leap Reports Results for Fourth Quarter and Fiscal Year 2001*,
    News Release, Leap, Feb. 11, 2002.

[^225]: The monthly fee, paid in advance, varies slightly by service
    area. The service is offered without a term contract and requires no
    credit check. Leap Wireless International Inc., SEC Form 10-Q, Nov.
    13, 2001, at 21. Leap emphasizes that its Cricket service is not a
    prepaid program, but rather, "pay-in-advance," like cable TV. The
    pay-in-advance model has the recurring revenue of customers paying
    every month, as opposed to the random refill patterns of someone
    using prepaid service. Pay-in-advance is considered more desirable
    than prepaid, since customers who receive a monthly bill are more
    likely to pay it, resulting in less churn and higher ARPUs, and thus
    greater profitability per customer. Frank Marsala and Dave B. Rao,
    *Leap Wireless*, Telecom Services Research, Robertson Stephens, Oct.
    25, 2001, at 3.

[^226]: Todd J. Rethemeier *et al.*, *Leap Wireless International Inc.*,
    Equity Research, Bear Stearns, Feb 1, 2002, at 13.

[^227]: Leap Wireless International, Inc. Request for Waiver and
    Extension of the Broadband PCS Construction Requirements of
    Commission Rule 24.203(a) and (b), FCC File No. 0000436815 (filed
    Apr. 26, 2001), at 2; *Leap Reports Results for Fourth Quarter and
    Fiscal Year 2001*, News Release, Leap, Feb. 11, 2002 (average usage
    in its one-year or older markets).

[^228]: Frank Marsala and Dae B. Rao, *Leap Wireless*, Equity Research,
    Robertson Stephens, Mar. 25, 2002, at 2.

[^229]: Todd J. Rethemeier *et al.*, *Leap Wireless International Inc.*,
    Equity Research, Bear Stearns, Feb 1, 2002, at 17 (citing Leap's
    market research).

[^230]: Dan Meyer, *Carriers Eat Up All-You-Can-Talk Local Buffets*,
    [RCR Wireless News]{.smallcaps}, July 16, 2001 (*available in* 2001
    WL 8870069).

[^231]: *Id.*.

[^232]: *See* MetroPCS, *Welcome* (visited Mar. 20, 2002)
    \<http://www.metropcs.com/\>.

[^233]: *See* NorthCoast PCS, *Service Plans* (visited Mar. 20, 2002)
    \<http://www.northcoastpcs.com/NewFiles/Callingfeatures.html\>.

[^234]: *See* *Transcript*, at 108; First Cellular, *Southern Illinois
    Unlimited* (visited Mar. 20, 2002)
    \<http://www.firstcellular.com/wireless_clear_connect_d.htm\>.

[^235]: *See* Rural Cellular, *Welcome To Rural Cellular Corporation*
    (visited Mar. 20, 2002) \<http://www.ruralcellular.com/\>.

[^236]: Midwest Wireless, *Realm - Basic Service Plan* (visited Mar. 20,
    2002)
    \<http://www.midwestwireless.com/mwc_plans/mwc_plans_Realm_BP.asp\>.

[^237]: Ntelos, *Products & Services* (visited Mar. 20, 2002)
    \<http://www.ntelos.com/ProdSvcs/digpcs_rateplanW.html#nntown\>.

[^238]: *See* *NextGen VI*, at 57-63.

[^239]: *Id.*, at 19.

[^240]: VoiceStream, *Rate Plans: Northeast Neighborhood (Boston)*
    (visited Mar. 20, 2002)
    \<http://www.voicestream.com/products/services/rateplans/nen3_reg.asp\>.
    This plan costs \$59.99. *Id*.

[^241]: *See* *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
    transcript of the forum can be found at *Public Hearing for 7th
    Annual CMRS Competition Report: Transcript of the Day\'s Event*
    (visited Mar. 14, 2002)
    \<http://wireless.fcc.gov/services/cmrs/presentations/020228.pdf\>
    (*Transcript*).

[^242]: *See*, *e.g.*, *Transcript*, at 83 (Economist Charles Mahla: "We
    would love to have more data. Some of this data is difficult to
    get."). Chris Murray of the Consumers Union argued that "\[the
    Commission\] should gather data independently as much as possible."
    *Id.*, at 29. *See*, *also*, *Id.*, at 32 (comments of Economist
    Greg Rosston).

[^243]: Economist Greg Rosston, after describing the benefits of
    collecting data, said, "There are costs to collecting data as well,
    and that's an important thing for the FCC to consider." *Id.*, at
    37. Terry Addington, President of the Rural Cellular Association
    ("RCA") and CEO of First Cellular, concurred: "Mandates are very,
    very difficult for a small carrier to manage because we're resource
    challenged." *Id.*, at 106. Rosston also raised concerns about
    confidentiality and whether or not collected data would be or could
    be used anti-competitively. *Transcript*, at 37. *See*, *also*,
    *Id.*, at 105 (comments by Addington).

[^244]: Joyce D. Stern, *The Condition of Education in Rural Schools,*
    U.S. Department of Education (Jun 1994) \[*cited in* National Center
    for Education Statistics, *Urban\\Rural Classification Systems*
    (visited Apr. 4, 2002)
    \<http://nces.ed.gov/surveys/ruraled/definitions.asp\>\].

[^245]: For Census 2000, the Census Bureau classifies "urban" as all
    territory, population, and housing units located within an urbanized
    area ("UA") or an urban cluster ("UC"). It delineates UA and UC
    boundaries to encompass densely settled territory, which consists
    of: 1) core census block groups or blocks that have a population
    density of at least 1,000 people per square mile, and 2) surrounding
    census blocks that have an overall density of at least 500 people
    per square mile. In addition, under certain conditions, less densely
    settled territory may be part of each UA or UC. "Rural" consists of
    all territory, population, and housing units located outside of UAs
    and UCs. U.S. Census Bureau, *Urban and Rural Classification: Urban
    and Rural Criteria* (visited Apr. 15, 2002)
    \<<http://www.census.gov/geo/www/ua/ua_2k.html>\>. The Office of
    Management and Budget ("OMB") defines Metropolitan Areas ("MA") for
    purposes of collecting, tabulating, and publishing federal data. OMB
    defines MAs as those areas within the United States that include: 1)
    one city with 50,000 or more inhabitants, or 2) a Census-Bureau
    defined urbanized area of at least 50,000 inhabitants and a total
    metropolitan population of at least 100,000 inhabitants (75,000 in
    New England). Currently defined MAs are based on application of 1990
    standards (which appeared in the Federal Register on March 30, 1990)
    to 1990 decennial census data and to subsequent Census Bureau
    population estimates and special census data. Current MA definitions
    were announced by OMB effective June 30, 1999. U.S. Census Bureau,
    *About Metropolitan Areas* (visited Apr. 15, 2002)
    \<http://www.census.gov/population/www/estimates/aboutmetro.html\>.
    For the administration of several types of business loans, the Small
    Business Administration ("SBA") has defined rural area as a
    political subdivision or unincorporated area in a non-metropolitan
    county (as defined by the Department of Agriculture), or, if in a
    metropolitan county, any such subdivision or area with a resident
    population under 20,000 which is designated by SBA as rural. 13
    C.F.R. § 120.10. The Rural Housing and Economic Development (RHED)
    program, administered by the U.S. Department of the Housing and
    Urban Development, supports housing and economic development
    activities in rural areas, which are defined by any one of five
    criteria: 1) A place having fewer than 2,500 inhabitants (within or
    outside a metropolitan area); 2) a county with no urban population
    of 20,000 inhabitants or more; 3) Territory, persons, and housing
    units in rural portions of "extended cities" (using data from the
    U.S. Census Bureau); 4) "Open country" which is not part of or
    associated with an urban area (as defined by the Department of
    Agriculture); 5) Any place with a population not in excess of 20,000
    and not located in a Metropolitan Statistical Area. 66 Fed. Reg.
    12190 (2001). In the early 1970s, the Economic Research Service
    (ERS) of the U.S. Department of Agriculture, found a need for a
    classification of counties into various degrees of urbanization. The
    resultant system, officially known as the ERS Rural-Urban Continuum
    Codes, is most often referred to as the Beale codes, after its
    creator, Dr. Calvin Beale. The Beale codes form a classification
    scheme that distinguishes metropolitan counties by size, and
    nonmetropolitan counties by degree of urbanization and proximity to
    metro areas. Counties are subdivided into 4 metro and 6 nonmetro
    categories, resulting in a 10-part county codification scheme. A
    number of agencies, including the Department of Education, have used
    the Beale codes. National Center for Education Statistics,
    *Urban\\Rural Classification Systems* (visited Apr. 25, 2002)
    \<http://nces.ed.gov/surveys/ruraled/definitions.asp\>). The
    Employment and Training Administration ("ETA") in the Department of
    Labor administered the Welfare-to-Work grant program. In the third
    round of that grant program, a rural area was defined as: 1) any
    county that does not contain an urban center of more than 50,000
    people, and where at least 50 percent of the geographical area of
    the county has a population density of less than 100 persons per
    square mile; or 2) in counties where there is an urban center, a
    rural area within the county that constitutes, or is part of, a
    distinct rural labor market. 64 Fed. Reg. 4018 (1999).

[^246]: *See* Biennial Regulatory Review, Spectrum Aggregation Limits
    for Wireless Telecommunications Carriers, *Report and Order*, 15 FCC
    Rcd 9219, 9256 at note 203 (1999). Consistent with this approach,
    the Commission recently applied this distinction between rural and
    urban markets in its review of the cellular cross-interest rule,
    deciding to maintain this rule in RSAs while eliminating it in MSAs.
    *See* *Spectrum Cap Order*, at 22708. Based on data in its records,
    the Commission found that RSAs typically have fewer competitors
    offering two-way mobile service, and fewer nationwide service
    providers, than do MSAs. *Id.*, at 22705.

[^247]: Mark Rubin, Director of Federal Government Affairs for Western
    Wireless stated that "broad generalities, based upon \[M\]SA and RSA
    distinctions, don't necessarily reflect the marketplace realities."
    *Transcript*, at 122. Doug Stephens, interim Chief Operating Officer
    and Vice President for the central region of Dobson, said, "It is no
    longer useful for the Commission to engage in urban/rural
    distinction\[s\]." *Transcript*, at 114. Rubin of Western Wireless
    agreed: "Any differences that do exist \[in competition between
    rural and urban areas\] may not \[be\] attributable to any rural or
    urban distinction. For example, there are some rural areas that have
    better service and more competition than urban areas." *Transcript*,
    at 122.

[^248]: *See* discussion in Rural Rollout, *infra*.

[^249]: *See* Section A.(ii), Regional Penetration Rates, *supra*.

[^250]: 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.

[^251]: Although he added, "but I'm not sure if that works."
    *Transcript*, at 101. Johnson earlier noted that "there are rural
    portions of MSAs." *Id.*, at 101.

[^252]: Johnson said "\[population density is\] one of the many factors
    that would determine rural." *Id.*, at 101. Rubin said, "as a rural
    cellular service provider, Western defines itself, in part, based
    upon the low population density of its service area." *Id.*, at
    122-123.

[^253]: *Id.*, at 102. Johnson cautions: "So does that make Albemarle
    County, Virginia \[rural?\]. Albemarle County \[includes\] the
    University of Virginia. They have 94.0 people per square mile. Does
    that make \[the county\] rural . . . ? I mean, if you're right there
    at the University of Virginia, it's not rural. If you drive five
    minutes away, where Thomas Jefferson was born, it's extra rural."
    *Id.*, at 102.

[^254]: Econ One normally analyzes pricing plan data every month for the
    top 25 most populous U.S. markets. *See* Section II.d, Pricing Data
    and Trends, *supra*. The rural market pricing plans were analyzed
    using the same methodology as Econ One's large markets survey.

[^255]: Economist Charles Mahla of Econ One described the selection
    process: "We randomly selected from RSAs and then simply chose
    cities within an RSA. The one, perhaps, selection bias is that we
    chose cities that were not adjacent to or very close to larger urban
    areas. So we randomly selected the RSAs we used and then, selected
    cities within those RSAs to conduct those studies." He added, "I
    don\'t believe the definition of rural markets would comport with
    some of the government agencies definition of rural markets."
    *Transcript*, at 84-85.

[^256]: The survey results are reproduced in Appendix C, Table 10, at
    C-11.

[^257]: *Transcript* at 87.

[^258]: *Transcript* at 86.

[^259]: *Transcript*, at 108-109.

[^260]: *See* Appendix C, Table 11, at C-12.

[^261]: *See* Appendix C, Table 11, at C-12. Addington said that his
    company's "margins have gone down 8 percent since we've gone from
    two competitors to five competitors, which has only been about a
    year, year and a half. My margins have gone done 8 percent. My
    \[churn\] has gone up 38 percent." *Transcript*, at 110.

[^262]: *Transcript*, at 115.

[^263]: *Id.*, at 110.

[^264]: *Id.*, at 115.

[^265]: *Id.*, at 110-111.

[^266]: *See* Charles R. Matha, *Public Forum For the 7th Annual CMRS
    Competition Report*, Presentation, Econ One Research, Inc., Feb. 28,
    2002, at slide 10 (*available at*
    http://wireless.fcc.gov/services/cmrs/presentations/).

[^267]: Interconnection and Resale Obligations Pertaining to Commercial
    Mobile Radio Services, *First Report and Order*, 11 FCC Rcd 18455,
    18457 (1996).

[^268]: *See* Appendix C, Table 2, at C-3.

[^269]: 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). General Motor Corp. claims that its
    telematics system OnStar is the country's largest reseller of
    "cellular service." *General Motors Corp. -- GM's OnStar Has Close
    to Two Million Subscribers*, [Canada Stockwatch]{.smallcaps}, Nov
    12, 2001 (2001 WL 31657384). OnStar services include automatic
    notification of air bag deployment, stolen vehicle tracking, remote
    door unlock, emergency services dispatch, roadside assistance,
    remote diagnostics, route support, convenience services and OnStar
    Concierge. At extra cost, subscribers can also use OnStar's
    "Personal Calling" service, which allows OnStar system customers to
    make and receive calls in their vehicles in cooperation with Verizon
    Wireless. *Cadillac and OnStar Offer Six-Months Directions &
    Connections Service at No Charge on Certified Pre-Owned Cadillacs*,
    News Release, OnStar, May 13, 2002. OnStar customers must
    pre-purchase minutes to use the service. OnStar, *What is OnStar:
    Services: Personal Calling* (visited Mar. 11, 2002)
    \<http://www.onstar.com/visitors/html/ao_personal_calling.htm\>. For
    a more complete discussion of OnStar, s*ee* Section 4, Telemetry and
    Telematics, *infra*.

[^270]: *WorldCom, Inc. Announces Intention to Exit Wireless Resale
    Business*, News Release, WorldCom, Inc., June 5, 2002.

[^271]: Deborah Mendez-Wilson, *Changing Rules of the Game: MVNO
    Advocates Keep a Watchful Eye on Nextwave Case*, [Wireless
    Week]{.smallcaps}, Sept. 17, 2001, at 20.

[^272]: Deborah Mendez-Wilson, *Changing Rules of the Game: MVNO
    Advocates Keep a Watchful Eye on Nextwave Case*, [Wireless
    Week]{.smallcaps}, Sept. 17, 2001, at 20. *See*, *also*, Dominic
    Endicott, *MNVOs in the U.S.: Who Will Win and How . . . and Will It
    Be Worth It?*, [RCR Wireless New]{.smallcaps}, Sept. 20, 2001, at
    42, and Lynette Luna, *Carriers Look Beyond Brand*,
    [Telephony]{.smallcaps}, Feb. 18, 2002 (2002 WL 7733793).

[^273]: *Sprint and Virgin announce Joint Venture*, News Release, Sprint
    PCS, Oct. 5, 2001.

[^274]: *Id.*

[^275]: *Sprint and Virgin Announce Funding of Joint Venture*, News
    Release, Sprint PCS, May 17, 2002.

[^276]: *Sprint and Virgin Announce Joint Venture*, News Release, Sprint
    PCS, Oct. 5, 2001.

[^277]: Inmarsat Ltd. ("Inmarsat") and Mobile Satellite Ventures
    ("MSV"), a joint venture of Motient Corporation and TMI
    Communications and Company, LP, were also providing voice and data
    communications via satellite at year-end 2001. 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. These voice and data
    services offered by Inmarsat and MSV are not discussed in this
    report as they do not compete directly with mobile telephony
    services.

[^278]: *GlobalStar Sees 2^nd^ Qtr Reorg Plan*, [TR Daily]{.smallcaps},
    Apr. 16, 2002; Andy Pasztor, *Globalstar's Filing Reflects a Lack Of
    Restructuring Plan, Customers*, [Wall Street Journal]{.smallcaps},
    Feb. 19, 2002; Pradnya Joshi, *Satellite Phones Find Their Calling*,
    [New York Times]{.smallcaps}, Jan. 8, 2002.

[^279]: Globalstar, *Systems Facts* (visited Feb. 19, 2002)
    \<http://www.globalstar.com/downloads/systemfacts.pdf\>.

[^280]: Pradnya Joshi, *Satellite Phones Find Their Calling*,
    [Newsday]{.smallcaps}, Jan. 8, 2002 ("*Satellite Phones -
    Newsday*"); Satellite-Phones.org, *Satellite Phones and Cell Phone
    Accessories from Global Star, Iridium, and Inmarsat* (visited Feb.
    19, 2002) \<http://www.satellite-phones.org/index.shtml\>.

[^281]: Globalstar, *Globalstar Pricing and Promotions* (visited Jan.
    29, 2002) \<http://www.globalstarusa.com/pricing\>.

[^282]: Globalstar, *Globalstar USA : Our Distributors* (visited Jan.
    29, 2002) \<http://www.globalstarusa.com/dealer\>.

[^283]: *See Sixth Report*, at 13386.

[^284]: *Globalstar Reports Results for Third Quarter of 2001*, News
    Release, Globalstar, Nov. 13, 2001.

[^285]: Andy Pasztor, *Globalstar's Filing Reflects a Lack Of
    Restructuring Plan, Customers*, [Wall Street Journal]{.smallcaps},
    Feb. 19, 2002; Ben Berkowitz, *Globalstar Files for Chapter 11
    Bankruptcy*, [Reuters]{.smallcaps}, Feb. 15, 2002; *Globalstar,
    Creditors Finalize Agreement On Debt Restructuring and New Business
    Model*, News Release, Globalstar, Feb. 15, 2002.

[^286]: Andy Pasztor, *Globalstar's Filing Reflects a Lack Of
    Restructuring Plan, Customers*, [Wall Street Journal]{.smallcaps},
    Feb. 19, 2002; Ben Berkowitz, *Globalstar Files for Chapter 11
    Bankruptcy*, [Reuters]{.smallcaps}, Feb. 15, 2002.

[^287]: *Id.*

[^288]: For a description of Iridium's emergence from bankruptcy, *see*
    *Sixth Report*, at 13384.

[^289]: *Iridium Satellite LLC Launches Global Communications Services*,
    News Release, Iridium Satellite, Mar. 28, 2001; Iridium Satellite,
    *Iridium -- Our Story* (visited Jan. 25, 2002)
    \<http://www.iridium.com/corp/iri_corp-story.asp?storyid=4\>;
    Quentin Hardy, *Corporate Focus: Global Minded Iridium has
    Down-to-Earth Need: Profit*, [Wall Street Journal]{.smallcaps}, Jan.
    26, 1999 at B4, *available in* 1999 WL-WSJ 5438178.

[^290]: Malcolm Spicer, *Iridium Satellite Lands Defense Contract*, [CT
    Wireless]{.smallcaps}, Dec. 7, 2000, *available in* 2000 WL 6392736.

[^291]: *Satellite Phones - Newsday*; Arik Hesseldahl, *The Return Of
    Iridium*, [Forbes.com]{.smallcaps}, Nov. 30, 2001.

[^292]: World Communication Center, *Iridium Phones* (visited Feb. 11,
    2002) \<http://www.wcclp.com/Iridium_phones.htm\>.

[^293]: *Satellite Phones - Newsday*; World Communication Center,
    *Iridium Phones* (visited Feb. 11, 2002)
    \<http://www.wcclp.com/Iridium_phones.htm\>; Global Satellite FWI,
    *9505 Order For* (visited Feb. 11, 2002)
    \<http://www.globalsatellitefwi.com/9505form.html\>.

[^294]: Iridium Satellite, *Iridium -- Services* (visited Feb. 11, 2002)
    \<http://www.iridium.com/service/iri_service-detail.asp?serviceid=2&method=dialup\>.

[^295]: *Id.*

[^296]: See *Sixth Report*, at 13388.

[^297]: *NTT DoCoMo Plans to Exercise Right to Purchase Additional AT&T
    Wireless Stock*, News Release, AT&T Wireless, Dec. 21, 2001.

[^298]: See *Sixth Report*, at 13388-13389. *See* Appendix C, Table 9,
    at C-13 for a summary of U.S. operators' foreign holdings.

[^299]: *BellSouth Reports Third Quarter Earnings*, News Release,
    BellSouth, Oct. 18, 2001.

[^300]: Santosh Menon, *Bharti Increases SkyCell Stake*,
    [Reuters]{.smallcaps}, Sept. 18, 2001; Santosh Menon, *India's
    Bharti Eyes Foreign-owned Stakes in SkyCell*, [Reuters]{.smallcaps},
    Aug. 3, 2001.

[^301]: Tally Goldstein, *BellSouth Set to Sell Stakes in Mobile
    Phones*, [FT.com]{.smallcaps}, Aug. 28, 2001.

[^302]: *BellSouth Restructures Agreement with KPN*, News Release,
    BellSouth, Jan. 30, 2002.

[^303]: *BellSouth and KPN Close on Sale of E-Plus*, News Release,
    BellSouth, Mar. 14, 2002.

[^304]: *BellSouth Records \$850 million on Sale of KPN Shares*, News
    Release, BellSouth, Mar. 19, 2002; Richard Waters, *BellSouth
    Disposes of Stake in KPN*, [FT.com]{.smallcaps}, Mar. 20, 2002.

[^305]: *Id*.

[^306]: Richard Waters, *BellSouth Disposes of Stake in KPN*,
    [FT.com]{.smallcaps}, Mar. 20, 2002.

[^307]: Oida Taaffe, *Telia, Telenor Amongst Danish UMTS Bidders*,
    [Total Telecom]{.smallcaps}, Sept. 5, 2001.

[^308]: Anne Young, *Denmark Awards Four 3G Licenses*, [Total
    Telecom]{.smallcaps}, Sept. 20, 2001.

[^309]: Reuters staff, *Czech Telecom to Buy EuroTel for US\$1.5
    Billion*, [Total Telecom]{.smallcaps}, July 30, 2001.

[^310]: Reuters staff, *Cesky Telecom's EuroTel Buy Hits Price Snag*,
    [Total Telecom]{.smallcaps}, Nov. 7, 2001.

[^311]: Reuters staff, *Cesky Telecom Abandons Talks on EuroTel Buy*,
    [Total Telecom]{.smallcaps}, Nov. 28, 2001.

[^312]: Juliana Ratner, *SBC Presses for Belgacom IPO to Cash in Stake*,
    [FT.com]{.smallcaps}, Mar. 13, 2002.

[^313]: *Id.*

[^314]: *Id.*

[^315]: Leslie Crawford, *Telefonica to Take Over Mexican Mobile
    Operator*, [FT.com]{.smallcaps}, Mar. 8, 2002.

[^316]: *Annual Report 2001*, SBC Communications Inc., at 38; Fiona
    Ortiz, *Telecom Americas Owners Plan Overhaul*,
    [Reuters]{.smallcaps}, Dec. 4, 2001.

[^317]: *America Movil Reshuffles Latin American Interests*, [Total
    Telecom]{.smallcaps}, Jan. 29, 2002.

[^318]: *Annual Report 2001*, SBC Communications Inc., at 32.

[^319]: *Verizon Communications Establishes Trust for Employees; Reduces
    Ownership of Wireless Company in Argentina*, News Release, Verizon
    Communications, Mar. 28, 2002.

[^320]: *Western Wireless International Announces Completed Acquisition
    of tele.ring*, News Release, Western Wireless International, July 3,
    2001.

[^321]: *Id*.

[^322]: Anne Young, *Three Operators Apply for Four Irish 3G Licenses*,
    [Total Telecom]{.smallcaps}, Mar. 27, 2002.

[^323]: *Id*.

[^324]: Emily Bourne, *AT&T Wireless Buys BT's Stake in Robers
    Wireless*, [Total Telecom]{.smallcaps}, July 4, 2001; *AT&T Wireless
    Increases Stake in Rogers Wireless*, [Reuters]{.smallcaps}, July 3,
    2001.

[^325]: *See* *Sixth Report*, at 13392.

[^326]: Robert Budden, *Mobile Sales Across Europe Hit by Slowdown*,
    [FT.com]{.smallcaps}, Feb. 3, 2002.

[^327]: *Id*.

[^328]: Paul Wuh, *et al.*, *Wireless 2002 -- Focusing on
    Profitability*, Global Equity Research, Goldman Sachs, May 3, 2002,
    at 4 and 46 ("*Focusing on Profitability*").

[^329]: *Id*.

[^330]: *Wireless Matrix*, at 17, 27 and 31.

[^331]: *See* *Sixth Report*, at 13392.

[^332]: *Focusing on Profitability*, at 4 and 37-38.

[^333]: *Id*, at 38*.*

[^334]: *See* *Sixth Report*, at 13391.

[^335]: *Id*.

[^336]: *Operators Clean Up Subs Numbers and Focus on Profitability*,
    [Global Mobile]{.smallcaps}, Feb. 27, 2002, at 14-15.

[^337]: Connie Ling, *Prepaid Mobile-Phone Lines Tangle Calculation of
    Market Penetration*, [WSJ.com]{.smallcaps}, Jan. 24, 2002.

[^338]: *Id*.

[^339]: *Id*.

[^340]: *See* *Sixth Report*, at 13390-13391.

[^341]: *NextGen VI*, at 16; Paul Wuh *et al.*, *Prepaid in Europe,
    Lessons for the United States*, Global Equity Research, Goldman
    Sachs, Dec. 22, 2001, at 1, 3.

[^342]: *See* *Sixth Report*, 13391.

[^343]: *NextGen VI*, at 14.

[^344]: *Id.*

[^345]: J. McIntyre, *TMT Edge*, Global Equity Research, Bear Stearns,
    Jan. 24, 2002, at 4. For the purpose of this comparison, we are
    using a source that provides an estimate of U.S. MOUs that is
    comparable to its estimate of the Western European average, but
    somewhat lower than the estimates of U.S. MOUs from other sources
    cited earlier.

[^346]: *Id.*

[^347]: *Wireless Matrix*, at 3.

[^348]: *Id.*

[^349]: *Id.*

[^350]: *See* *Sixth Report*, at 13393.

[^351]: *Id*.

[^352]: In the case of the United States, Teligen calculates two
    business and two residential baskets using selected calling plans of
    two mobile operators, namely, Sprint PCS and Qwest.

[^353]: *See* *Sixth Report*, at 13394.

[^354]: *Teligen T-Basket -- Mobile (GSM/PCS) Basket*, Teligen Limited,
    Feb. 2002. See Appendix C, Table 10, at C-15.

[^355]: *Wireless Matrix*, at 4.

[^356]: *ERO Information Document on GSM Frequency Utilisation Within
    Europe*, European Radiocommunications Office, Feb. 2001.

[^357]: Fanos Hira, Jerry Dellis Paul Harper and Jeremy Hudson, *The
    Cellular Review*, European Equity Research, Bear Stearns, Jan. 2002,
    at 12.

[^358]: *Wireless Matrix*, at 37; Fanos Hira, Jerry Dellis Paul Harper
    and Jeremy Hudson, *mmO~2~*, European Equity Research, Bear Stearns,
    Dec. 12, 2001, at 21.

[^359]: *Effective Competition Review: Mobile*, Oftel, Sept. 26, 2001,
    at v.

[^360]: *NextGen VI*, at 24; Paul Wuh *et al.*, *Prepaid in Europe,
    Lessons for the United States*, Global Equity Research, Goldman
    Sachs, Dec. 22, 2001, at 9.

[^361]: See, for example, *Focusing on Profitability*, at 66.

[^362]: *Review of the Charge Control on Calls to Mobiles*, Oftel, Sept.
    26, 2001, at 1.

[^363]: *Id*.

[^364]: See *Draft Guidelines on Market Analysis and the Calculation of
    Significant Market Power*, Commission of the European Communities,
    Mar. 28, 2001, at 17; *Pricing Methodology for the GSM Termination
    Service -- Final Report*, Australian Competition and Consumer
    Commission, July 2001, at 12.

[^365]: *Wireless Matrix*, at 27.

[^366]: *Id*.

[^367]: Kagan estimates that there were 7.8 million wireless Internet
    subscribers in the United States at the end of 2001. *U.S. Wireless
    Industry Data Sub and Revenue* Projections, Interactive Mobile
    Investor, Kagan World Media, Mar. 31, 2002, at 3. The Yankee Group
    states that wireless Internet adoption is "rapidly approaching 10
    million users." This includes wireless Internet users on all
    devices. *See* Yankee Group, *The Yankee Group: Highlights of New
    Surveys and Publications* (visited Mar. 6, 2002)
    \<http://www.yankeegroup.com/
    webfolder/yg21a.nsf/0/16AE3A28DBFF8E5C85256B19005F8428?OpenDocument\>.
    The *Sixth Report* stated that there were approximately 2.5 million
    wireless web users at the end of 2000. *See Sixth Report*, at 13396,
    note 323. However, that figure was a sum of the number of wireless
    web users reported by individual mobile telephone carriers, and most
    carriers have since stopped reporting their total number of wireless
    web users. *See* Section II.B.2.a, Mobile Data Mobile Telephone
    Sector, *infra.* The Yankee Group estimated there were more than 2
    million wireless data users at the end of 2000. *See Sixth Report*,
    at 13396, note 323. Kagan also estimates that mobile telephone
    carriers' wireless Internet revenue totaled \$649 million at the end
    of 2001, or 0.8% of total 2001 revenue. *U.S. Wireless Industry Data
    Sub and Revenue* Projections, Interactive Mobile Investor, Kagan
    World Media, Mar. 31, 2002, at 3.

[^368]: As mentioned above, the term "advanced wireless services" is
    used to describe the interim technologies that carriers are using or
    plan to use in migrating from 2G to 3G technologies. *See* note
    Error: Reference source not found, *supra.* In the United States,
    the two major advanced wireless service technologies currently being
    deployed are: 1) General Packet Radio Service ("GPRS"), which is
    being rolled out by carriers using GSM/TDMA, and 2) cdma2000 1xRTT
    (also referred to as "cdma2000 1X" or "1xRTT"), which the current
    CDMA carriers are upgrading their networks to. Some in the industry
    describe 1xRTT, which will double voice capacity and allow maximum
    data transfer speeds of up to 144 kbps, as a 2.5G technology, while
    CDMA carriers and equipment manufacturers generally characterize it
    as the first stage of 3G deployment. GPRS is a packet-based
    data-only network upgrade that allows for faster data rates by
    aggregating up to eight 14.4 kbps channels and is characterized as a
    2.5G service. *See Fifth Report*, at 17700. *See also,* note Error:
    Reference source not found, *infra*. Most U.S. GSM/TDMA 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"). The major CDMA carriers have
    plans to build out cdma 1XEV or cdma EV-DO. *See* Section II.B.2.a,
    Mobile Data Mobile Telephone Sector, *infra*, for a more detailed
    discussion.

[^369]: The deployment of GPRS and cdma2000 1xRTT by mobile telephone
    carriers is discussed in more detail in Section II.B.2.a, Mobile
    Data Mobile Telephone Sector, *infra.* Many analysts and industry
    players believe that the widespread deployment of 3G networks is
    still several years away, given certain technological and economic
    obstacles yet to be overcome. Danni Gladden Green, Americas
    Strategic Marketing Manager for Texas Instruments Inc.'s
    semiconductor group, stated in January 2002, "I think the bulk of
    the revenue in 2003 will still come from 2G and, to a smaller
    percentage, 2.5G services." *See* Alex Romanelli, *2G is Still King;
    3G important, but older technology won't go away*, [Electronic
    News]{.smallcaps}, Jan. 1, 2002. "Given the economy is slowing down
    and no one knows what the killer applications are going to be, I
    think we're going to see a more incremental approach than what has
    been suggested," said Joe Laszlo, broadband and wireless analyst for
    Jupiter Media Matrix. *See* Amy Shafer, *Sprint considers 3G rollout
    a relaunch of the company*, [Associated Press]{.smallcaps}, Feb. 15,
    2002. Samuel May, U.S. Bancorp Piper Jaffray senior research
    analyst, said, "We're nowhere \[with 3G rollout\]. We're at a
    starting gate with no starting gun." *See* Kent German, *An unproven
    promise*, [Upside]{.smallcaps}, Mar. 2002. Another difficulty for 3G
    has been the development of applications. According to Knox Bricken,
    a wireless telecommunications analyst with Yankee Group, "The
    applications aren't there yet." *See* Katie Hafner, *The Future of
    Cellphones Is Here. Sort Of*, [New York Times]{.smallcaps}, Feb. 14,
    2002. *See also* Brad Smith, *Filming the Wireless Data Sequel*,
    [Wireless Week]{.smallcaps}, Jan. 7, 2002; Ric Prentiss,*"S-Curve"
    Ahead Wireless Voice Plateaus in 2004 When Data Kicks-In*, Raymond
    James, Sept. 5, 2001; Craig Mathias, *A good year for wireless?*,
    [Electronic Engineering Times]{.smallcaps}, Jan. 28, 2002.

[^370]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *infra.*

[^371]: This analysis is based on publicly-available information, such
    as news articles and operators' press releases, web sites, and
    filings with the Commission. 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 GPRS or 1xRTT
    service in a portion of that county. Second, the population figure
    in this analysis includes the total population of the counties
    counted as having any GPRS or 1xRTT rollout. Third, all population
    figures are based on 2000 Census estimates.

[^372]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *infra*.

[^373]: Other types of mobile data services such as location-based
    services and short-range data transmissions are discussed as well.
    *See* Sections II.B.3.e., Location-Based Services and II.B.3.f.,
    Short-Range Data Transmissions, *infra.*

[^374]: The various types of mobile data services available to consumers
    are generally distinct from each other and from voice service. For
    example, sending e-mail is distinguishable from browsing web pages.
    However, not all mobile data services fit in particular categories,
    and providers frequently bundle several mobile data services
    together in their pricing arrangements. This report therefore
    describes the various mobile data services currently available
    without concluding that they are necessarily separate and distinct
    markets. *See* Appendix D, Table 2, at D-5 for an overview of mobile
    Internet access services.

[^375]: At the writing of the *Sixth Report*, the Handspring VisorPhone
    was the only voice capability offered for a PDA. *See Sixth Report*,
    at 13416.

[^376]: However, some smartphones remain largely focused on data
    applications, while others are more voice application-centric. *See*
    Mark Heinzl and Pui-Wing Tam, *Research in Motion, Palm Unveil New
    Handhelds, Raising Rivalry*, [Wall Street Journal]{.smallcaps}, Mar.
    4, 2002 (IBS Warburg analyst Michael Urlocker said, "the new
    BlackBerry will appeal to those who want 'lots of data with some
    phone,' while the new Handspring Treo appeals to those who want
    'lots of phone with some data.'").

[^377]: 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, *Memorandum Opinion and Order and
    Further Notice of Proposed Rulemaking*, 16 FCC Rcd 16043 (2001)
    ("*3G FNPRM*").

[^378]: *See Sixth Report*, at 13400.

[^379]: *3G FNPRM*, at 16044. *See* Appendix A, Fixed Wireless Voice and
    Data Services, *infra*, for a further discussion of MDS.

[^380]: *3G FNPRM*, 16044.

[^381]: NTT DoCoMo, *Revolutionary 3G Service* (visited Mar. 20, 2002)
    \<http://www.nttdocomo.com/top.html\>; Ken Wieland, *Lessons from
    Japan: NTT DoCoMo Has Wisely Adopted a Step-by-Step Approach to
    Service Provisioning*, [Telecommunications (International
    Edition)]{.smallcaps}, Feb. 1, 2002, at 16.

[^382]: *NTT DoCoMo Sees 6 mln 3G Subscribers by 2004 Despite Initial
    Low Take-Up*, [AFX-Asia]{.smallcaps}, Mar. 1, 2002. According to NTT
    DoCoMo, the 3G network will not be available to 97 percent of
    Japan's populated areas until 2004. *Id.* However, DoCoMo announced
    in February 2002 that it would expand 3G service in April 2002 to
    areas outside of Tokyo, increasing the coverage to 60 percent of
    Japan's populated areas. *DoCoMo Hopes for More Customers with
    Expanded 3G Service*, [Agence France Presse]{.smallcaps}, Feb. 22,
    2002.

[^383]: NTT DoCoMo, *Current Information -- Subscriber Growth* (visited
    June 3, 2002) \<http://www.nttdocomo.com/top.html\>. *See Sixth
    Report*, at 13396-13397, for a further discussion of i-mode.

[^384]: Sarah Parker, *Europe Sidelines UMTS in Favor of UMTS Focus*,
    [Global Wireless]{.smallcaps}, Feb. 15, 2002, at 1. Reasons for the
    delays in 3G launches include the high cost of infrastructure
    deployment (added to the large amounts paid for 3G licenses in some
    countries), technical problems with both network infrastructure and
    handsets, and uncertainty over consumer demand. *Id.*

[^385]: *Id*.

[^386]: SK Telecom, *1st Quarter Earnings for the Period Ending March
    31, 2002*, May 6, 2002, at 9.

[^387]: *Wireless Internet Shows Promise in South Korea*, [Wall Street
    Journal]{.smallcaps}, May 13, 2002, at A6.

[^388]: Sarah Parker, *Europe Sidelines UMTS in Favor of UMTS Focus*,
    [Global Wireless]{.smallcaps}, Feb. 15, 2002, at 1 (citing UK
    consulting firm Analysys).

[^389]: GSM Association, *SMS Messages Sent Per Month* (visited Mar. 20,
    2002) \<http://www.gsmworld.com/news/statistics/index.shtml\>. *See*
    Section II.B.3.b., SMS and Instant Messaging, *infra*, for a further
    discussion of SMS service in the United States.

[^390]: *See Fifth Report*, at 17697-17703.

[^391]: *AT&T Wireless On Target To Deliver 3G Services*, News Release,
    AT&T Wireless, July 17, 2001 ("*AT&T Wireless 3G News Release*");
    *Cingular Wireless First to Deliver 2.5G Services to Consumers*,
    News Release, Cingular Wireless, Aug. 27, 2001; *Verizon Wireless
    Launches Nation's First Major Advanced Wireless Network: The Verizon
    Wireless Express Network*, News Release, Verizon Wireless, Jan. 28,
    2002; *VoiceStream Extends GET MORE Value proposition to offer
    High-Speed Wireless Data Service to Customers Nationwide*, News
    Release, VoiceStream, Nov. 14, 2001.

[^392]: *Sprint Leads Evolution to 3G with Nation's Clearest, Fastest,
    Most Economical Migration Strategy*, News Release, Sprint PCS, Mar.
    20, 2001; *Verizon Wireless and Lucent Technologies Plan to Speed
    Introduction of Third-Generation (3G) Technologies to U.S.*, News
    Release, Verizon Wireless, Mar. 19, 2001.

[^393]: Christopher Stern, *High-Speed Wireless Network to Debut*,
    [Washington Post]{.smallcaps}, Jan. 27, 2002.

[^394]: *Verizon Wireless Launches Nation's First Major Advanced
    Wireless Network: The Verizon Wireless Express Network*, News
    Release, Verizon Wireless, Jan. 28, 2002.

[^395]: *Sprint Showcases First Live Public Demonstration of its
    Wireless Third Generation Network*, News Release, Sprint PCS, Jan.
    8, 2002.

[^396]: Sprint PCS, *Media Center: Sprint PCS Third Generation Network
    Questions and Answers* (visited Jan. 30, 2002)
    \<http://www.sprintpcs.com/aboutsprintpcs/Cdma_3g/AQ.html\>;
    *Verizon Wireless and Lucent Technologies Plan to Speed Introduction
    of Third-Generation (3G) Technologies to U.S.*, News Release,
    Verizon Wireless, Mar. 19, 2001. Sprint PCS claims that its cdma2000
    1xEV data and voice network will be capable of transmitting data at
    speeds of 3.5 to 5 Mbps. *Id.*

[^397]: Frank Marsala, *Nextel Communications; Strategy Holds Together,
    Execution Looks Good*, [Robertson Stephens]{.smallcaps}, Mar. 11,
    2002, at 2; Christopher Lindquist, *Wireless Data Will Get A Boost
    In 2002-But How Much Of One Depends On Whom You Ask*,
    [CIO]{.smallcaps}, Mar. 15, 2002; *Nextel Launches Faster Wireless
    Access to Web Content and New Wireless Modem Device; Data
    Compression Solution Accelerates Industry's Largest, Nationwide 2.5G
    Network*, News Release, Nextel, May 14, 2002.

[^398]: Peggy Albright, *Lessons Learned From Current Next-Gen Nets*,
    [Wireless Week]{.smallcaps}, Dec. 17, 2001. A clear timeline for
    Nextel's 3G network overlay has not yet been disclosed; however, one
    analyst believes the company will use cdma2000 and begin building
    the network in 2003 or beyond. Frank Marsala, *Nextel Retains
    Exclusive Rights To Direct Connect on CDMA Network*, Robertson
    Stephens, Jan. 10, 2002.

[^399]: See note Error: Reference source not found, *supra*, for an
    additional description of GRPS and other 2.5G and 3G wireless
    technologies. The channel aggregation technology used in GRPS
    reportedly caused unacceptable heating and battery drain problems in
    the initial GPRS handset models. Accordingly, handset manufacturers
    have been forced to limit the amount of channel aggregation, which
    has therefore affected GPRS data transfer speeds. *See* Dan Meyer,
    *Rolling Out GPRS Only Half The Battle; Carriers Address Delicate
    Marketing, Handset Issues*, [RCR Wireless News]{.smallcaps}, Jan.
    28, 2002; Peggy Albright, *Will GPRS Comply with SAR Standards?*,
    [Wireless Week]{.smallcaps}, Apr. 30, 2001. GPRS data speeds also
    have been affected by network configurations that dedicate the
    majority of channels to voice rather than data traffic. Brad Smith,
    *Next-Gen Networks Battle For Fastest Data Rates*, [Wireless
    Week]{.smallcaps}, Dec. 17, 2001; Peggy Albright, *Lessons Learned
    From Current Next-Gen Nets*, [Wireless Week]{.smallcaps}, Dec. 17,
    2001.

[^400]: *AT&T Wireless 3G News Release*. As of year-end 2001, AT&T
    Wireless offered GPRS in 16 cities. Paul Wuh *et al*., *AT&T
    Wireless Group*, US Wireless Services, Goldman Sachs, Jan. 25, 2002,
    at 1. *Cingular Wireless First to Deliver 2.5G Services to
    Consumers*, News Release, Cingular Wireless, Aug. 27, 2001. As of
    June 2002, Cingular Wireless had deployed GPRS in 38 markets.
    Cingular, *Wireless Internet Availability* (visited June 18, 2002)
    \<http://www.cingular.com/beyond_voice/wi_availability\>.
    *VoiceStream Extends GET MORE Value proposition to offer High-Speed
    Wireless Data Service to Customers Nationwide*, News Release,
    VoiceStream, Nov. 14, 2001. VoiceStream has deployed GPRS across its
    entire network.

[^401]: Dan Meyer, *Rolling Out GPRS Only Half the Battle; Carriers
    Address Delicate Marketing, Handset Issues*, [RCR Wireless
    News]{.smallcaps}, Jan. 28, 2002. Early results in AT&T's launched
    markets yielded speeds of 20-40 kbps. AT&T Wireless estimates data
    rates on its GPRS network are 25 kbps on average. On the other hand,
    VoiceStream claims that its network yields speeds up to 56 kbps and
    40 kbps on average. *See* Dan Meyer, *GSM gains ground in United
    States; AT&T, VoiceStream detail launch, migration plans*, [RCR
    Wireless]{.smallcaps} [News]{.smallcaps}, Nov. 19, 2001; Brad Smith,
    *Next-Gen Networks Battle For Fastest Data Rates*, [Wireless
    Week]{.smallcaps}, Dec. 17, 2001. Several sources estimate maximum
    GPRS speeds will be 115 kbps. *See* Jonathan Roubini, *GPRS Phone
    Service Delivers on Speed Promises; Evaluation*, [PC
    Magazine]{.smallcaps}, Feb. 26, 2002; Brad Smith, *Next-Gen Networks
    Battle for Fastest Data Rates*, [Wireless Week]{.smallcaps}, Dec.
    17, 2001; Blesson Mathews, *Generation Wireless*, [Network
    Computing]{.smallcaps}, June 11, 2001; Harry Newton, [Newton's
    Telecom Dictionary: 16^th^ Expanded & Updated Edition]{.smallcaps},
    CMP Books, July 2000, at 397.

[^402]: *AT&T Wireless 3G News Release*. By year-end 2001, AT&T Wireless
    had built-out GPRS to 45 percent of its covered POPs. *Goldman Sachs
    AT&T Wireless Group*, at 4.

[^403]: 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.

[^404]: Blesson Mathews, *Generation Wireless*, [Network
    Computing]{.smallcaps}, June 11, 2001; Margot Suydam, *Might As Well
    Jump; 3G: The Cellular Industry's Leap Of Faith*,
    [CommVerge]{.smallcaps}, Nov. 1, 2001; Kent German, *An Unproven
    Promise*, [Upside]{.smallcaps}, Mar. 2002.

[^405]: Cingular Wireless LLC, SEC Form S-4, Jan. 24, 2002; Frank
    Marsala, *Implications of Cingular's Technology Announcement*,
    Robertson Stephens, Oct. 31, 2001.

[^406]: *See* *AT&T Wireless 3G News Release*; Paul Wuh, *AT&T Wireless
    Group: Analyst Meeting Companion*, Goldman Sachs, Jan. 25, 2002.

[^407]: See Section II.B.2.c.ii, Operating Systems, *infra*.

[^408]: One analyst stated in January 2002, "\[W\]ireless is ultimately
    the most important aspect of any kind of handheld device." *See* Jon
    Fortt, *Device Arrives at a Critical Time for Firm, Palm Unveils Its
    Wireless Handheld i705*, [San Jose Mercury News]{.smallcaps}, Jan.
    28, 2002 (quoting Thomas Sepenzis, an analyst at CIBC World Markets,
    who also stated, "Twelve months from now, if it's not wireless, it's
    pretty much useless."). Palm stated in January 2002, "Handheld usage
    is shifting. While the \[electronic organizer\] is significant,
    what's going to be driving the industry is communications
    functionality." *See* Vanessa Hua, *Palm Rides Wireless Wave*, [San
    Francisco Chronicle]{.smallcaps}, Jan. 28, 2001, at E1 (quoting John
    Cook, Palm's senior director of product management). In January
    2002, Handspring announced that it would eventually stop producing
    traditional handheld organizers and would offer wireless
    communicators instead. Ian Fried, *Handspring to Developers: Remain
    Calm*, [CNET News.com]{.smallcaps}, Jan. 23, 2001.

[^409]: *eTForecasts: Pocket PC PDAs to Surpass PalmOS PDAs in 2005*,
    [Business Wire]{.smallcaps}, Dec. 12, 2001 (citing "Worldwide PDA
    Markets," a market research report by eTForecasts).

[^410]: *Gartner Dataquest Says Announced Release of Pocket PC 2002 May
    Have Slowed PDA Sales in 3Q01*, [Business Wire]{.smallcaps}, Nov. 5,
    2001.

[^411]: Palm is the largest PDA producer. According to one analyst,
    since its inception, the company has sold a total of 20 million
    devices, about 13 to 14 million of which are currently in use.
    *Patrick Seitz, Palm Setting Its Sights on Corporate Spending with
    New i705 Device Lets Users Check Their E-Mail*, [Investor's Business
    Daily]{.smallcaps}, Jan. 29, 2002, at 5 (citing Todd Kort, an
    analyst with Gartner Inc.).

[^412]: Compaq and HP are in the process of merging. In March, the
    Federal Trade Commission closed its review of the pending merger.
    *Federal Trade Commission Clears HP-Compaq Merger*, News Release,
    HP, Mar. 6, 2002.

[^413]: *Gartner Dataquest Says Announced Release of Pocket PC 2002 May
    Have Slowed PDA Sales in 3Q01*, [Business Wire]{.smallcaps}, Nov. 5,
    2001.

[^414]: The Palm i705 was released in January 2002 and is an updated
    version of the Palm VII series, which was originally released in the
    second half of 1999 and is discussed in greater detail in the *Sixth
    Report,* at 13413-13414, and *Fifth Report,* at 17722-17723. The
    Palm i705 costs \$450. Users can also purchase a thumb keypad to
    slip on to the bottom of the device. *Patrick Seitz, Palm Setting
    Its Sights on Corporate Spending with New i705 Device Lets Users
    Check Their E-Mail*, [Investor's Business Daily]{.smallcaps}, Jan.
    29, 2002, at 5. The device includes a 33 MHz Dragonball processor, 8
    megabytes ("MB") of RAM, and 4 MB of storage, and provides always-on
    access to e-mail and messaging. Kristen Kenedy, *Palm Eyes Security
    -- Data Protection Key as Enterprise Arena Considers Handhelds*,
    [Computer Reseller News]{.smallcaps}, Jan. 28, 2002, at 96 ("*Palm
    Eyes Security*").

[^415]: *Palm Eyes Security*. Cingular Wireless's Mobitex network allows
    users to roam in 260 U.S. metropolitan areas without incurring
    additional charges. *Palm i705 Handheld Debuts: Only Secure,
    Integrated Wireless, Email Solution with Web Access*, News Release,
    Palm, Jan. 28, 2002.

[^416]: *Cingular Powers New Palm i705 Wireless Handheld*, News Release,
    Cingular Wireless, Jan. 28, 2002.

[^417]: *Palm Eyes Security*.

[^418]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *supra*, for a further discussion of advanced wireless network
    deployments by mobile telephone carriers.

[^419]: These manufacturers also make wireless modem cards for laptops,
    allowing them to connect to the Internet wirelessly.

[^420]: *Sierra Wireless and Verizon Wireless Connect Mobile Users on
    the First 1xRTT "Express Network,"* News Release, Sierra Wireless,
    Jan. 28, 2002.

[^421]: The wireless modem card is the Merlin G100, made by Novatel
    Wireless. VoiceStream, *G100 iStream PC Card* (visited Mar. 4, 2002)
    \<http://www.voicestream.com/products/services/istream/wirelessinbox.asp#\>.
    *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *supra*, for a discussion of advanced wireless service rollouts and
    network deployments by mobile telephone carriers.

[^422]: However, even when using a mobile telephone for a connection,
    PDA users can typically access additional or more advanced Internet
    services and applications not available on mobile telephone
    handsets. *See* Sections II.B.2.a, Mobile Data Mobile Telephone
    Sector, *supra*, and II.B.3, Mobile Data Services, *infra*.

[^423]: The VisorPhone connects to GSM networks, while the DigitalLink
    works with Sprint PCS's CDMA network. The DigitalLink module is also
    compatible with Sprint PCS's 1xRTT network, which is being deployed
    nationwide during 2002 and is expected to increase data speeds to up
    to 144 kbps. Handspring, *VisorPhone* (visited February 13, 2002)
    \<http://www.handspring.com/products/visorphone/index.jhtml\>;
    Handspring, *Sprint PCS Wireless Web DigitalLink* (visited February
    13, 2001)
    \<http://www.handspring.com/products/sbmodules/sprintpcs.jhtml\>.

[^424]: Andrea Ahles, *Cellphones That Are Also PCs, PDAs, Pagers the
    Device of the Year*, [Fort Worth Star-Telegram]{.smallcaps}, Jan. 9,
    2002 (quoting Todd Kort, Gartner Group).

[^425]: *Id.*

[^426]: Jon Fortt, *Device Arrives at a Critical Time for Firm, Palm
    Unveils Its Wireless Handheld i705*, [San Jose Mercury
    News]{.smallcaps}, Jan. 28, 2002. *See* Section II.B.3.b(ii),
    Operating Systems, *infra*, for a discussion of PDA operating
    systems.

[^427]: The Treo currently transmits data at around 9.6 kbps. Jon Fortt,
    *Device Arrives at a Critical Time for Firm, Palm Unveils Its
    Wireless Handheld i705*, [San Jose Mercury News]{.smallcaps}, Jan.
    28, 2002; Rob Pegoraro, *Even the Best of the Phone-PDA Combos
    Aren't Good Enough*, [Washington Post]{.smallcaps}, Jan. 27, 2002,
    at H7. Treo users can send and receive SMS messages, access POP3
    e-mail accounts (s*ee* note Error: Reference source not found,
    *infra*, for a discussion of POP3 e-mail accounts), and surf the web
    using Handspring's browser, Blazer, which does display graphical web
    pages in a recognizable form. The Treo does not contain Handspring's
    signature Springboard expansion slot, but it does have an integrated
    thumb keypad. *See* Bruce Brown, *Handspring Gets the Phone/PDA
    Combo Right*, [PC Magazine]{.smallcaps}, Feb. 12, 2002, at 34; Rob
    Pegoraro, *Even the Best of the Phone-PDA Combos Aren't Good
    Enough*, [Washington Post]{.smallcaps}, Jan. 27, 2002, at H7.

[^428]: Rob Pegoraro, *Even the Best of the Phone-PDA Combos Aren't Good
    Enough*, [Washington Post]{.smallcaps}, Jan. 27, 2002, at H7.

[^429]: *Handspring and Sprint Developing CDMA Version of Treo
    Communicator*, News Release, Handspring, Mar. 19, 2002.

[^430]: *RIM Adds Phone to BlackBerry, Takes on Cell Giants*,
    [Reuters]{.smallcaps}, Mar. 4, 2002. *See* Section II.B.3.d, E-mail
    and Corporate Server Access, *infra*, for a discussion of e-mail
    service on mobile devices. RIM also announced an agreement with
    Nextel and Motorola in January 2002 to develop a RIM device that
    will include RIM's BlackBerry e-mail service and voice access over
    Nextel's iDEN network, including Nextel's DirectConnect two-way
    digital radio service. *Nextel, RIM and Motorola Agree to Purchase
    Voice-enabled Handheld*, News Release, Nextel and RIM, Jan. 24,
    2002. Nextel's iDEN network technology is manufactured by Motorola.
    *Id.*

[^431]: *Microsoft Rings in Pocket PC Phone Edition*, News Release,
    Microsoft, Feb. 19, 2002. The mobile data services offered with
    devices running the Pocket PC 2002 and Pocket PC 2002 Phone Edition
    operating systems are discussed in more detail in Section II.B.3.d.,
    E-mail and Corporate Server Access, *infra*. At the same time
    Microsoft unveiled the Jornada 928, the company announced an
    agreement with Intel in which the two companies will support each
    other's components in smartphone platform design. Microsoft agreed
    to support Intel's Personal Internet Client Architecture (Intel PCA)
    while Intel's components will integrate Microsoft's operating system
    with the goal of creating a standard platform for smartphone/PDA
    software development. *Microsoft and Intel Announce Wireless
    Development Initiative*, News Release, Microsoft, Feb. 19, 2002.

[^432]: Verizon Wireless, *Introducing Thera* (visited May 22, 2002)
    \<http://www.verizonwireless/com\>.

[^433]: The major exceptions are devices made by RIM. The BlackBerry
    5810 uses a Java operating system developed by Sun Microsystems that
    can reportedly be read and understood by all other operating
    systems. *RIM Adds Phone to BlackBerry, Takes on Cell Giants*,
    [Reuters]{.smallcaps}, Mar. 4, 2002.

[^434]: About 22 percent of the PDAs sold during 2001 run Microsoft's
    Pocket PC or Windows CE, and the remaining 6 percent run other
    operating systems. *eTForecasts: Pocket PC PDAs to Surpass PalmOS
    PDAs in 2005*, [Business Wire]{.smallcaps}, Dec. 12, 2001 (citing
    "Worldwide PDA Markets," a market research report by eTForecasts).

[^435]: *Palm, Inc. Second Quarter, Fiscal 2002 Analyst Teleconference
    Remarks - Eric Benhamou, Chairman and Chief Executive Officer*, News
    Release, Palm, Dec. 19, 2001; *Palm, Inc. Third Quarter Fiscal 2002
    Analyst Teleconference Remarks -- Judy Bruner, Senior Vice President
    and Chief Financial Officer*, News Release, Palm, Mar. 21, 2002.

[^436]: As of December 2001, there were approximately 175,000 registered
    PalmOS third party application and software developers. *Palm
    Reports Second Quarter Revenue Up 36 Percent Over First Quarter,
    Sequential Improvement in Operating Results*, News Release, Palm,
    Dec. 19, 2001.

[^437]: *Palm i705 Handheld Debuts: Only Secure, Integrated Wireless,
    Email Solution With Web Access,* News Release, Palm, Jan. 28, 2002.
    Documents To Go is pre-loaded on all Palm i705 devices. *Id.*

[^438]: *Microsoft Rings in Pocket PC Phone Edition*, [M2
    Presswire]{.smallcaps}, Feb. 19, 2002 (citing IDC).

[^439]: *See* Section II.B.3, Mobile Data Services, *infra*.

[^440]: Arch Wireless Communications Inc., SEC Form 10-K, Mar. 21, 2002,
    at 11; Metrocall, Inc., SEC Form 10-K, Apr. 12, 2002, at 16.

[^441]: NRUF database. *See* note Error: Reference source not found,
    *supra*, for a description of this source.

[^442]: SkyTel Communications, Inc. is a wholly owned subsidiary of
    WorldCom that was acquired on October 1, 1999. *See Fifth Report*,
    at 17720-17721.

[^443]: The number of paging subscribers of the major carriers fell
    substantially during the past year. Arch Wireless's units in service
    declined 29 percent from 11.6 million at the end of 2000 to 8.2
    million at the end of 2001. Arch Wireless Communications Inc., SEC
    Form 10-K, Mar. 21, 2002, at 11. Metrocall's units in service
    declined 13 percent from 6.3 million at the end of 2000 to 5.5
    million at the end of 2001. Metrocall, Inc., SEC Form 10-K, Apr. 12,
    2002, at 16.

[^444]: Both Arch and Metrocall generates about 90 percent of their
    revenue from traditional one-way paging services. Arch Wireless
    Communications Inc., SEC Form 10-K, Mar. 21, 2002, at 4; *Last Call
    for Metrocall?*, [Washington Business Journal]{.smallcaps}, Nov. 23,
    2001, at 23.

[^445]: *See Last Call for Metrocall?*, [Washington Business
    Journal]{.smallcaps}, Nov. 23, 2001, at 23 (citing Roberta Wiggins,
    an analyst for the Yankee Group); John Sullivan, *Motorola's Exit:
    Death Knell Or New Dawn For Paging Market?*, [Wireless Data
    News]{.smallcaps}, Dec. 19, 2001 (citing analyst Herschel Shosteck
    of the Shosteck Group); Deborah Mendez-Wilson, *An International
    Mobile Network; WebLink Wireless Crosses Borders With Two-Way
    Messaging*, [Wireless Week]{.smallcaps}, Sept. 17, 2001, at 22; Arch
    Wireless Communications Inc., SEC Form 10-K, Mar. 21, 2002, at 7.
    *See* Sections II.B.2.a, Mobile Data Mobile Telephone Sector and
    II.B.2.b, Handheld Devices, *supra*; and Section II.B.3, Mobile Data
    Services, *infra*, for a further discussion of competing providers
    of advanced mobile data services.

[^446]: *See Sixth Report*, at 13405.

[^447]: *WebLink Wireless Prepares to File Plan to Emerge from Chapter
    11*, [PR Newswire]{.smallcaps}, Oct. 31, 2001. In its reorganization
    filing, WebLink announced it planned to emerge from bankruptcy as a
    stand-alone company but was also soliciting proposals from outside
    investors. Mike Dano, *WebLink's Bankruptcy Restructure Includes
    Talks with Strategic Partners*, [RCR Wireless News]{.smallcaps},
    Nov. 5, 2001, at 2.

[^448]: *Arch Agrees to Debt Restructuring Plan With Majority of Its
    Secured Creditors*, News Release, Arch Wireless, Dec. 6, 2001; *Arch
    Wireless Files Plan of Reorganization*, News Release, Arch Wireless,
    Jan. 15, 2002.

[^449]: *Metrocall Files Voluntary Chapter 11 Petition*, News Release,
    Metrocall, June 3, 2002*.* Metrocall expects to continue to provide
    service without interruption during its reorganization process.
    *Id*.

[^450]: Mike Dano, *Arch Upgrades to 2.7 ReFLEX Network*, [RCR Wireless
    News]{.smallcaps}, Nov. 5, 2001, at 4.

[^451]: Motient filed for Chapter 11 bankruptcy during 2001 but emerged
    from bankruptcy with significantly less debt on April 25, 2002. Yuki
    Noguchi, *Motient Corp. Leaves Bankruptcy, Cuts Debt*, [Washington
    Post]{.smallcaps}, Apr. 26, 2002, at E5.

[^452]: *See* Section II.B.2.b, Handheld Devices, *supra*, for a
    discussion of how handheld devices connect to the Internet
    wirelessly*.*

[^453]: Lower and Upper Paging Bands Auction Closes, *Public Notice*, DA
    01-2858, Dec. 11, 2001.

[^454]: *Id*. *See* Appendix B, Table 3, at B-6.

[^455]: John Sullivan, *Motorola's Exit: Death Knell Or New Dawn For
    Paging Market?*, [Wireless Data News]{.smallcaps}, Dec. 19, 2001.

[^456]: U.S. carriers have set varying character limits. For example,
    Verizon Wireless limits users to 120 characters, whereas Nextel
    allows users to send and receive messages up to 500 characters long.
    *See* Verizon Wireless, *Welcome to Verizon Wireless*, (visited Mar.
    7, 2002)
    \<http://www.verizonwireless.com/aboutus/products_services/mobile\_
    messenger_fact\_ sheet.shtml\>; Nextel, *Nextel -- Two-Way
    Messaging* (visited Jan. 29, 2002)
    \<http://www.nextel.com/phone_services/mobilemessaging/twowaymessaging.shtml\>.

[^457]: Brad Smith, *Signs Point To A Surge In SMS*, [Wireless
    Week]{.smallcaps}, Mar. 4, 2002 (citing GSM Association).

[^458]: *VoiceStream Wireless Launches Wireless Internet Services*, News
    Release, VoiceStream, May 10, 2000. Verizon Wireless and AT&T
    Wireless initiated SMS services during the fourth quarter of 2000.
    *AT&T Wireless Brings the International Text Messaging Craze to the
    U.S.*, News Release, AT&T Wireless, Oct. 17, 2000; *Verizon Wireless
    Customers Can Now Let Their Fingers Do The Talking*, News Release,
    Verizon Wireless, Nov. 30, 2000.

[^459]: According to company websites, carriers offering SMS include the
    following: AT&T Wireless, CenturyTel, Cingular, Einstein PCS,
    MetroPCS, Nextel, Ntelos, Sprint PCS, US Cellular, Verizon Wireless,
    VoiceStream, and Western Wireless.

[^460]: Dan Meyer, *AT&T Wireless move gives SMS legs in U.S.*, [RCR
    Wireless News]{.smallcaps}, Nov. 26, 2001.

[^461]: *Cingular to Offer Text Messaging Without Boundaries*, News
    Release, Cingular Wireless, Feb. 27, 2002; *Sprint to Expand Sprint
    PCS Short Mail to Include Intercarrier Messaging*, News Release,
    Sprint PCS, Mar. 13, 2002; *Verizon Wireless Deploys InphoMatch
    Platform To Manage Inter-Carrier Text Messaging Traffic*, News
    Release, Verizon Wireless, Apr. 9, 2002; *VoiceStream Expands
    Two-Way Text Messaging Service*, News Release, VoiceStream, Mar. 1,
    2002.

[^462]: Frank Marsala, *Mid-Quarter Look Reveals Some Positive Trends*,
    [Robertson Stephens]{.smallcaps}, May 22, 2002.

[^463]: In addition to paying service plan fees, customers must also
    purchase handsets capable of text messaging.

[^464]: Verizon Wireless, *Welcome To Verizon Wireless*, (visited Mar.
    7, 2002) \<http://www.verizonwireless.com/aboutus/products\_
    services/mobile_messenger/splash_a.shtml\>.

[^465]: Nextel, *Nextel -- Two-Way Messaging* (visited Jan. 29, 2002)
    \<http://www.nextel.com/phone_services/mobilemessaging
    /twowaymessaging.shtml\>.

[^466]: Nextel, *Nextel -- Nextel Online*, (visited Jan. 29, 2002)
    \<http://www.nextel.com/phone_service/wirelessweb/nextelonline.shtml\>;
    *Nextel -- Nextel Online Plus*, Nextel,
    \<http://www.nextel.com/phone_service/wirelessweb/
    nextelonlineplus.shtml\> (visited Jan. 29, 2002).

[^467]: Devine Kofiloto and Mike Woolfrey, *'SMS -- Unexploited
    Potential' Messaging Conference Hears*, [EMC Market
    Data]{.smallcaps}, Jan. 31, 2001.

[^468]: AT&T Wireless, *AT&T Wireless 2-Way Text Messaging Service*
    (visited Mar. 7, 2002) \<http://www.attws.com/personal/
    txt_msg/index.jhtml;dsessionid=HM4ZVMP1XT533R1M5W1CFFA\>; *Sprint
    and America OnLine Launch the AOL Instant Messenger Service on the
    Sprint PCS Wireless Web*, News Release, Sprint PCS, Oct. 19, 2000;
    VoiceStream, *VoiceStream -- products & services* (visited Jan. 29,
    2002) \<http://www.voicestream.com/aim/default.asp\>.

[^469]: Cingular Wireless, *Wireless Window -- Cingular Wireless*,
    (visited Jan. 29, 2002)
    \<http://www.mywirelesswindow.com/features\>.

[^470]: *Palm Delivers Wireless Always-on, AOL Instant Messenger(AIM)
    Service on New Palm i705 Handheld*, News Release, Palm, Jan. 28,
    2002; Patrick Seitz, *Palm Setting Its Sights on Corporate Spending
    with New i705 Device Lets Users Check Their E-Mail*, [Investor's
    Business Daily]{.smallcaps}, Jan. 29, 2002, at 5.

[^471]: eCare, E-mail correspondence, Sprint PCS, May 16, 2001.

[^472]: *See* Consumer Federation of America, Media Access Project, and
    Center for Media Education, Applications for Consent to the Transfer
    of Control of Licenses and Section 214 Authorizations by Time Warner
    Inc. and America Online, Inc., Transferors, to AOL Time Warner Inc.,
    Transferee, CS Docket No. 00-30, *Petition to Deny*, at 32-33 (filed
    Apr. 26, 2000); Testimony of Esther Dyson, Chairman, EDventure
    Holdings, FCC En Banc Hearing, CS Docket No. 00-30 (July 27, 2000);
    Testimony of Mark Cooper, Director of Research, Consumer Federation
    of America, FCC En Banc Hearing, CS Docket No. 00-30 (July 27,
    2000); Testimony of William F. Reddersen, Executive Vice President,
    BellSouth Corporation, FCC En Banc Hearing, CS Docket No. 00-30
    (July 27, 2000); Testimony of Ross Bagully, CEO, Tribal Voice Inc.,
    FCC En Banc Hearing, CS Docket No. 00-30 (July 27, 2000); Prepared
    Testimony of Preston R. Padden, Executive Vice President of
    Government Relations, The Walt Disney Co., at 3, FCC En Banc
    Hearing, CS Docket No. 00-30 (July 27, 2000).

[^473]: The wireless carriers offering wireless web service include
    ALLTEL, AT&T Wireless, Cingular Wireless, Nextel, Sprint PCS,
    Verizon Wireless, and VoiceStream. As mentioned in the *Sixth
    Report*, wireless telephone carriers began offering wireless web
    access in 1999. *Sixth Report*, at 13410.

[^474]: The terms "wireless web" and "mobile web" are used throughout
    Section II.B., Mobile Data, to mean mobile Internet access via
    mobile telephone handsets.

[^475]: As mentioned in the *Sixth Report*, the technologies and speeds
    used for wireless web services vary by mobile telephone carrier. As
    of March 2002, several carriers now offer data services at higher
    rates on their advanced wireless service networks than the speeds
    offered on their 2G networks. Verizon Wireless offers an average
    speed of 40 to 60 kbps on its cdma2000 1xRTT network, while AT&T
    Wireless, Cingular Wireless, and VoiceStream offer rates of 25 to 56
    kbps on GPRS networks installed during 2001 and 2002. For more on
    network deployment, *see* Section II.B.2.a, Mobile Data Mobile
    Telephone Sector, *supra*. Christopher Stern, *High-Speed Wireless
    Network to Debut*, [Washington Post]{.smallcaps}, Jan. 27, 2002;
    *VoiceStream Extends GET MORE Value proposition to offer High-Speed
    Wireless Data Service to Customers Nationwide*, News Release,
    VoiceStream, Nov. 14, 2001; Katie Hafner, *The Future of Cellphones
    Is Here. Sort Of.*, [New York Times]{.smallcaps}, Feb. 14, 2002.

[^476]: *See* *Sixth Report*, at 13408.

[^477]: *See* *Sixth Report*, at 13409; *U.S. Wireless Phone Penetration
    Climbs*, [Wireless Insider]{.smallcaps}, Oct. 1, 2001; Sean Buckley,
    *Mobile IP: Breaking the on-size-fits-all mentality*,
    [Telecommunications]{.smallcaps}, Sept. 2001.

[^478]: A wireless modem card allows full access to the Internet just
    like a traditional modem. The difference is that a laptop with a
    wireless modem card will access the Internet via a wireless network,
    whereas a traditional modem accesses the Internet via a wireline
    network.

[^479]: Microsoft, *Pocket Internet Explorer* (visited Mar. 19, 2002)
    \<http://www.microsoft.com/mobile/pocketpc/software/features/internetexplorer.asp\>.
    Pocket PC PDAs require the attachment of a wireless modem card in
    order to access the Internet, and users can choose to access web
    content in a text-only format. *Id.*

[^480]: Blazer can be downloaded on PalmOS devices with at least 8 MB of
    memory running PalmOS version 3.5 or higher. Blazer is not available
    for Palm i705 and VII devices, which must use the Palm.Net web
    clipping applications. As mentioned above, Handspring PDAs require
    the attachment of a mobile phone, a VisorPhone, or a wireless modem
    card in order to access the wireless Internet. See Section II.B.2.b,
    Handheld Devices, *supra.*

[^481]: Handspring, *Handspring Software: Blazer Details* (visited Mar.
    19, 2002)
    \<http://www.handspring.com/software/blazer_details.jhtml\>.

[^482]: GoAmerica, *Go.Web Service* (visited Mar. 19, 2002) \<
    http://www.goamerica.com/goweb/\>; EarthLink, *EarthLink Wireless
    Services* (visited Mar. 19, 2002)
    \<http://www.earthlink.net/mobile/\>. On December 7, 2001, EarthLink
    announced its plans to acquire the assets of OmniSky Corporation as
    part of OmniSky's Chapter 11 bankruptcy proceedings. As of that
    time, OmniSky had approximately 32,000 customers. *EarthLink
    Announces Plans to Purchase OmniSky's Subscriber Base and Key
    Operational Assets*, News Release, EarthLink, Dec. 7, 2001.

[^483]: BlackBerry, *Third Party Solutions* (visited Mar. 19, 2002)
    \<http://www.blackberry.net/products/thirdparty/index.shtml#web\>;
    EarthLink, *EarthLink Wireless Services* (visited Mar. 19, 2002)
    \<http://www.earthlink.net/mobile/\>.

[^484]: *See Sixth Report*, at 13414; Palm, *The Wireless-Ready Web with
    Web Clipping Applications* (visited Mar. 19, 2002)
    \<http://www.palm.com/products/palmi705/webclipping.html\>.

[^485]: *See* Appendix D, Table 2, at D-5.

[^486]: Verizon Wireless, *Welcome To Verizon Wireless* (visited Jan.
    29, 2002)
    \<http://www.verizonwireless.com/mobile_web_plus/index.jsp\>;
    Cingular, *My Wireless Window* (visited Jan. 1, 2002)
    \<http://www.mywirelesswindow.com/pricing\>; Sprint PCS, *Sprint PCS
    Wireless Sites* (visited Jan. 29, 2002)
    \<http://www.sprintpcs.com/wireless/wwbrowsing_getit.html\>.

[^487]: In addition to paying monthly service fees and airtime charges,
    all mobile telephone Internet customers must purchase Internet-ready
    handsets.

[^488]: VoiceStream offers wireless web service only via its GPRS data
    network. *VoiceStream Extends GET MORE Value proposition to offer
    High-Speed Wireless Data Service to Customers Nationwide*, News
    Release, VoiceStream, Nov. 14, 2001; VoiceStream, *VoiceStream --
    products & services* (visited Jan. 29, 2002)
    \<http://www.voicestream.com/
    products/services/istream/rateplans.asp\>.

[^489]: *Verizon Wireless Launches Nation's First Major Advanced
    Wireless Network: The Verizon Wireless Express Network*, News
    Release, Verizon Wireless, Jan. 28, 2002.

[^490]: AT&T Wireless offers four plans ranging from \$29.99 to \$99.99
    for 5 to 40 MB of downloaded data. AT&T Wireless, *AT&T Wireless
    GSM™ / GPRS Network -- Service Plan* (visited Jan. 29, 2002)
    \<http://www.attws.com/ mobileinternet/equip_rateplans.jhtml\>.

[^491]: The bundled voice and data plans offered by AT&T Wireless range
    from \$39.99 to \$159.99, and all plans include one MB of downloaded
    data. AT&T Wireless, *AT&T Wireless GSM™ / GPRS Network -- Service
    Plan* (visited Jan. 29, 2002)
    \<http://www.attws.com/mobileinternet/equip_rateplans.jhtml\>.

[^492]: One analyst expects the number of mobile and remote workers to
    increase by nearly 20 percent by 2004 to 55 million, up from 46
    million currently. *Palm i705 Handheld Debuts: Only Secure,
    Integrated Wireless, Email Solution with Web Access*, News Release,
    Palm, Jan. 28, 2002 (citing IDC, "U.S. Mobile and Remote Worker
    Market Forecast and Analysis 1999-2004," doc. 23020).

[^493]: *Patrick Seitz, Palm Setting Its Sights on Corporate Spending
    with New i705 Device Lets Users Check Their E-Mail*, [Investor's
    Business Daily]{.smallcaps}, Jan. 29, 2002, at 5.

[^494]: *Palm i705 Handheld Debuts: Only Secure, Integrated Wireless,
    Email Solution with Web Access*, News Release, Palm, Jan. 28, 2002
    (citing Jupiter Media Metrix, "Jupiter Metrics: Wireless
    Infrastructure," 2Q 2001 \[September\].).

[^495]: Sue Marek, *Java Will Drive Data Adoption*, [Wireless
    Week]{.smallcaps}, Mar. 18, 2002, at 1, 8 (citing a survey by Evans
    Data Group).

[^496]: 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.

[^497]: Vanessa Hua, *Palm Rides Wireless Wave*, [San Francisco
    Chronicle]{.smallcaps}, Jan. 28, 2001, at E1. Approximately 54
    percent of RIM's fiscal year 2001 (ended Feb. 28, 2002) revenue of
    \$221 million was derived from its Blackberry service. Research in
    Motion, 2001 Annual Report, at 15.

[^498]: *Nextel, RIM and Motorola Agree to Purchase Voice-enabled
    Handheld*, News Release, Nextel and RIM, Jan. 24, 2002.

[^499]: AT&T Wireless, *PocketNet Service* (visited Mar. 4, 2002)
    \<http://www.attws.com/personal/pocketnet/\>.

[^500]: *Id*.

[^501]: *Id*.

[^502]: VoiceStream, *WirelessInbox -- "Your" E-mail on Your Phone*
    (visited Mar. 4, 2002)
    \<http://www.voicestream.com/products/services/istream/wirelessinbox.asp\>;
    VoiceStream, *Introducing the iStream Wireless Data Network*
    (visited Mar. 4, 2002)
    \<http://www.voicestream.com/products/services/istream/overview.asp\>.

[^503]: VoiceStream, *WirelessInbox -- "Your" E-mail on Your Phone*
    (visited Mar. 4, 2002)
    \<http://www.voicestream.com/products/services/istream/wirelessinbox.asp\>.

[^504]: VoiceStream, *iStream Service Plans* (visited Mar. 4, 2002)
    \<http://www.voicestream.com/products/services/istream/rateplan.asp\>.
    Telephone handset users of iStream can download one MB of data per
    month for \$2.99 with additional MBs costing \$10 per MB.
    VoiceStream, *iStream Service Plans* (visited Mar. 4, 2002)
    \<http://www.voicestream.com/products/services/istream/rateplan.asp\>.
    iStream PDA customers can download 5 MB of data for \$19.99 per
    month while laptop customers can download 10 MB of data for \$39.99
    per month. VoiceStream, *iStream Service Plans* (visited Mar. 4,
    2002)
    \<http://www.voicestream.com/products/services/istream/rateplan.asp\>.
    Additional MB cost \$5 per MB for the PDA service and \$4 per MB for
    the laptop service. *Id.* User's downloaded data can consist of
    e-mail messages or web pages or a combination of the two. *Id.*

[^505]: Palm, *Wireless Email with the Palm i705 Handheld* (visited Feb.
    20, 2002) \<http://www.palm.com/products/palmi705/email.html\>.

[^506]: *Palm i705 Handheld Debuts: Only Secure, Integrated Wireless,
    Email Solution with Web Access*, News Release, Palm, Jan. 28, 2002.

[^507]: Patrick *Seitz, Palm Setting Its Sights on Corporate Spending
    with New i705 Device Lets Users Check Their E-Mail*, [Investor's
    Business Daily]{.smallcaps}, Jan. 29, 2002, at 5.

[^508]: Jon Fortt, *Microsoft Takes Another Shot at Palm with New
    Handheld OS*, [San Jose Mercury News]{.smallcaps}, Oct. 3, 2001.

[^509]: Tish Williams, *Comparing the Pocket PC with the Palm,*
    [TheStreet.Com]{.smallcaps}, Nov. 8, 2001; *Pocket PC Launch Byting
    the Palm*, [Los Angeles Times]{.smallcaps}, Oct. 18, 2001, at T2;
    *Microsoft Rings in Pocket PC Phone Edition*, News Release,
    Microsoft, Feb. 19, 2002. The security features of the VPN
    connection allowed with Pocket PC 2002 devices include password
    support with encryption, Windows 2000 password rules, and an "active
    period" after which a user's authentication ends. Marge Brown and
    Bruce Brown, *Microsoft Takes on Palm -- Again*, [PC
    Magazine]{.smallcaps}, Nov. 6, 2001, at 41.

[^510]: *GoAmerica to Support Palm i705 Enterprise Solution*, News
    Release, GoAmerica, Jan. 29, 2002.

[^511]: *Arch Wireless Launches Wireless Enterprise Solution
    Nationwide*, News Release, Arch Wireless, Jan. 29, 2002.

[^512]: Under Phase II E911 rules, wireless carriers offering
    cellular-type voice service must provide a PSAP the telephone number
    of the wireless caller and a precise measurement of the location of
    the caller, by latitude and longitude. 47 C.F.R. § 20.18(e).

[^513]: *See* FCC, *Phase II Automated Location Identification Reports*
    \<http://www.fcc.gov/911/enhanced\>.

[^514]: 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\>.

[^515]: Commission Establishes Schedule for E911 Phase II Requests by
    Small and Mid-Sized Wireless Carriers, *Public Notice*, FCC 01-302
    (rel. Oct. 12, 2001).

[^516]: *See, eg.,* Cingular Wireless, LLC, *Order*, FCC 02-132 (rel.
    May 9, 2002); AT&T Wireless Services, Inc., *Notice of Apparent
    Liability for Forfeiture*, FCC 02-142 (rel. May 20, 2002).

[^517]: 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.

[^518]: Sprint PCS First Quarterly E911 Implementation Report at 9-12,
    filed Feb. 1, 2002; Verizon E911 Status Report at 1, filed Feb. 1,
    2002; Nextel Communications, Inc. Phase II E911 Quarterly Report at
    2-5, filed Feb. 1, 2002.

[^519]: VoiceStream Wireless Corporation April 2002 Semi-Annual Report
    on E911 Phase II Implementation Plan at 13-15, filed Apr. 1, 2002;
    AT&T Wireless Services, Inc. Quarterly Report at 1-3, filed Feb. 1,
    2002; Cingular Wireless LLC First Quarterly E911 Implementation
    Report at 1-2, filed Feb. 1, 2002.

[^520]: *See, e.g.*, Verizon Enhanced 911 Status Report at 3-4, filed
    Feb. 1, 2002 (regarding completed network deployments in St. Clair
    County, IL and Lake County, IN, and planned deployments in Chicago
    and Cook County, IL; St. Louis County, MO; and Harris County, TX)

[^521]: *See* Cingular Wireless, LLC, FCC 02-132 (released May 9, 2002).

[^522]: Sprint First Quarterly E911 Implementation Report at 12-13,
    filed Feb. 1, 2002.

[^523]: Verizon Enhanced 911 Status Report at 1, filed Feb. 1, 2002.

[^524]: Sprint Second Quarterly E911 Implementation Report at 14, filed
    April 29, 2002.

[^525]: Revision of the Commission's Rules to Ensure Compatibility with
    Enhanced 911 Emergency Calling Systems Request for Waiver by
    Verizon, *Order*, 16 FCC Rcd 18364 (2001).

[^526]: *See, e.g.,* VoiceStream Wireless Corporation April 2002
    Semi-Annual Report on E911 Phase II Implementation Plan at 25, filed
    Apr. 1, 2002.

[^527]: *See, e.g., Zagat Survey And Airflash Partner To Serve Up
    Localized Restaurant Finder And Reviews To Wireless Users
    On-The-Go*, News Release, AirFlash, May 8, 2001.

[^528]: *SignalSoft Becomes First Member of Location Interoperability
    Forum*, News Release, SignalSoft Corp., Oct. 15, 2000.

[^529]: *Location Interoperability Forum Launches Draft Mobile Location
    Protocol Specifications for Public Comments,* News Release, Location
    Interoperability Forum, Dec. 3, 2001.

[^530]: *MapInfo in Cooperation with Siemens IC Mobile Makes Mobile
    Location Services a Reality as Wireless Becomes a Way of Life*, News
    Release, MapInfo, Mar. 15, 2002.

[^531]: Unlicensed spectrum is also used to provide fixed wireless
    high-speed Internet access to home and businesses in neighborhoods
    and communities across the United States. *See* Appendix A, *infra*,
    for a discussion of fixed wireless services.

[^532]: The name Bluetooth comes from the Danish King Harald Blatand II
    who peacefully unified Denmark and Norway. Doug Bedell, *The Cutting
    Edge Cuts Loose*, [Dallas Morning News]{.smallcaps}, Jan. 10, 2002;
    Lynn Greiner, *Products Looking For A Home*, [Computer Dealer
    News]{.smallcaps}, Dec. 14, 2001.

[^533]: PAN is a term used to describe the network that is created when
    wireless devices are connected in a small office or home
    environment. Motorola, *Motorola Bluetooth, Personal Area Networks*
    (visited Feb. 20, 2002)
    \<http://www.motorola.com/bluetooth/pan/pan.html\>; all talking.com,
    *What is a Personal Area Network* (visited Feb. 20, 2002)
    \<http://www.alltalking.com/apps/pan.htm\>; Wikipedia, *Personal
    area network: encyclopedia article from Wikipedia* (visited Feb. 20,
    2002) \<http://www.wikipedia.com/wiki/Personal_area_network\>.

[^534]: The Bluetooth standard calls for frequency hopping,
    spread-spectrum techniques that make 1,600 hops per second among
    different frequencies within the 2.4 GHz ISM band. Bluetooth,
    *Bluetooth Wireless, FAQ, Technical Information* (visited Feb. 20,
    2002) \<http://www.bluetooth.com/util/faq4.asp\>.

[^535]: *See Fifth Report*, at 17706. Bluetooth has been under
    development since 1994 when Ericsson began conducting a feasibility
    study. In 1998, the Bluetooth Special Interest Group (SIG) was
    formed. The group, which promotes the Bluetooth standard, has over
    2,000 adopter companies.

[^536]: Frost & Sullivan, *Bluetooth Vision On The Verge Of Reality As
    First Products Hit Mass Market*, [M2 Presswire]{.smallcaps}, Nov. 7,
    2001; Lynn Greiner, *Products Looking For A Home*, [Computer Dealer
    News]{.smallcaps}, Dec. 14, 2001.

[^537]: *Cahners In-Stat Group Says Bluetooth Chips Kick Butt*,
    [Business Wire]{.smallcaps}, Dec. 5, 2001.

[^538]: IEEE is a technical society that sponsors conferences, publishes
    technical papers, and provides a forum for the development of
    standards. IEEE standards include those for computers and
    telecommunications, specifically standards used for LANs such as
    802.11b. Harry Newton, [Newton's Telecom Dictionary: 16^th^ Expanded
    & Updated Edition]{.smallcaps}, CMP Books, July 2000, at 439.

[^539]: J. William Gurley, *The next big thing? Try 802.11b*,
    [CNET.com]{.smallcaps}, Feb. 19, 2001; Curtis Franklin, *Cut The
    Cord*, [InternetWeek]{.smallcaps}, Mar. 12, 2001, *available in*
    2001 WL 8007251; Terry Sweeney, *802.11B: One Standard Worth Waiting
    For*, [TechwebUK.com]{.smallcaps}, Nov. 16, 2000.

[^540]: Wireless Ethernet Compatibility Alliance, *Wi-Fi Value and the
    Benefit of Standards* (visited Feb. 21, 2002)
    \<http://www.wi-fi.org/benefitsfaq.asp\>.

[^541]: Greg Tally, *Back to Basics: Last Mile Broadband Trends for 2002
    and how they affect your Business*, [Boardwatch
    Magazine]{.smallcaps}, Feb. 2002.

[^542]: J. William Gurley, *The Next Big Thing? Try 802.11b*,
    [CNET.com]{.smallcaps}, Feb. 19, 2001.

[^543]: John C. Dvorak, *Wireless Whale*, [Forbes]{.smallcaps}, Mar. 5,
    2001, *available in* 2001 WL 2184050; *Michael Dell Puts Wireless in
    Focus; Sees Standards, Notebooks as Easy Way for Customers to be
    Connected*, [Business Wire]{.smallcaps}, Mar. 20, 2001. In January
    2001, Starbucks announced it would begin installing MobileStar
    Network's (now owned by VoiceStream) wireless broadband network in
    stores, allowing customers with 802.11b-enabled notebook computers,
    handheld devices, and smartphones to access broadband content and
    services in Starbucks stores. *Starbucks and Microsoft Blend Coffee
    Retailer's Expertise With Technology Leader's Software and Services
    to Deliver Wireless Cof*, News Release, Starbucks, Jan. 3, 2001.

[^544]: Paul Wuh *et al*., *Telecom Service: Wireless Communication; Why
    Wireless Carriers Should Care about Wi-Fi*, Global Equity Research,
    Goldman Sachs, May 3, 2002, at 14.

[^545]: Steve Gold, *Wi-Fi Access Coming To More Than 400 Airports,
    Hotels*, [Newsbytes]{.smallcaps}, Sept. 27, 2001.

[^546]: Boingo Wireless, *Boingo Wireless -- Market Overview* (visited
    May 22, 2002) \<http://www.boingo.com/marketoverview.html\>.

[^547]: *Id*.

[^548]: Paul Wuh *et al*., *Telecom Service: Wireless Communication; Why
    Wireless Carriers Should Care about Wi-Fi*, Global Equity Research,
    Goldman Sachs, May 3, 2002, at 12.

[^549]: *Id*.

[^550]: Amendment of Part 15 of the Commission's Rules Regarding Spread
    Spectrum Devices and Wi-LAN, Inc. Application for Certification of
    an Intentional Radiator Under Part 15 of The Commission's Rules,
    *Further Notice of Proposed Rulemaking And Order*, 16 FCC Rcd 10036
    (2001).

[^551]: *See* Section II.B.3.e, Location-Based Services, *supra.*

[^552]: Many of these devices use a small screen and an extensive
    database contained on DVD or CD-ROM to display maps and directions.
    The DVD- and CD-ROM-dependent devices are available for about
    \$2,000, including installation. Bill Howard, *The Right Direction;
    using GPS systems*, [PC Magazine]{.smallcaps}, Feb. 12, 2002; Jill
    Amadio, *The Thinker: Watch Out! Your Car May Be Getting Smarter
    Than You; Wheels; Lexus Link Navigational System*,
    [Entrepreneur]{.smallcaps}, Feb. 1, 2002; Micheline Maynard,
    *Personal Business; Navigation Aids: No Longer Just for Luxury
    Cars*, [New York Times]{.smallcaps}, Jan. 27, 2002.

[^553]: Steve Ditlea, *Wheels Online*, [MC Technology Marketing
    Intelligence]{.smallcaps}, March 1, 2001, *available in* 2001 WL
    15717085.

[^554]: There are three OnStar service plans: Safe & Sound, Directions &
    Connections, and Luxury & Leisure. The Safe & Sound plan offers live
    connection to an OnStar operator, remote access to the vehicle's
    horn, door locks and headlights, and contact with public safety
    officials if the airbag deploys. This plan costs \$16.95 per month
    or \$199 per year. In addition to the basic service, the Directions
    & Connections plan offers directions as well as information services
    such as finding hotels, ATMs, restaurants, and service stations.
    This plan costs \$34.95 per month or \$399 per year. The Luxury &
    Leisure plan adds one premium service to the Directions &
    Connections plan, Personal Concierge Service. Subscribers to this
    plan may obtain tickets, purchase gifts, and receive other
    assistance through a live OnStar concierge operator. This plan costs
    \$69.95 per month or \$799 per year. OnStar, *What is OnStar:
    Frequently Asked Questions* (visited Mar. 13, 2002)
    \<http://www.onstar.com/visitors/html/ao_faq.htm\>; OnStar, *What is
    OnStar: Services* (visited Mar. 13, 2002)
    \<http://www.onstar.com/visitors/html/ao_features.htm\>.

[^555]: The number of subscribers includes the owners of GM models who
    receive the service free for one year whether they use it or not.

[^556]: LoJack Corporation, SEC Form 10-K/A, Mar. 13, 2000.

[^557]: LoJack Corporation, *Company Overview* (visited Apr. 29, 2002)
    \<http://www.lojack.com/about/index.htm\>.

[^558]: *See* Appendix D, Table 4, at D-9 for an overview of their
    services.

[^559]: Itron, Inc., SEC Form 10-K/A, Mar. 1, 2002, at 4.

[^560]: *See Sixth Report*, at 13430. Schlumberger no longer reports
    results on its telemetry business unit.

[^561]: *See* Appendix D, Table 4, at D-9 for the details on the
    services offered by these carriers.

[^562]: *See Fifth Report*, at 17727.

[^563]: *See* Appendix D, Table 4, at D-9.

[^564]: *See* Section A.(i), Subscriber Growth, *supra*.

[^565]: *See* Section II.b Market Performance, and Section II.d, Pricing
    Data and Trends, *supra*.

[^566]: *See* Section II.c, Digital Deployment, *supra*.

[^567]: *See* Section A.(vi), Market Entry , *supra*.

[^568]: *See* Section II.e, Wireless/Wireline Competition, *supra*.

[^569]: *See* note Error: Reference source not found, *supra*.

[^570]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *supra.*

[^571]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *supra*.

[^572]: *See* Section II.B.2.c, Paging Sector, *supra*.

[^573]: *See* Section II.B.2.b, Handheld Devices, *supra*.

[^574]: *See* Section II.B.3., Mobile Data Services, *supra.*

[^575]: *See* Section II.B.2.b.(i), Smartphones, *supra*.

[^576]: *See* Section II.B.2.a, Mobile Data Mobile Telephone Sector,
    *supra*.

[^577]: *Spectrum Cap Order* at ¶ 33. It is important to note that these
    concentration levels are present with the spectrum aggregation
    limits intact. The majority does not explore the consequences for
    lifting the limits on HHI, as I believe it was required to do.
    Additionally, the decreases in HHI-measured concentration that the
    majority relies upon, *id*. at 32, occurred while the limits were in
    place.

[^578]: Leap Reply Comments in Spectrum Cap Proceeding at p. 28.

[^579]: Spectrum Cap Order at ¶ 40.

[^580]: *Report* at p. 19

[^581]: "Fixed wireless" services are also sometimes referred to as
    "wireless broadband" or "wireless DSL."

[^582]: *See Sixth Report* at 13433-13437. In a fixed wireless access
    system, a provider attaches a radio transmitter to a customer's
    premises that communicates with the provider's central antenna site.
    This antenna site acts as the gateway to the PSTN or the Internet.
    This technology functions as a replacement for the "last mile" of
    copper wire that has traditionally provided individual customers
    with telecommunications services, and thus allows wireless providers
    to compete with a traditional wireline service providers. The "last
    mile" is also referred to as the "local loop"; thus, fixed wireless
    access is often referred to as "Wireless Local Loop," or "WLL" for
    short. WLLs afford fixed wireless competitors direct access to an
    individual customer's building, thereby lessening their reliance on
    the facilities of local exchange carriers ("LECs").

[^583]: *See Sixth Report,* at 13433-13434 and *Fifth Report*, at 17785.
    Fixed wireless technology generally has lower network deployment
    costs compared to wireline service and is better suited to serve
    rural and underserved markets.

[^584]: What is commonly referred to as MDS or wireless cable 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.

[^585]: The WCS band at 2305-2320 MHz and 2345-2360 MHz surrounds the
    Digital Audio Radio Service ("DARS") spectrum at 2320-2345 MHz and
    is used by licensees Sirius Satellite Radio and XM Radio to offer
    digital satellite radio service. In order to augment their satellite
    networks and achieve nationwide coverage, DARS licensees are seeking
    to deploy terrestrial repeater networks that have the potential to
    cause interference. Therefore, in November 2001, the Commission
    sought comment on specific proposals to resolve interference issues
    between DARS and WCS, ITFS, and MDS licensees related to these
    repeater networks. *See* Request for Further Comment on Selected
    Issues Regarding the Authorization of Satellite Digital Audio Radio
    Service Terrestrial Repeater Networks, *Public Notice*, DA 01-2570
    (rel. Nov. 1, 2001).

[^586]: "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).

[^587]: 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.

[^588]: 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.

[^589]: *See Sixth Report*, at 13446-13447.

[^590]: 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).

[^591]: *See Sixth Report*, at 13447. In November 2001, Teligent
    announced it would discontinue service to all but 4,000 of its
    remaining customers, and that it would only provide private line
    service (not Internet access or local phone service) to those 4,000.
    Tony Weber, *As Latest Plan Falls Through, Teligent Short of
    Options*, [Telephony]{.smallcaps}, Nov. 26, 2001. At the end of
    2000, Teligent served 35,500 customers, and, as of April 2001, it
    operated in 43 U.S. markets. *See* *Sixth Report*, at 13447-13448.

[^592]: *Bankruptcy Court Approves Assets Transfer from Teligent to
    NextWave*, [Global Wireless]{.smallcaps}, Mar. 1, 2002, at 2. In
    January 2002, Teligent hired Venture Assets Group to manage the sale
    of 21 of its central offices in 17 states. *Venture Asset Group to
    Manage Sale of Teligent Central Offices*, [PR Newswire]{.smallcaps},
    Jan. 24, 2002. Teligent also sold its data and videoconference
    subsidiary, Executive Conference Inc., in January 2002 to Bahrain's
    Investcorp for \$60 million. Greg Johnson, *Teligent Hires Venture
    Asset*, [Daily Deal]{.smallcaps}, Jan. 25, 2002.

[^593]: *Teligent Announces Lender Support for Fixed Wireless Successor
    Company*, News Release, Teligent, Jan. 23, 2002; Yuki Noguchi,
    *Teligent Lenders Agree to Plan To Revive Firm*, [Washington
    Post]{.smallcaps}, Jan. 24, 2002, at E-1. Former Teligent COO, Jim
    Continenza, plans to become the CEO of the new company. The deal
    still requires the approval of the bankruptcy court and the
    Commission. *Id*.

[^594]: *Id.*; *Lenders Give Teligent New Life*, [RCR Wireless
    News]{.smallcaps}, Jan. 28, 2002, at 16.

[^595]: *See Sixth Report*, at 13446. Prior to its bankruptcy, Winstar
    served approximately 30,000 customers, 1,040,000 access lines, and
    4,400 buildings on-net in 60 markets. *See Sixth Report*, at 13448.

[^596]: Hilary Smith, *IDT Gets Busy with Winstar Makeover*, [RCR
    Wireless News]{.smallcaps}, Mar. 18, 2002, at 53; *IDT Buys
    Winstar*, [Washington Technology]{.smallcaps}, Jan. 7, 2002.

[^597]: Hilary Smith, *IDT Gets Busy with Winstar Makeover*, [RCR
    Wireless News]{.smallcaps}, Mar. 18, 2002, at 53; *IDT Corporation
    Announces Strategic Plan for Its Winstar Communications Subsidiary*,
    [Business Wire]{.smallcaps}, Mar. 8, 2002.

[^598]: *IDT Corporation Announces Strategic Plan for Its Winstar
    Communications Subsidiary*, [Business Wire]{.smallcaps}, Mar. 8,
    2002.

[^599]: *See Sixth Report*, at 13446.

[^600]: *Lenders Give Teligent New Life*, [RCR Wireless
    News]{.smallcaps}, Jan. 28, 2002, at 16.

[^601]: *See Sixth Report*, at 13449.

[^602]: *XO Communications Files for Chapter 11 Bankruptcy Protection*,
    [Dow Jones Business News]{.smallcaps}, June 17, 2002.

[^603]: *Id*.

[^604]: For \$34.95 per month, AT&T's Digital Broadband service gave
    users up to four voice lines, unlimited local calling, long distance
    calling at five cents per minute for in-state calls and seven cents
    per minute for out-of-state calls, three advanced calling features,
    and unlimited, "always-on" Internet access for up to five computers
    with downstream speeds of up to 512 kbps and upstream speeds of 128
    kbps. *See Sixth Report*, at 13440-13441.

[^605]: Dallas-Ft. Worth and Houston, TX; Los Angeles and San Diego, CA;
    and Anchorage, AK. *See Sixth Report*, at 13440. AT&T was using its
    broadband PCS spectrum for Digital Broadband in Dallas, Anchorage,
    and San Diego, and was using its WCS spectrum licenses to offer the
    service in Los Angeles and Houston. *Id.*

[^606]: *See Sixth Report*, at 13440.

[^607]: *AT&T Wireless Exits Fixed Wireless, Takes \$1.3 Billion
    Charge*, [Communications Daily]{.smallcaps}, Oct. 24, 2001. The
    company did state it would continue to hold its WCS licenses, and
    that it might use the tower capacity that it had deployed for the
    fixed wireless service to expand its mobile capacity instead. *Id.*
    (citing CFO Joseph McCabe). AT&T Wireless sold its fixed wireless
    assets, not including its licenses, to equipment manufacturer Netro
    Corp. in January 2002. Deborah Solomon, *AT&T Wireless to Sell
    Fixed-Wireless Assets to Netro for \$45 Million in Cash and Stock*,
    [Wall Street Journal]{.smallcaps}, Jan. 15, 2002.

[^608]: Phoenix and Tucson, AZ; San Francisco, Oakland, San Jose, and
    Fresno, CA; Denver, Boulder, and Colorado Springs, CO; Melbourne,
    FL; Wichita, KS; Detroit, MI; Oklahoma City, OK; Houston, TX; Salt
    Lake City, UT; and Chicago, IL. *See* *Sprint Introduces New
    Broadband Fixed Wireless Service to Chicago's Residential and Small
    Business Customers*, News Release, Sprint, Mar. 26, 2001.

[^609]: Sue Marek, *Sprint Halts MMDS Rollout; Fixed Wireless Setbacks
    Are Sending U.S. Vendors Scurrying For Better Solutions And More
    Promising Markets. Analysts Say Consolidation Is Near*, [Wireless
    Week]{.smallcaps}, Oct. 29, 2001, at 40.

[^610]: Denise Pappalardo, *Worldcom Adds Wireless MMDS Area*, [Network
    World]{.smallcaps}, Aug. 20, 2001, at 23 (citing Lindsay Schroth, an
    analyst at the Yankee Group: "MMDS is not readily available because
    service providers are waiting for next-generation equipment to come
    to market."); *The Yankee Group Projects That Worldwide Market for
    High Frequency Fixed Wireless Solutions Will Grow to \$1.9 Billion
    in 2006*, [Business Wire]{.smallcaps}, Nov. 8, 2001 ("\[D\]espite
    the disillusionment caused by slow growth in 2001, there is a market
    for high-frequency (HF) point-to-multipoint products. However, the
    market for HF PMP solutions is still emerging, and there are issues
    yet to be resolved by both vendors and carriers that use this
    technology").

[^611]: Michael Grebb, *Can Broadband Save MMDS?*,
    [Cablevision]{.smallcaps}, May 28, 2001, at 32 (citing Andy Fuertes,
    senior vice president of communications technology at Allied
    Business Intelligence: "Combining cellularization with
    non-line-of-sight technologies could lower the cost of providing
    MMDS service significantly. ... \[With non-line-of-sight
    technology,\] "there's the potential for more self-install....That
    takes the massive cost of the truck roll out of there." Fuertes
    predicts that self-installs will be commonplace in MMDS operations
    within two years.); *Wireless Expected To Challenge Cable, DSL For
    SOHO Customers*, [Business Communications Review]{.smallcaps}, June
    1, 2001, at 8 (citing Allied Business Intelligence: "Technology
    breakthroughs that allow for non-line-of sight applications are
    being introduced, boosting the prospects for multichannel multipoint
    distribution service (MMDS) and broadband wireless access (BWA)
    systems."). However, analysts believe these non-line-of-sight
    technologies will not be ready for full-scale deployment until at
    least 2003. *See* Sinead Carew, *Could Fixed Wireless Still Have Its
    Day?*, [ComputerWire]{.smallcaps}, Oct. 30, 2001 (citing the Yankee
    Group); Denise Pappalardo, *Fixed Wireless Takes Some Lumps*,
    [Network World]{.smallcaps}, Nov. 5, 2001, at 33 (citing Maribel
    Dolinov, senior analyst at Forrester Research).

[^612]: Michael Bartlett, *Fixed Wireless System To Join Broadband
    Access Race -- Study*, [Newsbytes]{.smallcaps}, Aug. 29, 2001, at 9
    (citing Lindsay Schroth, an analyst with the Yankee Group:
    "\[L\]ine-of-sight restrictions are hampering deployment of MMDS
    fixed wireless systems. ... \[OFDM has\] spectral efficiency \[and\]
    several vendors are working on next-generation technologies that
    address the limitations of MMDS fixed wireless systems." *See Sixth*
    Report, at 13435 and *Fifth Report,* at 17793.

[^613]: *See Sixth Report*, at 13435.

[^614]: WorldCom holds MDS licenses covering approximately 45 million
    households in 78 markets. The company also holds WCS licenses, which
    it is reportedly using in conjunction with MDS spectrum to offer
    service in Memphis, TN; Jackson, MS; and Baton Rouge, LA. *See Sixth
    Report*, at 13442.

[^615]: As of January 2001, the company had launched service in Memphis,
    TN; Baton Rouge, LA; and Jackson, MS, and was running service trials
    in Boston, MA and Dallas-Fort Worth, TX. *See Sixth Report*, at
    13442.

[^616]: Lafayette and Baton Rouge, LA; Bakersfield, CA; Montgomery, AL;
    Jackson, MS; Hartford, CT; Chattanooga and Memphis, TN; Tallahassee
    and Pensacola, FL; Minneapolis, MN; Springfield, MA; and Kansas
    City, KC. *WorldCom Launches New High-Speed, Fixed Wireless Internet
    Service in Lafayette*, News Release, WorldCom, Feb. 21, 2002.

[^617]: 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 CFR 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
    wireless LAN/WAN connections within airports, hotels, and office
    buildings as well as across larger areas such as corporate and
    college campuses. *See* Section II.B.3.f, Short-Range Data
    Transmission, *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.

[^618]: 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.*

[^619]: *See* *Sixth Report*, at 13444.

[^620]: Sinead Carew, *Could Fixed Wireless Still Have Its Day?*,
    [ComputerWire]{.smallcaps}, Oct. 30, 2001 (citing Lindsay Schroth,
    an analyst at the Yankee Group, who said, "Fixed wireless is not
    going to be the market that people thought, but there will still be
    a place for it.... Rather than pitching their wares against DSL or
    cable, operators should go after niche markets like rural areas
    outside of the reach of DSL.").

[^621]: *Fixed Wireless No Wipeout, Despite Recent Troubles*, [Network
    World]{.smallcaps}, June 4, 2001, at 38 (citing Peter Jarich of the
    Strategis Group: "We see the technology as being primarily
    residential.... We're not seeing business as the right way to go.
    ... Business users have a range of connectivity options to choose
    from, and they're more concerned about quality of service and
    reliability than are residential users."; and citing Chris Whitely
    of Insight Research: "When businesses decide to go with a fixed
    wireless link, it's often as a back-up connection, or for less
    critical traffic only.").

[^622]: Alex Salkever, *Broadband\'s Next Wave: Wireless?*, [Business
    Week Online]{.smallcaps}, May 17, 2001 (citing Peter Jarich of the
    Strategis Group).

[^623]: Eve Tahmincioglu, *For High-Speed Access to the Web, a
    Dish-to-Dish Route*, [New York Times]{.smallcaps}, Oct. 11, 2001, at
    G9 (citing Cahners In-Stat Group).

[^624]: *See* Appendix E, Map 10, p. E-11.

[^625]: Many of these lowerband providers serve only business customers.
    Residential fixed wireless Internet access is available in at least
    298 different counties. These counties contain approximately 64
    million people or 23 percent of the U.S. population.

[^626]: *See Sixth Report*, at 13400.

[^627]: 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, *First Report and Order and Memorandum
    Opinion and Order*, 16 FCC Rcd 17222 (2001).

[^628]: Jim Barthold, *Fixed Wireless Eyes Mobile Future*,
    [Telephony]{.smallcaps}, October 1, 2001 (John Schwartz, president
    of the Instructional Telecommunications Foundation, stated, "We do
    have an evolution to make now."; Leo Cyr, president and chief
    operating officer of Clearwire Technologies, which serves ITFS
    licensees, said, "It gives you some new service possibilities,
    especially with portability."; Charles Riggle, vice president of
    marketing and business development at NextNet Wireless: "This ruling
    really plays into our hands ... We're uniquely positioned to take
    advantage."; Peter Jarich, director of Global Broadband Research for
    the Strategis Group: "It doesn't look like \[Sprint PCS and
    WorldCom\] are committed to fixed. ... In fact, everyone wonders if
    they're \[both\] going to stick with their MMDS fixed wireless plans
    or move to deploy 3G.").

[^629]: 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, *Memorandum Opinion and Order and
    Further Notice of Proposed Rulemaking*, 16 FCC Rcd 16043 (2001). In
    the 50 largest U.S. markets, the 2150-2162 MHz band is allocated to
    MDS, while in the rest of the country only 10 megahertz at 2150-2160
    MHz is used for MDS. *Id.*

[^630]: Under an informal agreement among MDS licensees, the principal
    use of this spectrum is for upstream communications to hub receiving
    facilities. *Id.*

[^631]: The auction did not take place because only four bidders applied
    for the four licenses. The government awarded the licenses to the
    four applicants at the reserve price.

[^632]: Of this total, 125 MHz was sold at auction, and 20 MHz was
    reserved for new entrants. Entrants who succeeded in winning a
    license in the auction phase were given the option of purchasing an
    additional 10 MHz of spectrum apiece at a fixed price.

[^633]: One of the four licenses was returned after its award, and is to
    be re-assigned.

[^634]: The auction did not take place because only three bidders made
    initial offers for the four licenses. The licenses were awarded at
    the reserve price to each of the three bidders who submitted initial
    offers.