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 Federal  Communications  Commission  FCC  01-  192 
 Before  the 
 Federal  Communications  Commission 
 Washington,  D.  C.  20554 


 In  the  Matter  of 
 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 


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 SIXTH  REPORT 
 Adopted:  June  20,  2001  Released:  July  17,  2001 
 By  the  Commission: 
 Table  of  Contents 
 Page  I.  INTRODUCTION 
 .......................................................................................................................  3  A.  Overview 
 .........................................................................................................................  3 


 B.  Status  of  Competition  ......................................................................................................  4 


 C.  Industry  Development  ......................................................................................................  5 
 II.  THE  CMRS  INDUSTRY  ............................................................................................................  9 
 A.  Mobile  Telephony  ............................................................................................................  9 


 1.  Mobile  Telephone  Overview  and  Analysis  ...........................................................  9 
 a.  Market  Structure  ..............................................................................................  9 
 b.  Market  Performance  .......................................................................................  21 
 c.  Continued  Rise  of  Digital  ...............................................................................  25 
 d.  Pricing  Data  and  Trends  .................................................................................  27 
 e.  Wireless/  Wireline  Competition  .......................................................................  32 
 2.  Other  Competitors:  Resellers  and  Satellite  Operators  .........................................  34 
 a.  Resellers  ........................................................................................................  34 
 b.  Satellite  Operators  .........................................................................................  35 
 3.  International  Developments  ...............................................................................  39 
 a.  Foreign  Investment  in  U.  S.  Mobile  Operators  .................................................  39 
 b.  U.  S.  Investment  in  Foreign  Mobile  Operators  .................................................  39 
 c.  International  Comparisons  ..............................................................................  41 
 B.  Mobile  Data  ..................................................................................................................  46 
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 1.  Introduction  ......................................................................................................  46 
 a.  Domestic  Developments  .................................................................................  46 
 b.  International  Developments  ............................................................................  47 
 c.  3G  Developments  ...........................................................................................  48 
 2.  Current  Offerings  ..............................................................................................  53 
 a.  Paging/  Messaging  ..........................................................................................  53 
 b.  Mobile  Telephone  Operator  Offerings  ............................................................  59 
 c.  Handheld  Devices  ...........................................................................................  64 
 d.  Dedicated  Data  Networks  ...............................................................................  69 
 3.  Developing  Mobile  Data  Services  ......................................................................  71 
 a.  WAP  .............................................................................................................  71 
 b.  M-  Commerce  .................................................................................................  73 
 c.  Location-  Based  Services  .................................................................................  74 
 d.  Short  Range  Data  Transmissions  ....................................................................  77 
 4.  Telemetry  and  Telematics  ..................................................................................  80 
 III.  CONCLUSION  .........................................................................................................................  82 
 IV.  ADMINISTRATIVE  MATTERS  ..............................................................................................  83 


 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 
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 I.  INTRODUCTION 
 A.  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 
 (  Commission)  to  submit  annual  reports  that  analyze  competitive  conditions  in  the  industry.  3  This  report 
 is  the  sixth  of  the  Commissions  annual  reports  on  the  state  of  CMRS  competition.  4 


 CMRS  includes  a  large  number  of  terrestrial  services  and  also  includes  mobile  satellite  services  involving 
 the  provision  of  such  service.  5  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.  6  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. 


 The  structure  of  this  report  differs  from  the  structure  of  the  Fifth  Report  7  because  it  focuses  on  two 
 categories  of  wireless  services:  mobile  telephony  8  and  mobile  data.  9  This  is  a  departure  from  the  reports 


 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  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. 


 5  47  CFR  20.9. 


 6  See,  e.  g.,  Section  II.  A.  2.  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. 


 7  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).  A  copy  of  the  Fifth  Report  that  includes  color  versions  of  the  maps 
 may  be  found  on  the  Commissions  Internet  site  at  <http://  www.  fcc.  gov/  wtb/  reports/  fc000289.pdf>. 


 8  This  report  defines  the  mobile  telephone  segment  to  include  the  provision  of  mobile  telephony  services  by 
 cellular,  broadband  Personal  Communications  Services  (  broadband  PCS),  and  digital  Specialized  Mobile  Radio 
 (  SMR)  operators. 
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 previous  editions,  in  which  there  was  also  a  separate  section  for  dispatch  services.  While  traditional 
 dispatch  service  continues  to  be  provided,  10  there  has  been  an  increasing  convergence  of  services  provided 
 by  dispatch  and  other  mobile  telephony  providers.  11  Moreover,  public  information  regarding  dispatch 
 services,  as  distinct  from  mobile  telephony  services,  has  become  more  limited.  In  the  Fifth  Report,  public 
 information  was  available  regarding  four  providers  of  dispatch  services.  Two  of  these  providers,  Nextel 
 Communications,  Inc.  (  Nextel)  and  Southern  LINC,  a  unit  of  energy  concern  Southern  Company,  offer 
 dual,  mobile  telephony-  dispatch  services  that  straddle  the  mobile  telephony  and  dispatch  sectors.  Of  the 
 other  two  major  providers  of  dispatch  services  discussed  in  the  Fifth  Report,  Chadmoore  Wireless  Group, 
 Inc.  (  Chadmoore)  and  Mobex  Communications,  Inc.  (  Mobex),  Nextel  has  announced  plans  to  acquire 
 Chadmoore  and  buy  Mobexs  SMR  licenses.  12  Therefore,  for  purposes  of  this  report,  it  is  more 
 appropriate  to  analyze  these  services  as  part  of  the  mobile  telephony  sector. 


 In  addition,  we  no  longer  analyze  the  broadband  PCS  and  cellular  sectors  separately  within  the  mobile 
 telephony  section.  As  noted  above,  this  report  bases  its  analysis  on  a  consumer-  oriented  view  of  wireless 
 services.  While  some  differences  remain  between  analog  (traditionally  cellular)  and  digital  (traditionally 
 broadband  PCS)  services,  many  of  the  largest  operators  hold  both  cellular  and  broadband  PCS  licenses, 
 and  most  use  digital  technology  with  both  types  of  licenses.  More  than  62  percent  of  all  subscribers 
 currently  have  digital  service,  and  from  a  consumers  perspective  digital  service  in  the  cellular  band  is 
 virtually  identical  to  digital  service  in  the  PCS  band.  13 


 We  emphasize  that  the  two  service  categories  discussed  in  consumer-  oriented  terms  in  this  report  are  not  as 
 clearly  delineated  when  viewed  from  the  carriers  perspective.  For  example,  many  mobile  telephony 
 operators  also  offer  mobile  data  services.  Therefore,  while  these  service  categories  are  used  to  provide 
 structure  for  this  CMRS  competition  report,  the  Commissions  view  of  operators  is  not  limited  by  the 
 categories  in  which  this  report  places  them. 


 B.  Status  of  Competition 
 In  the  year  2000,  the  CMRS  industry  continued  to  experience  increased  competition  and  innovation  as 


 9  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.  Participants  include  both  CMRS  and 
 non-  CMRS  providers,  many  of  whom  also  offer  mobile  telephony  services. 


 10  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,  DA  01-  947  (rel.  Apr.  17,  2001)  (  Motorola 
 Order).  Dispatch  and  SMR  are  often  used  interchangeably,  although  SMR  refers  to  specific  spectrum  ranges. 
 See  Section  II.  A.  1.  a(  i),  Spectrum  Allocation,  infra. 


 11  See  Dan  Meyer,  The  Winds  Of  Change:  Southern  LINC,  Nextel  Partners  Define  Their  Roles  In  Market, 


 RCR  RADIO  COMMUNICATIONS  REPORT,  Nov.  13,  2000;  and  note  47,  infra.  See  also,  Motorola  Order,  at  12.  The 
 Wireless  Telecommunications  Bureau  noted  in  that  Order  that  it  recognized  the  increasing  convergence  of  CMRS 
 services  and  that  it  may  well  adopt  a  broader  market  definition  in  reviewing  future  transactions.  Nothing  in  this 
 report  should  be  construed  as  the  Commission  taking  such  action  on  that  market  definition. 


 12  See  Section  II.  A.  1.  a(  iii)(  a),  Combinations,  Sales,  and  License  Swaps,  infra. 


 13  See  Section  II.  A.  1.  c,  Continued  Rise  of  Digital,  infra. 
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 evidenced  by  lower  prices  for  consumers  and  increased  diversity  of  service  offerings.  The  process  of 
 carriers  building  nationwide  footprints  14  continues  to  be  a  significant  trend  in  the  mobile  telephone  sector. 
 The  year  2000  saw  a  number  of  operators  fill  in  gaps  in  their  coverage  through  mergers,  acquisitions,  and 
 license  swaps.  15  In  parallel  with  the  process  of  footprint  building,  mobile  telephone  operators  continue  to 
 deploy  their  networks  in  an  increasing  number  of  markets,  expand  their  digital  footprints,  and  develop 
 innovative  pricing  plans. 


 Since  the  Fifth  Report,  the  mobile  data  sector  has  continued  its  transition  from  paging/  messaging  to  mobile 
 Internet  access  services.  Numerous  companies,  including  paging/  messaging  carriers,  mobile  telephone 
 carriers,  handheld  personal  digital  assistant  (  PDA)  manufacturers,  and  dedicated  data  network  operators, 
 now  offer  a  myriad  of  mobile  Internet  access  products  on  a  variety  of  mobile  devices.  Since  late  1999, 
 seven  major  mobile  telephone  operators  have  begun  offering  mobile  data  services,  including  wireless 
 web,  Short  Messaging  Service  (  SMS),  and  e-  mail,  on  mobile  telephone  handsets.  16  Four  of  those  seven 
 operators  reported  mobile  Internet  usage  at  the  end  of  2000  and  had  a  combined  total  of  2.5  million  mobile 
 Internet  users.  17  While  the  number  of  traditional  one-  way  paging  subscribers  declined  in  2000,  the  number 
 of  advanced  messaging  subscribers  increased  as  paging/  messaging  carriers  continued  to  roll  out  advanced 
 messaging  and  Internet-  based  services.  18  In  addition,  mobile  Internet  access  is  currently  available  on  three 
 types  of  handheld  PDA  devices.  19 


 C.  Industry  Development 
 Mobile  Telephony.  Since  the  release  of  the  Fifth  Report,  the  mobile  telephony  sector  of  CMRS  has 
 experienced  another  year  of  strong  growth  and  competitive  development.  20  In  the  twelve  months  ending 
 December  2000,  the  mobile  telephony  sector  generated  over  $52.5  billion  in  revenues,  increased 
 subscribership  from  86.  0  million  to  109.5  million,  and  produced  a  nationwide  penetration  rate  of  roughly 


 14  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. 
 15  See  Section  II.  A.  1.  a(  iii)(  a),  Combinations,  Sales,  and  License  Swaps,  infra. 


 16  See  Section  II.  B.  2.  b,  Mobile  Telephone  Operator  Offerings,  infra.  Unless  otherwise  noted,  the  terms 
 wireless  web  and  mobile  web  are  used  throughout  the  Introduction  and  Section  II.  B,  Mobile  Data,  to  mean 
 mobile  Internet  access  via  mobile  telephone  handsets. 


 17  Id.  Because  some  mobile  telephone  carriers  offer  mobile  Internet  access  without  a  separate  subscription 


 beyond  voice  service,  the  term  users  is  used  instead  of  subscribers.  Mobile  telephone  carriers  generally  define 
 their  mobile  Internet  users  as  customers  who  have  connected  to  the  Internet  using  their  mobile  handsets  within  a 
 certain  period  of  time. 


 18  See  Section  II.  B.  2.a,  Paging/  Messaging,  infra. 


 19  See  Section  II.  B.  2.  c,  Handheld  Devices,  infra. 
 20  All  of  the  data  in  this  report  are  taken  from  publicly  available  sources.  These  sources  include:  trade 
 associations,  securities  analysts,  company  releases  and  web  sites,  filings  with  the  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. 
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 39  percent.  21  We  note  that  39  percent  represents  an  overall  average  and  provides  no  information  on 
 segment-  specific  growth  rates  or  market  penetration  by  demographic  variables  (e.  g.,  penetration  rates  in 
 rural  vs.  urban  areas).  Broadband  PCS  carriers  and  digital  SMR  providers  continue  to  deploy  their 
 networks.  22  To  date,  259  million  people,  or  almost  91  percent  of  the  total  U.  S.  population,  have  access  to 
 three  or  more  different  operators  (cellular,  broadband  PCS,  and/  or  digital  SMR  providers)  offering  mobile 
 telephone  service  in  the  counties  in  which  they  live.  23  Over  214  million  people,  or  75  percent  of  the  U.  S. 
 population,  live  in  areas  with  five  or  more  mobile  telephone  operators  competing  to  offer  service.  24  And 
 133  million  people,  or  47  percent  of  the  population,  can  choose  from  at  least  six  different  mobile  telephone 
 operators.  25 


 The  rise  of  digital  technology  in  the  mobile  telephone  sector  continues  unabated.  26  The  combined  effect  of 
 increasing  digital  and  declining  analog  customers  has  been  that,  at  the  end  of  2000,  digital  customers  made 
 up  62  percent  of  the  industry  total,  up  from  51  percent  at  the  end  of  1999  and  30  percent  two  years  ago.  27 
 Finally,  in  part  because  of  growing  competition  in  the  marketplace,  it  appears  that  the  average  price  of 
 mobile  telephone  service  has  fallen  substantially  during  the  year  since  the  Fifth  Report,  continuing  the  trend 
 of  the  last  several  years.  28  According  to  the  U.  S.  Department  of  Labor  Bureau  of  Labor  Statistics,  the 
 price  of  mobile  telephone  service  declined  by  12.  3  percent  during  2000.  29  Another  analyst  estimates  that 
 mobile  telephone  prices  fell  25  percent  between  1999  and  2000.  30 


 Mobile  Data.  This  report  divides  current  mobile  data  offerings  into  four  categories:  paging/  messaging 
 services;  mobile  telephone  Internet  access;  data  services  offered  over  handheld  PDA  devices  with  a  mobile 
 Internet  connection;  and  mobile  data  offerings  by  dedicated  data  network  operators.  In  addition  to  these 
 current  mobile  data  offerings,  there  are  a  number  of  mobile  data  services  and  technologies  in  development, 
 including  Wireless  Application  Protocol  (  WAP),  location-  based  services,  and  m-  commerce,  which  will 


 21  See  Appendix  C,  Table  1,  at  C-  2.  The  nationwide  penetration  rate  is  calculated  by  dividing  total  mobile 
 telephone  subscribers  by  the  total  U.  S.  population.  According  to  the  2000  Census,  the  population  of  the  United 
 States  on  April  1,  2000  was  283.0  million.  In  1999,  the  U.  S.  population  was  estimated  to  be  271.0  million.  See 
 Fifth  Report,  at  17663.  The  1999  population  estimate  appears  to  be  lower  than  what  the  actual  population  was  at 
 that  time.  Therefore,  a  comparison  of  the  1999  and  2000  penetration  rates  would  make  the  rate  of  increase  in 
 wireless  penetration  look  lower  than  it  actually  was. 


 22  See  Section  II.  A.  1.  b(  v),  Market  Entry,  infra,  for  a  detailed  discussion. 


 23  See  Appendix  C,  Table  4,  at  C-  5. 
 24  Id. 
 25  Id. 
 26  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). 


 27  See  Section  II.  A.  1.  c,  Continued  Rise  of  Digital,  infra,  for  a  detailed  discussion. 


 28  See  Section  II.  A.  1.  d,  Pricing  Data  and  Trends,  infra,  for  a  detailed  discussion  of  price  competition. 


 29  Id. 
 30  Id. 
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 likely  play  a  more  prominent  role  in  the  mobile  data  industry  as  it  evolves.  31  Many  analysts  expect  that  the 
 development  and  deployment  of  advanced  wireless  or  Third  Generation  (  3G)  services  32  will  increase  the 
 growth  of  mobile  data  services  over  the  next  several  years.  During  2000  and  early  2001,  several  U.  S. 
 mobile  telephone  carriers  announced  their  3G  rollout  plans.  At  least  six  carriers  expect  to  begin  deploying 
 network  technologies  during  late  2001  and  early  2002  that  will  allow  for  mobile  Internet  access  speeds  of 
 up  to  144  kbps.  33 


 31  See  Section  II.  B.  3,  Developing  Mobile  Data  Services,  infra. 
 32  3G  generally  refers  to  high-  speed  advanced  mobile  services  and  the  technologies  that  will  make  such 
 services  available.  3G  speeds  are  expected  to  reach  2  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.  2.  5G  refers  to  the 
 interim  technologies  that  carriers  will  use  while  migrating  from  their  current  2G  technologies  of  CDMA,  TDMA, 
 GSM,  and  iDEN  to  3G  technologies.  Some  members  of  the  wireless  industry  label  certain  technologies  as  3G, 
 while  others  label  the  same  technology  as  2.  5G.  Therefore,  it  is  difficult  to  place  the  next  generation  of  network 
 technologies  into  catergories,  but  the  2.  5G  and  3G  technologies  include  General  Packet  Radio  Service  (  GPRS), 
 Enhanced  Data  rates  for  GSM  Evolution  (  EDGE),  Wideband  CDMA  (  WCDMA),  cdma2000  1X,  cdma2000 
 1XEV,  and  cdma2000  3XRTT.  WCDMA  is  also  known  as  UMTS  (Universal  Mobile  Telecommunications 
 System).  The  general  migration  path  for  GSM  and  TDMA  carriers  is  to  implement  GPRS,  then  possibly  EDGE 
 and  eventually  WCDMA,  while  the  current  CDMA  carriers  will  likely  deploy  the  cdma2000  technologies.  See 
 Section  II.  B.  1.c,  3G  Developments,  infra. 


 33  See  Section  II.  B.  1.c,  3G  Developments,  infra.  These  carriers  include  the  six  nationwide  mobile  telephone 


 carriers  discussed  in  Section  II.  A.  1.  a(  iii),  Building  Nationwide  Networks,  infra. 
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 II.  THE  CMRS  INDUSTRY 
 A.  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  licensees  offer  mobile  telephone  services  that  are  essentially  interchangeable  from 
 the  perspective  of  most  consumers,  they  are  discussed  in  this  report  as  a  cohesive  industry  sector. 


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


 1.  Mobile  Telephone  Overview  and  Analysis 
 a.  Market  Structure 
 (i)  Spectrum  Allocation 
 Mobile  telephony  operators  primarily  use  three  types  of  spectrum  licenses  to  provide  service:  cellular, 
 broadband  PCS,  and  SMR. 


 Cellular  -  The  Commission  began  licensing  commercial  cellular  providers  in  1981  and  completed  licensing 
 the  majority  of  operators  by  1992.  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.  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). 


 Broadband  PCS  -  Broadband  PCS  is  similar  to  cellular  service,  except  that  broadband  PCS  systems 
 operate  in  different  spectrum  bands  and  are  designed  to  use  a  digital  format.  Broadband  PCS  licenses  have 
 been  assigned  through  auction,  beginning  in  1995.  36  The  most  recent  broadband  PCS  auction  was 


 34  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),  at  10151-  10152,  and  Fifth  Report,  at  17668. 


 35  As  codified  at  47  C.  F.  R.    22.900,  24.200,  90.601. 


 36  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,  Federal  Communications 
 Commission,  Dec.  14,  1994. 
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 Federal  Communications  Commission  FCC  01-  192 
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 completed  in  2001.  37  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).  38  Two  of  the  30  megahertz  blocks  (A  and  B  blocks)  are  assigned  on  the  basis  of  51  Major  Trading 
 Areas  (  MTAs).  39  One  of  the  30  megahertz  blocks  (C  block)  and  all  three  of  the  10  megahertz  blocks  are 
 assigned  on  the  basis  of  493  BTAs.  40 


 SMR  -  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.  41  The  Commission  has  since  licensed  additional 
 SMR  spectrum  through  auctions,  42  so  that  there  are  at  least  26.  5  megahertz  of  spectrum  available  for  SMR 
 services.  43  While  Commission  policy  permits  flexible  use  of  this  spectrum,  including  the  provision  of 


 37  See  Section  II.  A.  1.  a(  iv),  Auction  No.  35,  infra. 
 38  The  Commissions  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 
 local  area  networks  in  offices.  Such  systems  operate  with  very  low  power  and  have  a  limit  on  the  duration  of 
 transmissions. 


 39  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  McNallys  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  McNallys  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; 
 Mayagez/  Aguadilla-  Ponce,  Puerto  Rico;  and  the  U.  S.  Virgin  Islands. 


 40  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  Commissions  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  Commissions  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).  See  also  Section  II.  A.  1.a(  iv),  Auction  No.  35,  infra,  for  additional  recent  changes. 


 41  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). 


 42  The  Commission  has  had  four  auctions  for  SMR  licenses.  Federal  Communications  Commission, 


 Completed  Auctions  (visited  Apr.  4,  2001)  <http://  www.  fcc.  gov/  wtb/  auctions/  serv8.  html#  completed>. 
 43  Five  megahertz  in  the  900  MHz  band  (200  paired  channels  x  12.5  kHz/  channel).  See  47  C.  F.  R.  90.617, 


 Table  4B.  21.5  megahertz  in  the  800  MHz  band:  14  megahertz  in  the  800  SMR  Service  (280  paired  channels  x  25 
10
 Federal  Communications  Commission  FCC  01-  192 
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 paging,  dispatch,  mobile  voice,  mobile  data,  facsimile,  or  combinations  of  these  services,  44  the  primary  use 
 for  SMR  traditionally  has  been  dispatch  services.  45  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.  46  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  and  Southern  LINC  have  used  digital  technologies  to 
 increase  spectral  efficiency  and  become  more  significant  competitors  in  mobile  telephony,  while  also 
 providing  dispatch  functionality  as  part  of  their  service  offerings.  47  At  the  same  time,  traditional  dispatch 
 services  are  being  provided  increasingly  on  non-  SMR  spectrum  bands.  48  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.  49 


 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).  The 
 Commission  has  also  recently  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,  FCC  00-  403  (rel.  Nov.  20,  2000),  at    110-  111. 
 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. 


 44  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.  and  FCI  900,  Inc.,  Memorandum  Opinion  and 
 Order,  15  FCC  Rcd  790  (2000),  at    25. 


 45  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. 


 46  See  The  Strategis  Group,  THE  STATE  OF  THE  SMR  INDUSTRY:  NEXTEL  AND  DISPATCH  COMMUNICATIONS 


 (Sept.  2000),  at  57;  The  Strategis  Group,  U.  S.  DISPATCH  MARKETS  (Jan.  2000)  at  1.  See  also  Motorola  Order,  at   
 13. 


 47  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.  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. 


 48  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    18-  20  for  a  detailed  discussion. 


 49  Id.,  at    22. 
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 Federal  Communications  Commission  FCC  01-  192 
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 Spectrum  Cap  -  In  every  geographical  area,  the  Commission  has  authorized  at  least  eight  different  mobile 
 telephony  licensees  (two  cellular  and  six  broadband  PCS),  not  including  additional  digital  SMR  licensees.  50 
 Moreover,  under  Commission  rules,  broadband  PCS,  cellular,  and  auctioned  SMR  licensees  may 
 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.  51  Many  licensees  have  more  than  one 
 license  in  a  particular  market.  However,  under  the  Commissions  CMRS  spectrum  cap  (which  applies  to 
 180  MHz  of  spectrum),  no  entity  may  control  more  than  45  megahertz  of  cellular,  52  broadband  PCS,  and 
 SMR  53  spectrum  in  an  urban  market,  or  more  than  55  megahertz  in  a  rural  market.  54  Therefore,  the 
 spectrum  cap  ensures  that  there  are  at  least  four  different  licensees  in  every  market,  and  as  a  practical 
 matter,  there  are  generally  five  or  more  licensees  in  every  market. 


 (ii)  Convergence  of  Cellular  and  PCS 
 Cellular  and  PCS  networks  use  the  same  basic  design.  Both  use  a  series  of  low-  power  transmitters  to  serve 
 relatively  small  areas  (  cells),  and  both  employ  frequency  reuse  to  maximize  spectrum  efficiency.  55  In  the 
 past,  the  primary  difference  was  that  cellular  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.  56 


 50  Some  markets  may  have  fewer  licensees  because  certain  auction  winners  have  defaulted  on  payments  to 
 the  Commission,  because  some  licensees  returned  their  licenses,  or  because  some  licenses  went  unsold  in  auction. 
 51  47  CFR    24.714  (PCS);  47  CFR    22.948  (cellular);  47  CFR    22.948;  47  CFR    90.813,    90.911 


 (auctioned  SMR). 
 52  In  addition,  the  Commissions  rules  limit  an  entity  from  having  cross-  interests  in  cellular  licenses  on  both 


 blocks  within  a  geographic  area.  47  CFR    22.942. 
 53  No  more  than  10  megahertz  of  SMR  spectrum  is  attributable  to  an  entity  under  the  cap.  47  CFR   


 20.6(  b). 
 54  47  CFR    20.  6(  a).  The  Commission  is  currently  reviewing  whether  it  should  alter  its  spectrum  cap  rules. 


 2000  Biennial  Regulatory  Review  Spectrum  Aggregation  Limits  for  Commercial  Mobile  Radio  Services,  Notice  of 
 Proposed  Rulemaking,  WT  Docket  No.  01-  14  (rel.  Jan  23,  2001). 


 55  PCS  and  cellular  networks  are  both  cellular  systems,  since  both  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.  US  Unwired,  About  Cellular  (visited  Mar.  8,  2001) 
 <http://  www.  usunwired.  com/  wireless/  cellular/  cellular.  cfm>.  SMR  and  cellular/  broadband  PCS  convergence  is  not 
 discussed  here  because  no  mobile  telephony  operator  uses  cellular  or  broadband  PCS  spectrum  in  addition  to  SMR 
 spectrum. 


 56  Dan  Meyer,  Analog  Service  Not  Fading  Away,  RCR  WIRELESS  NEWS,  Jan  18,  2001,  at  18;  see  also 


 Verizon  Wireless,  Inc.,  SEC  Form  S-  1,  Aug.  24,  2000,  at  84.  See  Section  II.  B,  Mobile  Data,  infra. 
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 Federal  Communications  Commission  FCC  01-  192 
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 Four  of  the  largest  mobile  telephony  companies  -  AT&  T  Wireless  Group  (  AT&  T  Wireless),  Verizon 
 Wireless,  LLC  (  Verizon  Wireless),  57  Cingular  Wireless,  LLC  (  Cingular  Wireless)  58  and  ALLTEL 
 Corp.  (  ALLTEL)  -  hold  both  cellular  and  broadband  PCS  licenses,  and  these  carriers  have  deployed 
 digital  technology  extensively  throughout  their  cellular  networks.  59  Even  operators  with  only  cellular 
 licenses,  such  as  United  States  Cellular  Corp.  (  US  Cellular),  are  well  along  in  the  conversion  of  their 
 analog  networks  to  digital.  Several  manufacturers  produce  dual  and  tri-  mode  handsets  for  operators  with 
 both  analog  and  digital  networks,  allowing  customers  to  move  between  digital  and  analog  areas  with  ease.  60 
 More  than  62  percent  of  all  mobile  telephony  subscribers  use  digital  service  now,  and  from  a  customers 
 perspective  digital  service  in  the  cellular  band  is  virtually  identical  to  digital  service  in  the  PCS  band. 


 (iii)  Building  Nationwide  Networks 
 In  the  United  States,  there  are  six  nationwide  mobile  telephony  operators:  AT&  T  Wireless,  Sprint  PCS,  61 
 Verizon  Wireless,  VoiceStream  Wireless  Corp.  (  VoiceStream),  Cingular  Wireless,  and  Nextel.  In 
 comparison,  there  were  three  nationwide  mobile  telephony  operators  at  the  end  of  1999.  62  In  addition  to  the 
 nationwide  operators,  there  are  a  number  of  large  regional  players,  including  Western  Wireless  Corp. 
 (  Western  Wireless),  US  Cellular,  Dobson  Communications  Corp.  (  Dobson),  and  ALLTEL. 


 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.  63  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,  64  reducing  prices  to 


 57  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. 
 58  Cingular  Wireless  is  a  subsidiary  of  Cingular,  LLC  (  Cingular),  a  joint  venture  of  SBC 


 Communications,  Inc.  (  SBC)  and  BellSouth  Corporation  (  BellSouth).  See  Section  II.  A.  1.a(  iii)(  a), 
 Combinations,  Sales,  and  License  Swaps,  infra. 


 59  See  Section  II.  A.  1.  c,  Continued  Rise  of  Digital,  infra.  It  should  be  noted  that  companies  with  both  types 


 of  licenses  do  not  manage  their  business  along  spectrum  divisions.  See,  e.  g.,  AT&  T  Wireless  Group  Earnings 
 Commentary,  AT&  T  Wireless,  Jan.  29,  2001,  at  6,  available  at 
 <http://  www.  att.  com/  wirelessir/  pdf/  004q_  cmnt.  pdf>. 


 60  Operators  with  cellular  and  PCS  licenses  in  the  same  area  need  phones  that  can  operate  on  analog  cellular 


 networks  (800  MHz),  cellular  networks  converted  to  digital  (800  MHz),  and  digital  PCS  networks  (1900  MHz). 
 61  Sprint  PCS  is  a  wholly  owned  tracking  group  of  Sprint  Corp.  (  Sprint). 


 62  See  Fifth  Report,  at  17669.  When  an  operator  is  described  as  being  nationwide,  it  does  not  necessarily 
 mean  that  the  operators  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.  See  Colette  Fleming,  Mark  Kinarney, 
 and  Rohit  Sharma,  The  Urge  to  Merge    2000,  Morgan  Stanley  Dean  Witter,  May  22,  2000,  at  4-  5. 


 63  See  Fifth  Report,  at  17669,  but  see  Section  II.  A.  1.  a(  iii)(  a),  Combinations,  Sales,  and  License  Swaps, 


 infra. 
 64  For  a  discussion  of  DOR  plans,  see  Fifth  Report,  at  17675-  17676;  Fourth  Report,  at  10155-  10156. 
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 Federal  Communications  Commission  FCC  01-  192 
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 consumers.  65 
 (a)  Combinations,  Sales,  and  License  Swaps 
 Since  the  end  of  1999,  carriers  have  continued  to  build  nationwide  footprints  using  combinations, 
 acquisitions,  and  license  swaps.  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.  National  operators  have  also  sought  to  fills  in  gap  in  their 
 coverage.  67 


 Between  year  end  1999  and  the  publication  of  the  Fifth  Report  in  mid-  2000,  eight  of  the  top  25  mobile 
 telephone  operators  (based  on  year-  end  1999  subscribership)  had  merged  to  form  two  larger  carriers,  68  and 
 the  proposed  joint  venture  between  SBC  and  BellSouth  was  pending  before  the  Commission.  69  Since  the 
 writing  of  the  Fifth  Report,  that  joint  venture  has  been  completed,  and  a  number  of  other  combinations, 
 sales,  and  license  swaps  have  been  announced.  70  The  most  significant  are  discussed  below. 


 Combinations 
 Cingular  -  On  October  5,  2000,  SBC  and  BellSouth  launched  their  new  national  wireless  joint  venture 
 under  the  name  Cingular  Wireless.  71  At  the  time  of  its  closing,  the  merged  company  served  more  than  19 
 million  customers  and  had  licenses  covering  approximately  190  million  potential  customers,  or  POPs,  72 


 65  See  Section  II.  A.  1.  d(  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  CFR  1.948.  The  Commission  has  reviewed  thousands  of 
 wireless  transactions  in  addition  to  the  ones  discussed  below.  In  2000,  the  Commission  received  2,  510 
 applications  involving  either  the  assignment  of  licenses  or  the  transfer  of  control  of  entities  holding  licenses.  In 
 all,  these  applications  involved  32,047  wireless  licenses.  On  average,  the  Commission  received  210  such 
 applications  a  month,  and,  on  average,  the  Commission  acted  on  these  transactions  within  66  days  of  their 
 appearance  on  public  notice  as  accepted  for  filing  (or  within  50  days  of  receipt,  if  the  particular  application  was  not 
 required  to  be  placed  on  public  notice). 


 67  For  a  more  complete  discussion  of  the  motivations  for  this  phenomenon,  see  Fourth  Report,  at  10159- 


 10160. 
 68  The  wireless  assets  of  Bell  Atlantic  Corp.,  GTE  Corp.  (  GTE),  PrimeCo  Personal  Communications,  and 


 CommNet  Cellular,  Inc.,  along  with  the  U.  S.  wireless  assets  of  Vodafone,  became  part  of  Verizon  Wireless;  and 
 Omnipoint  Corp.  and  Aerial  Communications,  Inc.  became  part  of  VoiceStream.  See  Fifth  Report,  at  17669- 
 17670. 


 69  The  joint  venture  between  SBC  and  BellSouth  was  announced  in  April  2000.  BellSouth,  SBC  Create  2nd 


 Largest  Wireless  Company  With  $10.2  Billion  in  Revenues,  News  Release,  BellSouth,  Apr.  5,  2000. 
 70  See  Combinations  Section,  infra. 


 71  It's  Cingular.  New  Nationwide  Wireless  Service  Is  Born:  Joint  Venture  of  SBC  and  BellSouth  Becomes 
 Single  Source  for  Nationwide  Wireless  Voice,  Internet  and  Data  Services,  News  Release,  Cingular  Wireless,  Oct. 
 5,  2000. 


 72  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. 
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 in  38  states,  the  District  of  Columbia,  and  two  U.  S.  territories.  73  SBC  contributed  60  percent  of  the  assets 
 to  the  new  company,  while  BellSouth  contributed  40  percent  of  the  assets,  but  the  companies  are  sharing 
 control  equally.  74 


 VoiceStream/  Powertel/  Deutsche  Telekom  -  On  May  31,  2001,  Deutsche  Telekom  AG  (  Deutsche 
 Telekom)  completed  its  acquisition  of  VoiceStream  and  Powertel,  Inc.  (  Powertel).  75  This  merger 
 combines  the  two  largest  GSM  wireless  providers  in  the  United  States.  76  In  the  United  States,  the  merged 
 entity  holds  licenses  covering  over  272  million  POPs,  representing  97  percent  of  the  U.  S.  population.  77  As 
 of  the  year-  end  2000,  VoiceStream  and  Powertel  provided  service  to  a  total  of  4.8  million  U.  S.  wireless 
 customers.  78 


 Verizon  Wireless/  Price  Wireless  -  On  November  15,  2000,  Verizon  Wireless  announced  it  had  signed  an 
 agreement  to  acquire  Price  Communications  Wireless  (  Price  Wireless),  a  wholly  owned  subsidiary  of 
 Price  Communications,  Inc.,  for  approximately  $2  billion.  79  This  agreement  is  conditioned  on  the 
 completion  of  Verizon  Wirelesss  planned  initial  public  offering  (  IPO)  by  September  30,  2001.  Price 
 Wirelesss  network  covers  3.  4  million  POPs  in  16  markets,  and  the  company  serves  500,000  customers 
 throughout  Georgia,  Alabama,  South  Carolina,  and  Florida.  80  Price  Wirelesss  network  uses  TDMA, 
 which  Verizon  Wireless  plans  to  convert  to  CDMA  as  quickly  as  possible  after  the  closing. 


 Nextel/  Chadmoore  -  In  August  2000,  Nextel  agreed  to  acquire  Chadmoore,  a  dispatch  company  with 
 licenses  covering  180  small  to  medium-  sized  markets.  81  The  companies  expect  to  complete  the  merger  by 
 the  second  half  of  2001,  82  assuming  the  proposed  transfer  of  control  is  approved  by  the  Commission  and 
 consumated. 


 73  It's  Cingular.  New  Nationwide  Wireless  Service  Is  Born:  Joint  Venture  of  SBC  and  BellSouth  Becomes 
 Single  Source  for  Nationwide  Wireless  Voice,  Internet  and  Data  Services,  News  Release,  Cingular  Wireless,  Oct. 
 5,  2000. 


 74  Id.;  Application  of  SBC  Communications  Inc.  and  Bellsouth  Corporation  for  Consent  to  Transfer  of 


 Control  or  Assignment  of  Licenses  and  Authorizations,  Memorandum  Opinion  and  Order,  DA  00-  2223  (rel.  Sept. 
 29,  2000),  at    7. 


 75  See  Section  II.  A.  3.  a,  Foreign  Investment  in  U.  S.  Mobile  Operators,  infra,  for  a  discussion  of  the  Deutsche 


 Telekom/  VoiceStream  merger. 
 76  Powertel  held  wireless  licenses  in  areas  where  VoiceStream  did  not  market  its  wireless  services.  Powertel 


 to  be  Acquired:  VoiceStream  Coverage  to  Expand  to  More  Than  245  Million  Potential  U.  S.  Wireless  Customers, 
 News  Release,  VoiceStream,  Aug.  27,  2000. 


 77  VoiceStream  Wireless  Announces  2000  Financial  Results,  News  Release,  VoiceStream,  Feb.  14,  2001. 


 78  See  Appendix  C,  Table  3,  at  C-  4. 
 79  Verizon  Wireless  to  Purchase  Price  Communications  Wireless  for  $2.  06  Billion,  News  Release,  Verizon 
 Wireless,  Nov.  15,  2000. 
 80  According  to  Verizon  Wireless,  the  deal  will  significantly  enhance  the  footprint  and  customer  base  of 


 Verizon  Wireless  operations  in  the  Southeast.  Id. 
 81  Nextel  Communications,  Inc.,  SEC  Form  10-  Q,  Nov.  14,  2000,  at  13. 


 82  Id. 
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 License  Sales  and  Swaps 
 Verizon/  ALLTEL  Sale  -  On  February  20,  2001,  Verizon  Wireless  completed  its  acquisition  of  20  unbuilt 
 10  megahertz  PCS  licenses  in  six  states  from  ALLTEL.  83  These  new  licenses  will  increase  Verizon 
 Wirelesss  footprint  by  some  2  million  POPs  and  increase  its  spectrum  holdings  in  current  licensed  service 
 areas  totaling  about  9  million  POPs.  The  new  licenses  cover  markets  in  Georgia,  Missouri,  Tennessee, 
 Alabama,  and  Oklahoma.  Financial  details  of  the  agreement  were  not  disclosed. 


 Cingular/  VoiceStream  Swap  -  In  a  major  step  to  expand  their  market  coverage,  Cingular  and  VoiceStream 
 exchanged  broadband  PCS  licenses  covering  approximately  35  million  POPs.  84  Cingular  Wireless 
 acquired  10  megahertz  of  VoiceStreams  spectrum  in  the  New  York  MTA,  85  as  well  as  10  megahertz  of  its 
 spectrum  in  both  the  St.  Louis  and  Detroit  BTAs.  VoiceStream  received  10  megahertz  of  spectrum  in  the 
 Los  Angeles  and  San  Francisco  MTAs,  which  include  the  entire  states  of  California  and  Nevada.  The 
 swap  was  completed  in  May  2001.  86 


 AT&  T/  Sprint  Swap  -  On  November  3,  2000,  AT&  T  Wireless  and  Sprint  PCS  announced  an  agreement  to 
 exchange  licenses  for  certain  10  megahertz  blocks  of  PCS  spectrum  in  markets  around  the  country, 
 covering  approximately  18.  5  million  POPs.  87  Sprint  is  gaining  spectrum  in  Georgia,  North  Carolina,  New 
 Mexico,  Ohio,  Tennessee,  and  Texas,  while  AT&  T  Wireless  is  receiving  spectrum  in  California,  Florida, 
 Texas,  Utah,  and  Washington.  88  The  companies  are  also  swapping  spectrum  within  the  same  BTA 
 (Hartford,  Connecticut).  89 


 Nextel/  Mobex/  Arch  -  Nextel  is  in  the  process  of  acquiring  additional  SMR  spectrum  from  several 
 carriers.  90  Mobex,  another  SMR  service  provider,  is  in  the  process  of  transferring  its  284  800  MHz  and 


 83  Verizon  Wireless  Completes  Purchase  Of  20  PCS  Licenses  In  Six  States  From  ALLTEL,  News  Release, 
 Verizon  Wireless,  Feb.  20,  2001. 
 84  Cingular,  VoiceStream  to  Swap  Wireless  Spectrum  Covering  Over  35  Million  People,  News  Release, 


 VoiceStream  and  Cingular  Wireless,  Nov.  2,  2000. 
 85  The  New  York  MTA  covers  all  five  boroughs  of  New  York  City,  all  of  Long  Island,  as  well  as  parts  of 


 upstate  New  York,  northeast  Pennsylvania,  New  Jersey,  and  parts  of  Connecticut.  Through  this  transaction, 
 Cingular  Wireless  gains  access  to  an  additional  19  million  POPs  in  the  New  York  metropolitan  area.  Cingular, 
 VoiceStream  to  Swap  Wireless  Spectrum  Covering  Over  35  Million  People,  News  Release,  VoiceStream  and 
 Cingular  Wireless,  Nov.  2,  2000. 


 86  See  Wireless  Telecommunications  Bureau  Assignment  of  Authorization  and  Transfer  of  Control 


 Appplications  Action,  Public  Notice,  Report  No.  885  (rel.  June  13,  2001),  at  11-  12. 
 87  AT&  T  Wireless  To  Exchange  PCS  Spectrum  With  Sprint,  News  Release,  AT&  T,  Nov.  3,  2000. 


 88  See  AT&  T  Wireless  PCS,  LLC,  Application  for  Consent  to  Assignment  of  Licenses,  FCC  File  No. 
 0000439317  (filed  Apr.  26,  2001)  (Exhibit  1:  Explanation  of  Transaction  and  Public  Interest  Statement  ). 
 89  Id. 


 90  In  addition,  Motorola,  Inc.  (  Motorola)  received  consent  to  transfer  59  900  MHz  licenses  to  Nextel  in 
 April  2001.  Motorola  Order. 
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 900  MHz  licenses  to  Nextel.  91  In  January  2001,  Arch  Wireless,  Inc.  (  Arch)  agreed  to  sell  its  SMR 
 licenses  to  Nextel.  92  If  Nextel  completes  all  its  pending  acquisitions  (including  Chadmoore),  it  will  have 
 approximately  20  megahertz  of  spectrum  in  52  of  the  top  100  U.  S.  markets.  93 


 While  the  most  high-  profile  transactions  have  involved  nationwide  operators,  smaller  operators  have  also 
 made  acquisitions  to  increase  the  size  of  their  footprints.  Leap  Wireless  International,  Inc.  (  Leap),  for 
 example,  has  purchased  dozens  of  spectrum  licenses  from  other  licensees  since  1999.  94  And  on  November 
 13,  2000,  TeleCorp  PCS,  Inc.  (  TeleCorp)  completed  its  acquisition  of  fellow  AT&  T  affiliate,  Tritel,  Inc.  95 


 (b)  Affiliations 
 In  addition  to  extending  their  networks  through  combinations  or  license  acquisitions,  three  national 
 operators  have  extended  their  coverage  through  affiliations  with  smaller  carriers.  96  These  affiliations  create 
 a  family  of  operating  companies  with  much  closer  relationships  than  those  formed  by  traditional  roaming  97  agreements.  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 


 91  Wireless  Telecommunications  Bureau  Grants  Consent  for  Assignment  of  Licenses  from  Mobex  License 
 Company  to  Nextel  Communications,  Inc.,  Public  Notice,  DA  01-  493  (rel.  Feb  22,  2001)  (800  MHz  licenses); 
 Wireless  Telecommunications  Bureau  Grants  Consent  to  Assign  900  MHz  SMR  Licenses,  Public  Notice,  DA  01-515 
 (Feb.  27,  2001)  (900  MHz  licenses). 


 92  Nextel  to  Purchase  SMR  Spectrum  From  Arch  Wireless,  News  Release,  Nextel,  Jan.  24,  2001.  Arch  had 
 acquired  the  licenses  from  PageNet  when  it  bought  that  company  in  November  2000.  Arch  Wireless  Completes 
 Merger  with  PageNet,  News  Release,  Arch,  Nov.  20,  2000.  See  also  Arch  Wireless  and  Nextel  Communications, 
 Inc.  Seek  Consent  to  Assign  900  MHz  SMR  Licenses,  Public  Notice,  DA  01-  499  (rel.  Feb  26,  2001). 


 93  In  the  800  MHz  and  900  MHz  bands.  Nextel  Reports  Record  Year  2000  Financial  Results,  News  Release, 
 Nextel,  Feb.  16,  2001. 
 94  Leap  Wireless  International,  Inc.,  SEC  Form  10-  K,  Mar.  2,  2001,at  31-  32 


 95  TeleCorp  and  Tritel  Complete  Merger  Creating  Top  Ten  Wireless,  News  Release,  TeleCorp,  Nov.  13, 
 2000.  In  a  separate  transaction,  TeleCorp  and  AT&  T  Wireless  completed  an  exchange  of  wireless  properties  and 
 rights  to  acquire  additional  wireless  properties  in  a  move  to  improve  the  respective  service  areas  of  both 
 companies.  TeleCorp  received  licenses  covering  approximately  4  million  people  in  Wisconsin  and  Iowa.  In  return, 
 AT&  T  Wireless  received  TeleCorps  wireless  systems  in  New  England,  including  Worcester  and  Cape  Cod, 
 Massachusetts,  and  southern  New  Hampshire,  covering  a  population  base  of  approximately  1.  9  million  people.  As 
 a  result  of  the  completion  of  these  transactions,  TeleCorps  licensed  service  area  increased  by  a  net  amount  of 
 approximately  18  million  people.  Taken  as  a  whole,  TeleCorps  business  now  includes  PCS  licenses  covering 
 approximately  35  million  people.  Id. 


 96  In  a  change  from  the  Fifth  Report,  VoiceStream  is  no  longer  discussed  in  this  section  because  it  has 


 acquired  from  its  primary  affiliate,  Cook  Inlet,  the  overwhelming  majority  of  licenses  in  which  the  two  companies 
 shared  interests.  VoiceStream,  Cook  Inlet  Complete  License  Swap,  News  Release,  VoiceStream,  Dec.  12,  2000. 
 See  also,  Fifth  Report,  at  17687-  17688. 


 97  See  Section  II.  A.  1.  d(  ii),  Roaming,  infra,  for  a  definition  and  detailed  discussion  of  roaming. 
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 Federal  Communications  Commission  FCC  01-  192 
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 some  cases  under  the  larger  companies  brand  names,  in  selected  mid-  sized  and  smaller  markets.  98 
 AT&  T  -  The  AT&  T  family  consists  of  AT&  T  Wirelesss  cellular  and  PCS  properties,  as  well  as  the 
 ventures  it  has  with  four  companies:  TeleCorp,  Triton  PCS  Holdings,  Inc.  (  Triton  PCS),  Cincinnati  Bell 
 Wireless,  LLC  (  Cincinnati  Bell  Wireless),  99  and  Dobson.  AT&  T  Wireless  has  sold  portions  of  some  of 
 its  broadband  PCS  licenses  to  the  ventures  with  the  first  three  companies  in  return  for  a  minority  ownership 
 interest  in  the  ventures.  These  three  affiliates  are  currently  deploying  TDMA  technology  and  AT&  T 
 Wireless  service  under  the  brand  name  SunCom  in  certain  areas  of  the  country.  100  In  a  somewhat  different 
 arrangement,  AT&  T  Wireless  and  Dobson  own  equal  interests  in  a  joint  venture,  American  Cellular 
 Corporation,  which  provides  service  primarily  in  rural  areas  of  the  Midwestern  and  eastern  United  States.  101  AT&  T  Wireless  owns  approximately  12  percent  of  Dobson.  102 


 Sprint  PCS  -  The  Sprint  PCS  family  consists  of  Sprint  PCS  and  14  affiliates.  103  Each  of  the  affiliates  has 
 an  agreement  with  Sprint  PCS  to  use  the  latters  PCS  licenses  to  deploy  CDMA  technology  and  Sprint 
 PCS-  branded  service  in  specific  areas  of  the  country.  104  Some  of  the  affiliates  also  hold  their  own 
 broadband  PCS  licenses,  and  at  least  two  affiliates    US  Unwired,  Inc.  (  US  Unwired)  and  Via  Wireless, 


 98  For  example,  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.  Nextel,  Automatic  and  Manual  Roaming  Obligations  Pertaining  to  Commercial  Mobile  Radio 
 Services,  Comments,  WT  Docket  No.  00-  193,  at  note  20. 


 99  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. 


 100  Cincinnati  Bell  Wireless  services  are  sold  under  the  Cincinnati  Bell  Wireless  brand  name. 


 101  Dobson  Communications  Corp.,  SEC  Form  8-  K,  Mar.  9,  2000,  at  2.  On  May  30,  2000,  AT&  T  and 
 Dobson  entered  into  an  agreement  to  expand  the  operations  of  the  joint  venture  into  northeastern  Oklahoma  and 
 several  adjacent  counties  in  Kansas.  Under  this  agreement,  AT&  T  contributed  PCS  licenses  to  the  joint  venture. 
 Dobson  Communications  Corp.,  SEC  Form  10-  Q,  Nov.  14,  2000,  at  18. 


 102  DCC  PCS,  Inc.,  Auction  No.  35,  FCC  Form  601,  Exhibit  A  (submitted  Feb  21,  2001).  AT&  T  has  stated 


 that  it  is  evaluating  its  relationship  with  Dobson.  AT&  T  Will  Continue  to  Evaluate  Dobson  Stake,  Yahoo!  News, 
 Feb.  20,  2001  <http://  biz.  yahoo.  com/  rf/  010220/  n20434866.html>. 


 103  Margo  McCall,  Market  Madness  Hinders  Wireless  Consolidation,  WIRELESS  WEEK,  Apr.  9,  2001,  at  15. 


 Two  Sprint  PCS  affiliates  -  Bright  Personal  Communications  Services,  Inc.  and  Horizon  Personal 
 Communications,  Inc.    merged  in  June  2000.  Bright  PCS  and  Horizon  PCS  Sign  Agreement  to  Form  Largest 
 Sprint  PCS  Network  Partner,  News  Release,  Telephone  Service  Company,  June  16,  2000.  Three  other  Sprint  PCS 
 affiliates,  Washington  Oregon  Wireless,  Roberts  Wireless  Communications,  and  Southwest  PCS  Holdings,  Inc. 
 merged  into  a  fourth  affiliate,  Alamosa  Holdings,  Inc.  (  Alamosa).  Alamosa  PCS  Becomes  Largest  Sprint  PCS 
 Network  Partner  With  Completion  of  The  Roberts  Wireless  and  Washington  Oregon  Wireless  Mergers,  News 
 Release,  Alamosa,  Feb.  14,  2001;  Alamosa  Closes  Third  Network  Partner  Transaction,  News  Release,  Alamosa, 
 Apr.  2,  2001.  See  also  note  105. 


 104  See,  e.  g.,  US  Unwired  Inc.,  SEC  Form  4249(  B)(  1),  May  17,  2000,  at  7. 
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 LLC  (  Via)  105    are  using  a  combination  of  their  own  spectrum  licenses  and  Sprints  to  deploy  service. 
 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  has  sold  some  of  its  SMR  licenses  to  Nextel 
 Partners  in  return  for  a  minority  ownership  interest  in  the  company.  106  Nextel  Partners  is  building  out  an 
 iDEN  network,  and  Nextel  is  providing  many  of  the  support  services.  107 


 (iv)  Auction  No.  35 
 On  January  26,  2001,  the  Commissions  most  recent  auction  of  C  and  F  block  broadband  PCS  licenses, 
 Auction  No.  35,  closed.  The  Commission  offered  a  total  of  422  C  and  F  block  broadband  PCS  licenses 
 covering  195  markets,  and  all  of  the  licenses  were  sold.  108  Many  licenses  in  the  auction  were  available 
 because  parties  that  had  won  licenses  for  the  same  spectrum  had  defaulted  on  their  installment  or  other 
 payments  to  the  Commission,  while  others  were  available  because  licenses  had  been  unsold  in  previous 
 auctions.  109  Net  high  bids  totaled  $16.9  billion.  110  The  Auction  No.  35  licenses  produced  significantly 
 more  revenue  than  many  analysts  expected,  111  and  much  more  revenue  than  the  $5.  2  billion  raised  in  earlier 


 105  Via  is  being  bought  by  another  Sprint  PCS  affiliate,  UbiquiTel,  Inc.  (  UbiquiTel).  UbiquiTel  to  Acquire 
 VIA  Wireless,  News  Release,  UbiquiTel,  Feb.  23,  2001.  In  March  2000,  UbiquiTel  signed  an  agreement  with 
 VoiceStream  to  sell  Vias  California  properties  to  VoiceStream  after  UbiquiTel  completes  the  acquisition  of  Via. 
 UbiquiTel  to  Sell  Spectrum,  News  Release,  UbiquiTel,  Mar.  6,  2001. 


 106  See  note  98  and  Nextel  Partners,  Inc.,  SEC  Form  S-  4/  A,  Nov.  9,  2000,  at  1.  As  of  Sept.  30,  2000,  Nextel 


 owned  32.4  percent  of  Nextel  Partners.  Nextel  Partners,  SEC  Form  S-  4/  A,  Nov.  9,  2000,  at  1. 
 107  Nextel  Partners,  Inc.,  SEC  Form  10-  Q,  Nov.  15,  1999,  at  9. 


 108  Federal  Communications  Commission,  Auction  #35:  C  &  F  Block  Auction    Charts,  Results  for  All 
 Markets  (visited  Apr.  2,  2001)  <http://  www.  fcc.  gov/  wtb/  auctions/  c_  f_  blk/  35market.  xls>. 
 109  C  And  F  Block  Broadband  PCS  Spectrum  Auction  Scheduled  For  November  29,  2000,  Rescheduled  For 


 December  12,  2000,  Public  Notice,  Sept.  6,  2000.  Potential  bidders  for  Auction  No.  35  and  other  interested  parties 
 were  notified  of  the  possible  pendency  of  various  proceedings  that  might  have  related  to  the  licenses  available  in 
 Auction  No.  35,  including  proceedings  initiated  by  parties  claiming  to  have  continuing  interests  in  Auction  No.  35 
 licenses,  despite  the  failure  of  those  parties  to  meet  payment  obligations.  Id.;  C  and  F  Block  Broadband  PCS 
 Spectrum  Auction  Scheduled  for  December  12,  2000,  Public  Notice,  Oct.  12,  2000.  See  also  Public  Notice  DA  00-49 
 Auction  of  C  and  F  Block  Broadband  PCS  Licenses  NextWave  Personal  Communications,  Inc.  and  NextWave 
 Power  Partners  Inc.  Petition  for  Reconsideration;  In  re  Settlement  Request  Pursuant  to  DA  99-  745  For  Various 
 Broadband  PCS  C  block  Licenses,  Order  on  Reconsideration,  15  FCC  Rcd  17,500  (2000),  appeal  docketed  sub 
 nom.,  NextWave  Personal  Communications,  Inc.  v.  FCC,  Nos.  00-  1402,  00-  1403  (D.  C.  Cir.  Sept.  15,  2000). 
 Potential  bidders  were  cautioned  that  they  were  solely  responsible  for  identifying  risks  associated  with  such 
 pending  proceedings  and  for  investigating  and  evaluating  the  degree  to  which  such  matters  might  affect  their 
 ability  to  bid  on  or  otherwise  acquire  licenses  in  Auction  No.  35.  C  and  F  Block  Broadband  PCS  Spectrum 
 Auction  Scheduled  For  November  29,  2000,  Rescheduled  For  December  12,  2000,  Public  Notice,  Sept.  6,  2000;  C 
 and  F  Block  Broadband  PCS  Spectrum  Auction  Scheduled  for  December  12,  2000,  Public  Notice,  Oct.  12,  2000. 


 110  Federal  Communications  Commission,  C  and  F  Block  Broadband  PCS  License  Auction  Fact  Sheet 


 Auction  No.  35  (visited  Apr.  2,  2001)  <  http://  www.  fcc.  gov/  wtb/  auctions/  c_  f_  blk1.  html>. 
 111  While  a  number  of  analysts  had  predicted  prices  of  $10  billion  or  more  for  these  licenses,  few  had 


 predicted  numbers  quite  so  high.  Lehman  Brothers  had  estimated  $11  billion,  and  Raymond  James  &  Associates 
 had  predicted  $8  to  $10  billion.  John  M.  Bensche  and  Courtney  B.  Kelleher,  Wireless  Services  Industry  Update:  C 
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 Federal  Communications  Commission  FCC  01-  192 
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 auctions  of  licenses  for  the  same  spectrum.  112 
 Auction  No.  35  differed  in  significant  ways  from  the  earlier  C  and  F  block  auctions.  Participation  in 
 earlier  auctions  had  been  limited  solely  to  entrepreneurs  (applicants,  including  attributable  investors  and 
 affiliates,  with  gross  revenue  of  less  than  $125  million  in  each  of  the  preceding  two  years  and  less  than 
 $500  million  in  total  assets).  113  Shortly  before  Auction  No.  35,  that  restriction  was  partially  lifted,  114 
 allowing  non-  entrepreneurs  to  bid  on  252  of  the  available  422  licenses.  115 


 Winning  bids  were  highest  for  densely  populated,  urban  BTAs.  The  New  York  BTA  alone,  for  example, 
 raised  $5.  6  billion,  33  percent  of  the  total  auction  receipts,  for  three  10  megahertz  licenses.  116  The  top  ten 
 markets  (by  population)  accounted  for  $10.1  billion,  or  60  percent  of  the  total.  117  Ten  bidders  total  net 
 high  bids  accounted  for  the  lions  share  of  the  auction  receipts  (98.  7  percent).  118 


 The  large  sum  of  money  committed  in  Auction  35  surprised  many  in  the  investment  community.  As  one 
 analyst  commented  in  reference  to  Verizon  Wirelesss  $8.  8  billion  in  bids,  What  Do  They  Know  We 
 Dont  Know?  119  More  understated,  another  analyst  commented  that  the  auction  prices  paid  were  quite 


 and  F  Block  Re-  auction  Concludes,  Nets  $16.9B,  Equity  Research,  Lehman  Brothers,  Jan.  29,  2001,  at  8;  Ric 
 Prentiss,  et  al.,  Super  Auction  XXXV  Is  Over,  Equity  Research,  Raymond  James  &  Associates,  Jan.  30,  2001,  at  1. 
 Investment  bank  ING  Barings  did  suggest  a  high-  end  of  $18.7  billion,  citing  the  prices  paid  in  the  UK  and 
 German  3G  auctions  from  2000  as  indicative  of  spectrum  value.  Frank  Marsala  and  Dave  B.  Rao,  Bidders 
 Approved  in  1.  9  GHz  Auction,  Wireless  Telecommunications,  ING  Barings,  Dec.  5,  2000,  at  3.  However,  ING 
 Barings  said  it  did  not  expect  to  see  the  high-  end.  Id  at  4. 


 112  Federal  Communications  Commission,  General  Auction  Data:  PCS  Blocks  A-  F  Aggregation  (visited  Apr. 


 2,  2001)  <http://  www.  fcc.  gov/  wtb/  auctions/  summary/  abcdef2.xls>.  The  file  was  last  revised  June  14,  1999,  and 
 includes  results  from  Auction  No.  22. 


 113  Amendment  of  the  Commissions  Rules  Regarding  Installment  Payment  Financing  for  Personal 


 Communications  Services  (PCS)  Licensees,  Sixth  Report  And  Order  And  Order  On  Reconsideration,  15  FCC  Rcd 
 16266,  16282  (2000)  (  Auction  35  Order). 


 114  Id.,  at  16275-  82. 


 115  Federal  Communications  Commission,  Auction  #35:  C  &  F  Block  Auction    Charts,  Results  for  All 
 Markets  (visited  Apr.  2,  2001)  <http://  www.  fcc.  gov/  wtb/  auctions/  c_  f_  blk/  35market.  xls>. 
 116  Id. 


 117  Id. 
 118  The  top  10  bidders  were  Cellco  Partnership,  d/  b/  a  Verizon  Wireless  (  Verizon  Wireless);  Alaska  Native 
 Wireless,  L.  L.  C.  (  Alaska  Native);  Salmon  PCS,  LLC  (  Salmon);  DCC  PCS,  Inc.  (  DCC  PCS);  Cook  Inlet/  VS 
 GSM  V  PCS,  LLC  (  Cook  Inlet/  VS  GSM);  VoiceStream  PCS  BTA  I  License  Corporation  (  VoiceStream);  Leap 
 Wireless  International,  Inc.;  Black  Crow  Wireless,  L.  P.  (  Black  Crow);  SVC  BidCo,  L.  P.  (  SVC  BidCo);  and 
 Lafayette  Communications  Company  L.  L.  C.  (  Lafayette).  See  Appendix  B,  Table  4,  at  B-  6. 


 119  John  M.  Bensche  and  Courtney  B.  Kelleher,  Wireless  Services  Industry  Update:  C  and  F  Block  Re-auction 


 Concludes,  Nets  $16.9B,  Equity  Research,  Lehman  Brothers,  Jan.  29,  2001,  at  2.  Peter  Friedland  of  W.  R. 
 Hambrecht  &  Co.  said,  If  someone  told  me  before  the  auction  that  Verizon  was  going  to  bid  half  of  the  total  bids 
 in  the  auction,  I  would  have  found  that  hard  to  believe.  Dan  Meyer,  Re-  auction  Brings  in  Record  $17B,  RCR 
 WIRELESS  NEWS,  at  61-  62. 
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 high.  120  While  obviously  only  the  bidders  knew  their  auction  strategies,  analysts  perceived  some  common 
 goals,  including  adding  capacity,  filling-  in  footprint  holes,  and  expanding  regional  clusters.  121  One  analyst 
 believed  that  the  auction  prices  reflected  how  larger  operators  value  a  true  national  footprint  as  well  as  the 
 additional  services  that  can  be  used  with  the  new  spectrum.  122 


 b.  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,  demonstrate  the  increased  demand  for 
 and  reliance  placed  on  mobile  services.  In  addition,  continued  downward  price  trends,  123  churn,  and 
 continued  expansion  of  mobile  networks  into  new  and  existing  markets  demonstrate  a  high  level  of 
 competition  for  mobile  telephony  customers. 


 (i)  Subscriber  Growth 
 In  2000,  the  mobile  telephone  sector  experienced  another  record  year.  As  of  December  2000,  the  industry 
 estimates  that  the  sector  had  over  109.5  million  subscribers,  124  which  translates  into  a  nationwide 
 penetration  rate  of  roughly  39  percent.  125  This  figure  also  represents  a  28  percent  increase  over  the  86.0 
 million  subscribers  reported  for  December  1999.  Also,  the  absolute  increase  of  23.5  million  subscribers 
 represents  the  largest  12-  month  jump  in  subscribership  in  the  history  of  the  sector,  surpassing  1999s 
 previous  record  of  16.  9  million  additional  subscribers.  In  addition  to  the  overall  penetration  rate  of  39 
 percent,  a  recent  study  found  that  46  percent  of  households  with  incomes  of  at  least  $25,000  have  wireless 


 120  Ric  Prentiss,  et  al.,  Super  Auction  XXXV  is  Over,  Equity  Research,  Raymond  James  &  Associates,  Jan.  30, 
 2001,  at  1. 
 121  See,  e.  g.,  Ric  Prentiss,  et  al.,  Super  Auction  XXXV  is  Over,  Equity  Research,  Raymond  James  & 


 Associates,  Jan.  30,  2001,  at  2;  and  John  M.  Bensche  and  Courtney  B.  Kelleher,  U.  S.  Spectrum  Auciton  Guide, 
 Equity  Research,  Lehman  Brothers,  Feb.  14,  2001,  at  1. 


 122  Dan  Meyer,  Re-  auction  Brings  in  Record  $17B,  RCR  WIRELESS  NEWS,  at  62  (citing  Larry  Swasey  of 


 Allied  Business  Intelligence,  Inc.). 
 123  See  II.  A.  1.  d,  Pricing  Data  and  Trends,  infra. 


 124  See  Appendix  C,  Table  2,  at  C-  2.  Since  the  Commissions  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  are  now  required  to  report  the  number  of  their  subscribers  in  those  states  twice  a  year  to  the  Commission 
 (as  the  information  is  filed  on  FCC  Form  477,  we  will  refer  hereinafter  to  the  results  gathered  through  the  program 
 as  FCC  Form  477).  In  their  most  recent  filings,  operators  reported  that,  as  of  December  31,  2000,  they  served 
 101.2  million  subscribers.  See  Appendix  C,  Table  2,  at  C-  3.  That  estimate  differs  by  approximately  8  percent 
 from  Cellular  Telecommunications  and  Internet  Associations  (  CTIA)  December  31,  2000  estimate  of  109.5 
 million.  To  maintain  consistency  with  previous  reports,  this  report  uses  CTIAs  estimate.  The  Commission  does 
 not  at  this  time  determine  which  is  the  better  estimate.  However,  the  Commission  does  recognize  that  its  reporting 
 rules  result  in  some  level  of  undercount  of  total  industry  subscribers  since  it  does  not  count  at  all  subscribers  served 
 by  mobile  telephony  providers  in  states  where  the  provider  has  less  than  10,000  customers.  See  Local  Competition 
 and  Broadband  Reporting,  Report  and  Order,  15  FCC  7717,  7743  (2000). 


 125  DCC  PCS,  Inc.,  Auction  No.  35,  FCC  Form  601,  Exhibit  A  (submitted  Feb  21,  2001). 
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 Federal  Communications  Commission  FCC  01-  192 
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 service,  up  from  35  percent  in  1998.  126 
 (ii)  Minutes-  of-  Use 
 While  estimates  of  average  minutes-  of-  use  per  subscriber  per  month  (  MOUs)  vary,  all  show  an  increase 
 between  1999  and  2000.  Increasing  MOUs  most  likely  are  a  result  of  the  decreasing  prices  and  the  wider 
 acceptance  of  and  reliance  upon  wireless  service.  127  Some  analysts  speculate  that  higher  usage  also  reflects 
 how  carriers  are  using  minutes  as  a  promotional  device  to  entice  and  retain  customers.  Giving  customers 
 more  minutes  not  only  makes  them  feel  that  they  are  getting  more  for  their  money,  128  but  makes  them 
 increasingly  dependent  on  their  cell  phones  and  on  particular  companies.  129 


 According  to  the  CTIA  mobile  telephone  survey,  MOUs  were  255  between  July  and  December  2000,  an 
 increase  of  38  percent  from  185  MOUs  during  the  same  period  in  1999.  130  Other  analysts,  using  different 
 methodologies,  also  report  higher  MOUs  in  2000.  Paul  Kagan  and  Associates  estimated  MOUs  of  335  in 
 mid-  2000,  up  from  261  in  mid-  1999.  131  J.  D.  Powers  &  Associates  estimated  320  MOUs,  an  increase  of  32 
 percent  from  242  a  year  earlier,  and  a  61  percent  increase  from  1998.  132  Taken  together,  these  average  303 
 MOUs  in  2000,  a  32  percent  increase  from  an  average  of  229  MOUs  in  1999.  Using  a  somewhat  different 
 metric,  International  Data  Corporation  (  IDC)  found  that  U.  S.  household  wireless  usage  (which  can 
 include  multiple  wireless  units  within  a  particular  household)  was  247  MOUs  in  2000,  compared  with  155 


 126  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.  An  additional  8  percent  of  households 
 indicate  that  they  plan  to  subscribe  to  wireless  services  within  the  next  year.  Id. 


 127  Michael  Rollins,  et  al.,  Wireless  by  the  Minute,  Equity  Research,  Salomon  Smith  Barney,  Jan.  8,  2001,  at 


 5. 
 128  According  to  Scott  Relf,  senior  vice  president  of  Sprint  PCS,  Generally  speaking,  most  plans  have  more 


 than  enough  minutes  and  consumers  can't  use  them  all.  But  the  consumer  feels  theyre  getting  more  of  a  tangible 
 value  when  they  get  more  of  them.  Caroline  E.  Mayer,  Griping  About  Cellular  Bills:  Differences  From  'Regular' 
 Phones  Take  New  Users  by  Surprise,  WASHINTON  POST,  Feb.  28,  2001,  at  G17. 


 129  [  Companies]  want  to  get  people  to  be  using  their  wireless  more  than  their  home  phone  and  if  you  give 


 people  more  minutes,  they  will  give  out  their  cell  phone  numbers  much  more,  according  to  Alan  Brune,  vice 
 president  of  marketing  of  Telephia,  a  San  Francisco  marketing  firm  specializing  in  wireless  data.  And  if  they 
 give  out  their  phone  numbers,  theyll  be  reluctant  to  switch  to  another  firm  because  right  now  they  cant  transfer 
 their  phone  number  with  them.  Caroline  E.  Mayer,  Griping  About  Cellular  Bills:  Differences  From  'Regular' 
 Phones  Take  New  Users  by  Surprise,  WASHINTON  POST,  Feb.  28,  2001,  at  G17. 


 130  Peggy  Albright,  CTIA  Survey  Reflects  Industry  Strength,  WIRELESS  WEEK,  Apr.  30,  2001,  at  3  (citing 


 CTIA).  CTIA  aggregated  all  of  the  carriers  MOUs  from  July  1  through  December  31,  2000,  then  divided  by  the 
 average  number  of  subscribers,  and  then  divided  by  six.  Telephone  conversation  with  Pramesh  Jobanputra,  CTIA, 
 Apr.  30,  2001. 


 131  Paul  Kagan  Associates,  Inc.,  Minutes  Up  By  28%  in  Quarter;  Acquisition  Costs  Continue  Decline, 
 WIRELESS  MARKET  STATS,  Aug.  14,  2000,  at  6. 
 132  Newer  Wireless  Telephony  Entrants  Make  Dramatic  Impact  in  the  Wireless  Marketplace,  News  Release, 


 J.  D.  Power  and  Associates,  Sept.  23,  1999;  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. 
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 Federal  Communications  Commission  FCC  01-  192 
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 MOUs  in  1999  and  89  MOUs  in  1998.  133 
 (iii)  Average  Revenue  Per  Unit 
 Increased  MOUs  may  counteract  any  negative  effect  of  falling  prices  on  the  average  monthly  revenue  per 
 subscriber  (often  referred  to  as  average  revenue  per  unit,  or  ARPU).  For  the  mobile  telephone  sector, 
 ARPU  has  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.  134  However,  since  1999,  ARPU  has 
 begun  increasing,  first  to  $41.24  in  December  1999,  then  to  $45.27  in  December  2000,  a  15  percent 
 increase  over  the  last  two  years.  As  previously  discussed  in  the  Fifth  Report,  analysts  attribute  this  rise  to 
 customers  using  their  phones  more  often.  135 


 (iv)  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  average  percent  churn  per  month.  For  example,  an  operator 
 might  report  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  quarters  three  months.  At  this  rate,  the  operator 
 would  lose  24  percent  of  its  customers  in  a  single  year.  136  Given  that  churn  provides  an  approximate 
 measure  of  the  frequency  with  which  subscribers  switch  operators,  137  it  is  often  used  as  an  indicator  of 
 increasing  competition.  Most  carriers  report  churn  rates  between  1.5  percent  and  3  percent  per  month.  138 


 According  to  one  recent  survey,  almost  one  in  five  wireless  subscribers  have  switched  carriers  in  the  past 
 year.  139  Sixteen  percent  of  those  who  switched  said  that  their  primary  reason  for  doing  so  was 
 dissatisfaction  with  their  current  pricing  plan.  140  Twelve  percent  dropped  their  current  service  in  search  of 


 133  Mobile  Phone  Users  Use  Significantly  More  Minutes  in  2000,  News  Release,  IDC,  May  9,  2000. 
 134  See  Appendix  C,  Table  1,  at  C-  2. 


 135  Michael  Rollins,  et  al.,  Wireless  by  the  Minute,  Equity  Research,  Salomon  Smith  Barney,  Jan.  8,  2001,  at 
 4;  Caroline  E.  Mayer,  Griping  About  Cellular  Bills:  Differences  From  'Regular'  Phones  Take  New  Users  by 
 Surprise,  WASHINTON  POST,  Feb.  28,  2001,  at  G17  (citing  Travis  Larson  of  CTIA);  Fifth  Report,  at  17682. 


 136  This  assumes  that  each  churned  customer  is  a  unique  individual  and  that  the  same  customers  do  not  churn 


 multiple  times. 
 137  Some  subscribers  do  not  sign  on  with  another  carriers  once  they  leave  their  current  one.  See  note  139, 


 infra. 
 138  See,  e.  g.,  Michael  Rollins,  et  al.,  Wireless  by  the  Minute,  Equity  Research,  Salomon  Smith  Barney,  Jan.  8, 


 2001,  at  27  (Figure  27:  Subscribers). 
 139  Wireless  Phone  User  Habits  Indicate  That  Switching  Providers  Is  A  Significant  Industry  Concern,  News 


 Release,  Telephia,  Jan.  16,  2001.  In  addition  to  the  20  percent  of  subscribers  who  switched  carriers  in  the  past 
 year,  approximately  8  to  10  percent  of  wireless  subscribers  temporarily  suspended,  or  in  some  cases  disconnected, 
 their  service.  Id. 


 140  Id. 
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 Federal  Communications  Commission  FCC  01-  192 
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 better  network  quality,  and  10  percent  left  in  order  to  take  advantage  of  a  competitors  promotion.  141  The 
 survey  also  found  that  almost  half  (44  percent)  of  all  wireless  users  have  no  strong  commitment  to  stay 
 with  their  current  carrier.  142  In  addition,  according  to  another  survey  released  in  May  2000,  only  60 
 percent  of  subscribers  had  a  contract,  143  down  from  70  percent  a  year  earlier.  144 


 (v)  Market  Entry 
 To  track  the  level  of  competition  in  the  mobile  telephony  market,  the  Commission  has  compiled  a  list  of 
 counties  with  some  level  of  coverage  by  mobile  telephone  providers.  145  This  analysis  is  based  on  publicly 
 available  sources  of  information  released  by  the  operators  such  as  news  releases,  filings  with  the  Securities 
 and  Exchange  Commission  (  SEC),  and  coverage  maps  available  on  operators  Internet  sites.  146 


 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  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  POPs  and  square  miles  figures  in  this  analysis  include  all 
 of  the  POPs  and  all  of  the  square  miles  in  a  county  considered  to  have  coverage.  147  Therefore,  this  analysis 
 overstates  the  total  coverage  in  terms  of  both  geographic  areas  and  populations  covered. 


 To  date,  259  million  people,  or  almost  91  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 


 141  Id.  Other  common  reasons  for  switching  included  calling  coverage,  customer  service,  additional  product 
 features,  and  an  employer  switching  providers.  Id. 
 142  Id. 


 143  For  purposes  of  this  report,  a  contract  is  for  a  specified  period  of  time,  as  opposed  to  a  month-  to-  month 
 agreement. 
 144  Mobile  Phone  Users  Use  Significantly  More  Minutes  in  2000,  News  Release,  IDC,  May  9,  2000. 


 145  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. 


 146  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  operators  network  must  serve  an 
 area  containing  at  least  one-  third  of  the  license  areas  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  areas 
 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. 


 147  All  population  figures  are  based  on  the  Bureau  of  the  Censuss  2000  county  population. 
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 they  live.  148  However,  these  counties  make  up  only  40  percent  of  the  total  land  area  of  the  United  States, 
 reflecting  the  nations  uneven  population  distribution.  149  On  the  other  hand,  the  land  area  of  these  counties, 
 1.  4  million  square  miles,  is  roughly  equal  to  the  combined  land  area  of  the  15  members  of  the  European 
 Union.  150  In  addition,  over  214  million  people,  or  75  percent  of  the  U.  S.  population,  live  in  areas  with  five 
 or  more  mobile  telephone  operators  competing  to  offer  service.  151 


 While  growth  in  the  percentage  of  the  population  covered  by  three  or  more  providers  has  been  small  in  the 
 past  year,  152  the  percentage  growth  of  the  population  covered  by  six  or  more  providers  has  been  significant. 
 Over  133  million  people,  or  47  percent  of  the  U.  S.  population,  live  in  areas  with  six  or  more  mobile 
 telephone  operators  competing  to  offer  service,  an  increase  of  35  percent  from  1999.  153  And  34  million 
 people,  or  about  12  percent  of  the  population,  can  now  choose  from  among  seven  or  more  different  mobile 
 telephone  operators,  an  increase  of  170  percent  from  1999.  154 


 c.  Continued  Rise  of  Digital 
 The  rise  of  digital  technology  in  the  mobile  telephone  sector  documented  in  the  last  two  reports  continues.  155 
 During  2000,  the  number  of  customers  subscribing  to  digital  services  jumped  55  percent  from 
 approximately  44.  3  million  to  67.  7  million.  156  Digital  subscribers  now  make  up  62  percent  of  all  wireless 
 subscribers,  up  from  51  percent  last  year,  and  30  percent  at  the  end  of  1998.  The  four  primary  competing 
 digital  technologies  experienced  growth  in  subscribership  ranging  from  44  to  72  percent.  In  addition, 
 almost  all  new  mobile  phones  sales  are  digital.  157 


 Even  as  new  subscribers  are  overwhelmingly  signing  up  for  digital  service,  158  operators  continue  to  move 
 148  See  Appendix  C,  Table  4,  at  C-  5. 


 149  Id. 
 150  See  Fifth  Report,  at  17677. 
 151  Id. 
 152  Only  3  percent,  due  to  its  previous  high  level  of  87.8  percent.  See  Fifth  Report,  at  17747. 
 153  See  Appendix  C,  Table  4,  at  C-  5. 
 154  Id. 
 155  See  Fourth  Report,  at  10154,  and  Fifth  Report,  at  17672-  17673. 
 156  See  Appendix  C,  Table  6,  at  C-  6.  The  number  of  analog  subscribers  remained  approximately  the  same  as 
 1999,  slightly  less  than  42  million. 
 157  See,  e.  g.,  Leif  Soderberg,  Sr.  VP  &  GM  Strategy  Business  Development  and  Industry  Relations  PCS, 
 Motorola,  Inc.,  Presentation,  UBS  Warburg  Fifth  Global  Telecom  Conference,  Nov.  11,  2000  (handset  forecast  for 
 2000).  In  2000,  Motorola  announced  that  it  would  discontinue  making  analog  handsets.  Motorola,  First  Quarter 
 Earnings  Release  Conference  Call,  Apr.  11,  2001,  available  at  <  http://  www.  corporate-ir. 
 net/  ireye/  ir_  site.  zhtml?  ticker=  MOT&  script=  1200>. 


 158  For  example,  in  the  Washington/  Baltimore  region,  90  percent  of  Verizon  Wirelesss  new  customers  are 


 digital.  Rob  Pegoraro,  The  Decline  (But  Not  Fall)  Of  Analog  Cellular,  THE  WASHINGTON  POST,  Sept.  29,  2000,  at 
 E15  (citing  a  Verizon  spokeswoman). 
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 their  existing  subscriber  base  from  analog  to  digital  services.  159  At  the  end  of  2000,  for  example,  90.1 
 percent  of  AT&  T  Wirelesss  nearly  15.  2  million  consolidated  subscribers  used  digital  service,  up  from 
 79.2  percent  a  year  earlier.  160  More  than  half  of  Verizon  Wirelesss  customers  now  subscribe  to  its  digital 
 services,  and  those  customers  generate  more  than  80  percent  of  the  companys  busy-  hour  usage.  161 
 Cingular  Wireless  states  that  85  percent  of  its  customers  subscribe  to  digital  service.  162 


 Operators  also  continued  to  expand  the  footprints  of  their  chosen  digital  technology  in  2000.  This  drive 
 stems  from  operators  with  analog  networks,  who  need  to  improve  capacity,  increase  their  advanced  service 
 offerings,  and  provide  compatibility  for  digital-  based  roaming  partners,  as  well  as  from  new,  all-  digital 
 network  operators  who  need  to  expand  their  footprints  to  increase  their  competitiveness.  163 


 Four  major  mobile  telephone  operators  -  AT&  T  Wireless,  Verizon  Wireless,  Cingular  Wireless,  and 
 ALLTEL  -  are  both  cellular  and  broadband  PCS  licensees,  and  these  carriers  have  deployed  digital 
 technology  extensively  throughout  their  networks.  Ninety-  nine  percent  of  AT&  T  Wirelesss  network  has 
 been  upgraded  to  digital.  164  Verizon  Wirelesss  digital  network  reaches  approximately  75  percent  of  its 
 covered  POPs,  165  Cingular  Wirelesss,  95  percent;  166  and  ALLTELs,  over  85  percent.  167  Even  operators 
 with  only  cellular  licenses  are  well  along  in  the  conversion  of  their  analog  networks  to  digital.  US  Cellular, 
 for  example,  offers  digital  service  in  85  percent  of  its  coverage  areas  using  a  mix  of  TDMA  and  CDMA. 
 CTIA  estimates  that  carriers  have  designated  four  times  as  many  channels  for  digital  use  as  for  analog  use.  168 


 159  According  to  Verizon  Wireless,  We  are  aggressively  encouraging  our  customers  to  make  the  switch  from 
 analog  to  digital.  Dan  Meyer,  Analog  Service  Not  Fading  Away,  RCR  WIRELESS  NEWS,  Jan  18,  2001,  at  18. 
 Both  AT&  T  and  Cingular  plan  to  move  their  analog  subscribers  onto  digital  plans  over  the  next  few  years.  Id. 
 ALLTEL  believes  migrating  customers  to  digital  will  help  it  to  reduce  churn.  ALLTEL  Corp.,  SEC  Form  10-  Q, 
 Nov.  13,  2000,  at  19. 


 160  AT&  T  Wireless  Group  Earnings  Commentary,  AT&  T,  Jan.  29,  2001,  at  1,  available  at 


 <http://  www.  att.  com/  wirelessir/  pdf/  004q_  cmnt.  pdf>. 
 161  Verizon  Communications  Posts  Strong  Results  For  Fourth  Quarter  and  2000,  News  Release,  Verizon, 


 Feb.  1,  2001.  The  busy-  hour  is  the  hour  of  the  day  during  which  a  telephone  system  carries  the  most  traffic. 
 162  Dan  Meyer,  Analog  Service  Not  Fading  Away,  RCR  WIRELESS  NEWS,  Jan  18,  2001,  at  18. 


 163  See  Fourth  Report,  at  10170. 
 164  AT&  T  Wireless  Group  Earnings  Commentary,  AT&  T,  Jan.  29,  2001,  at  1,  available  at 
 <http://  www.  att.  com/  wirelessir/  pdf/  004q_  cmnt.  pdf>. 
 165  Verizon  Wireless,  Inc.,  SEC  Form  S-  1,  Aug.  24,  2000,  at  1. 


 166  BellSouth  Corporation,  SEC  Form  10-  K,  Mar.  2,  2001,  at  13. 
 167  Dan  Reingold,  et  al.,  CSFB  Global  Telecom  CEO  Conference  Summary,  U.  S./  Wireline 
 Telecommunications  Services,  Credit  Suisse  First  Boston,  Mar.  19,  2001,  at  29. 
 168  Heather  Forsgren  Weaver,  FCC  to  Assess  Whether  to  Eliminate  Analog  Set  Aside,  RCR  WIRELESS  NEWS, 


 Jan  29,  2001,  at  19. 
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 (i)  Coverage  by  Technology  Type 
 Of  the  six  nationwide  mobile  telephone  operators,  Sprint  PCS  and  Verizon  Wireless  have  CDMA  as  their 
 digital  technology,  AT&  T  Wireless  uses  TDMA,  169  VoiceStream  uses  GSM,  and  Nextel  uses  iDEN. 
 Cingular  Wireless  has  a  mix  of  TDMA  and  GSM  networks. 


 To  date,  271  million  people,  or  95  percent  of  the  total  U.  S.  population,  live  in  counties  where  operators 
 offer  digital  mobile  telephone  service,  using  CDMA,  TDMA,  GSM,  and/  or  iDEN  technologies.  170  These 
 counties  make  up  57  percent  of  the  total  land  area  of  the  United  States.  To  estimate  the  current  levels  of 
 deployment  of  the  four  main  digital  mobile  telephone  technologies  individually,  the  Commission  has 
 prepared  maps  of  each  technology  combining  the  coverage  by  all  of  the  relevant  operators.  171 


 CDMA  and  TDMA  technologies  are  available  to  roughly  equal  numbers  of  Americans.  CDMA  has  been 
 launched  in  at  least  some  portion  of  counties  containing  242  million  people,  or  85  percent  of  the  U.  S. 
 population,  172  while  TDMA  has  been  launched  in  at  least  some  portion  of  counties  containing  238  million 
 people,  or  83  percent  of  the  U.  S.  population.  173  GSM  has  been  launched  in  at  least  some  portion  of 
 counties  containing  197  million  people,  or  approximately  69  percent  of  the  U.  S.  population.  174 


 Digital  SMR  operators  are  the  only  users  of  iDEN  technology  in  the  United  States.  To  date,  digital  SMR 
 operators  have  launched  iDEN-  based  service  in  at  least  some  portion  of  counties  containing  over  232 
 million  people,  or  approximately  81  percent  of  the  U.  S.  population.  175 


 d.  Pricing  Data  and  Trends 
 It  is  difficult  to  identify  sources  of  information  that  track  mobile  telephone  prices  in  a  comprehensive 
 manner.  176  However,  a  number  of  reports  and  other  available  data  indicate  that  the  entrance  of  new 
 competitors  into  the  mobile  telephone  market  continues  to  reduce  prices.  Because  these  studies  use 
 different  methodologies  and  market  samples,  their  findings  vary  and  are  comparable  only  in  the  broadest 
 terms.  Nevertheless,  they  clearly  show  that  the  average  price  of  mobile  telephony  service  has  fallen  since 
 the  Fifth  Report,  continuing  the  trend  of  the  last  several  years. 


 169  AT&  T  has  announced  plans  to  overlay  GSM  on  its  TDMA  network  in  order  to  improve  its  wireless  data 
 capabilities  and  migrate  to  3G  technology.  See  Section  II.  B.  1.c,  3G  Developments,  infra. 
 170  The  broadband  PCS-  based  coverage  is  estimated  using  counties  and  the  cellular-  based  coverage  is 


 estimated  using  CMAs.  The  same  caveats  mentioned  in  Section  II.  A.  1.  b(  v),  Market  Entry,  supra,  apply  to  this 
 analysis  as  well. 


 171  See  Appendix  E,  Maps  2-  6,  at  E-  3  -  E-  7. 


 172  See  Appendix  C,  Table  7,  at  C-  10  and  Appendix  E,  Map  3,  at  E-  4. 
 173  Id.  at  C-  10  and  E-  5. 
 174  Id.  at  C-  10  and  E-  6. 
 175  Id.  at  C-  10  and  E-  7. 
 176  See  Fourth  Report,  at  10164-  10165. 
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 According  to  one  economic  research  and  consulting  firm,  prices  declined  roughly  7  percent  in  2000.  177  The 
 average  cost  of  monthly  service  -  which  was  calculated  across  four  typical  usage  plans  (30,  150,  300  and 
 600  minutes)  across  25  major  cities  -  dropped  from  $42.53  in  December  1999  to  $39.60  in  December 
 2000.  Data  are  not  currently  available  for  smaller  markets.  The  biggest  price  declines  came  for  customers 
 who  subscribed  to  plans  offering  600  minutes  of  talk  time  each  month,  whose  prices  dropped  by  10.1 
 percent,  while  those  on  monthly  plans  with  fewer  minutes  saw  more  modest  reductions.  In  evaluating 
 pricing  plans  offered  in  major  markets  across  the  nation,  another  analyst  estimates  that  the  average  price 
 per  minute  for  wireless  service  fell  by  25  percent  between  1999  and  2000.  178 


 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  Labors  Bureau  of  Labor  Statistics.  179 
 During  2000,  the  Cellular  CPI  180  decreased  by  12.3  percent  while  the  overall  CPI  increased  by  3.4  percent. 
 In  comparison,  the  local  telephone  services  component  increased  by  5.  5  percent  while  the  long  distance 
 telephone  services  component  decreased  by  9.  2  percent.  The  Cellular  CPI  has  declined  almost  30  percent 
 since  the  end  of  1997. 


 (i)  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 
 Wirelesss  wisdom  when  it  introduced  the  first  DOR  plan  in  May  1998.  181  Today  virtually  all  of  the  major 
 operators  offer  a  similar  type  of  DOR  pricing  plan  that  allows  customers  to  purchase  a  bucket  of  MOUs  on 


 177  Econ  One,  Cell  Service  Costs  Drop  Nearly  7%  in  2000,  News  Release,  Jan  18,  2001. 
 178  The  Strategis  Group,  Inc.,  2001. 
 179  Appendix  C,  Table  8,  at  C-  7.  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  U.  S.  Department  of  Labor,  Bureau  of  Labor  Statistics 
 databases  found  on  the  Bureau  of  Labor  Statistics  Internet  site  at  <http://  www.  bls.  gov/  sahome.  html>.  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  June  18,  2001) 
 <http://  www.  bls.  gov/  cpifaq.  htm>. 


 180  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  includes  business  calls, 
 telephone  equipment  rental,  portable  radios  and  pagers.  Bureau  of  Labor  Statistics,  How  BLS  Measures  Price 
 Change  for  Cellular  Telephone  Service  in  the  Consumer  Price  Index  (visited  May  14,  2001) 
 <http://  www.  bls.  gov/  cpifactc.  htm>. 


 181  See  AT&  T  Launches  First  National  One-  Rate  Wireless  Service  Plan,  News  Release,  AT&  T  Corporation 


 (  AT&  T),  May  7,  1998. 
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 Federal  Communications  Commission  FCC  01-  192 
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 a  nationwide  or  nearly  nationwide  network  without  incurring  roaming  or  long  distance  charges.  182 
 In  addition  to  the  national  pricing  plan  trend,  a  number  of  large  carriers  -  including  AT&  T  Wireless, 
 Verizon  Wireless,  and  Cingular  Wireless  -  have  begun  offering  regional  DOR  calling  plans.  183  These  plans 
 give  customers  a  bucket  of  MOUs  to  use  in  a  particular  region  without  incurring  roaming  or  long  distance 
 charges.  Verizon  Wirelesss  SingleRate  West  calling  plan,  for  example,  allows  customers  to  call  from 
 anywhere  to  anywhere  in  an  11-  state  region  without  incurring  additional  charges.  184  Cingular  Wireless  has 
 five  regional  calling  plans,  as  well  as  plans  that  allow  subscribers  to  choose  the  areas  that  define  the  home-calling 
 region.  185  Analysts  believe  these  plans  are  designed  to  compete  against  regional  competitors  such  as 
 Powertel  and  Qwest  Communications  International,  Inc.  (  Qwest).  186  Leap,  through  its  subsidiary  Cricket, 
 allows  subscribers  to  make  unlimited  local  calls  and  receive  calls  from  anywhere  in  the  world  for  one  flat 
 rate  of  $30  per  month.  For  a  further  discussion,  see  Section  II.  A.  1.e,  infra. 


 For  the  global  traveler,  AT&  T  Wireless  and  Nextel  have  come  out  with  pricing  plans  that  provide 
 subscribers  with  one  (terrestrial-  based)  mobile  phone  and  one  phone  number  worldwide.  For  an  additional 
 $5  monthly  fee  to  their  domestic  service  plan,  Nextel  Worldwide  subscribers  can  use  their  phones  outside 
 the  United  States  and  pay  a  flat  rate  per  minute  pricing  based  on  the  country  from  which  they  are  calling.  187 
 Rates  range  from  $0.99  per  minute  for  most  of  Europe;  $1.99  per  minute  for  Asia,  South  America,  and  the 
 Middle  East;  and  $2.99  -  $4.99  per  minute  for  select  countries  in  Africa,  Eastern  Europe  and  Southeast 
 Asia.  Nextel  Worldwide  customers  access  the  service  through  a  dual  mode  iDEN/  GSM  phone.  AT&  T 
 Wirelesss  WorldConnect  service  costs  an  additional  $7.  99  a  month,  plus  a  $25  fee  for  an  AT&  T  Wireless 
 WorldConnect  card.  188  Each  call  made  or  received  while  abroad  is  billed  at  a  rate  of  $0.  99  per  minute  plus 
 additional  long  distance  charges  based  on  the  international  zone  in  which  the  user  is  located.  189  AT&  T 
 Wireless  WorldConnect  subscribers  must  use  a  dual  TDMA/  GSM  capable  phone  to  access  international 
 services.  190 


 182  See  Paul  Kagan  Associates,  Inc.,  National  One-  Rate  Plans  Take  Off,  WIRELESS  MARKET  STATS,  June  16, 
 2000,  at  11. 
 183  Deborah  Mendez-  Wilson,  Big  Carriers  Get  Personal  With  Regional  Calling  Plans,  WIRELESSWEEK,  Feb 


 26,  2001,  at  12. 
 184  Colorado,  Wyoming,  Utah,  Arizona,  New  Mexico,  Nevada,  Idaho,  Montana,  California,  Oregon,  and 


 Washington.  Verizon  Wireless  Debuts  SingleRate  West,  News  Release,  Verizon,  Feb.  20,  2001. 
 185  Deborah  Mendez-  Wilson,  Big  Carriers  Get  Personal  With  Regional  Calling  Plans,  WIRELESSWEEK,  Feb 


 26,  2001,  at  12. 
 186  Id. 


 187  Nextel  Introduces  Nextel  Worldwide  Service  -  Offers  Convenience  of  One  Phone,  One  Number, 
 Worldwide,  News  Release,  Nextel,  Apr.  3,  2000.  Nextel  Worldwide  service  was  designed  in  response  to  a  survey, 
 sponsored  by  Nextel,  that  found  that  most  business  travelers  do  not  use  cell  phones  when  they  travel  abroad.  Id. 


 188  AT&  T  Wireless,  AT&  T  WorldConnect  (visited  Mar.  9,  2001) 


 <http://  www.  attws.  com/  business/  gov/  explore/  intl_  calling/  world_  connect/>.  The  WorldConnect  card  allows  the 
 phone  to  work  internationally. 


 189  Id. 


 190  Id. 
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 (ii)  Roaming 
 All  mobile  calling  plans  specify  a  calling  area  -  such  as  a  particular  metropolitan  area,  the  East  Coast,  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  subscribers  carrier,  and  sometimes  the  charges  are 
 used  to  pay  a  carrier  other  than  the  subscribers,  on  whose  network  the  subscriber  was  roaming.  191  This 
 source  of  revenue  is  particularly  important  to  rural  and  smaller  carriers.  192 


 Roaming  rates  have  been  declining,  continuing  the  trend  described  in  the  Fifth  Report.  193  One  analyst 
 estimates  that  the  average  per  minute  roaming  rate  for  six  large  regional  carriers  declined  by  18  percent, 
 from  $0.43  in  1999  to  $0.36  in  2000.  194  US  Cellular  attributed  a  recent  decline  in  its  roaming  revenue,  in 
 part,  to  a  general  decline  in  roaming  rates  throughout  the  industry.  195  The  company  expects  the  downward 
 trend  to  continue  as  new  wireless  operators  begin  service  in  the  companys  markets,  and  its  roaming 
 partners  are  able  to  switch  their  business  to  these  new  operators.  196  CTIA  also  reported  the  first  year-  over-year 
 decline  in  roaming  revenues  for  the  mobile  telephony  industry  since  it  began  tracking  the  amounts  in 
 1989,  from  $4.1  billion  at  the  end  of  1999  to  $3.9  billion  at  the  end  of  2000.  197  CTIA  attributes  this  to 
 increasingly  large  footprints  of  each  carrier  and  wireless  companies  treating  many  calls  as  local,  instead  of 


 191  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,  Mar.  26,  2001,  at  23. 


 192  For  example,  Dobson  got  45  percent  of  its  operating  revenues  through  roaming  charges  in  the  third 


 quarter  of  2000.  Dobson  Communications  Corp.,  SEC  Form  10Q,  Nov.  14,  2000,  at  4.  See  also,  Kelly  Carroll, 
 Wireless:  The  Rural  Way,  TELEPHONY,  Jan.  1,  2001  (Rural  Cellular  Corp.  states  that  [  r]  oaming  is  critical  for  us), 
 available  in  2001  WL  6907667;  and  Paul  Kagan  Associates,  Inc.,  In  Spite  of  Rate  Stepdowns,  Roaming  Still  a 
 Cash  Cow  for  Rural  Carriers,  WIRELESS  TELECOM  INVESTOR,  Feb.  22,  2001,  at  4  (showing  roaming  revenue  as 
 percentage  of  total  revenues). 


 193  See  Fifth  Report,  at  17679. 


 194  Linda  J.  Mutschler,  et  al.,  The  Next  Generation  V:  Wireless  in  the  US,  Equity  Research,  Merrill  Lynch, 
 Mar.  9,  2001,  at  9.  Solomon  Smth  Barney  also  estimates  2000  roaming  rates  to  be  about  the  same  ($  0.35). 
 Michael  Rollins,  et  al.,  Wireless  by  the  Minute,  Salomon  Smith  Barney,  Equity  Research,  Jan.  8,  2001,  at  11.  See 
 also,  Kelly  Carroll,  Wireless:  The  Rural  Way,  TELEPHONY,  Jan.  1,  2001  (  roaming  prices  continue  to  decline), 
 available  in  2001  WL  6907667.  Verizon  Wirelesss  preliminary  analysis  of  its  roaming  amounts  payable  and 
 receivable  between  December  1999  and  December  2000  showed  a  decline  in  roaming  costs  from  between  5  and  64 
 percent.  Verizon  Wireless,  Automatic  and  Manual  Roaming  Obligations  Pertaining  to  Commercial  Mobile  Radio 
 Services,  Comments,  WT  Docket  No.  00-  193,  at  4,  but  see  Id.,  at  note  9.  Corr  Wireless  Communications,  LLC,  a 
 rural  mobile  telephony  provider,  claims  that  the  rates  it  receives  for  roaming  have  been  declining  for  years,  and 
 that  its  rates  with  Cingular  Wireless  fell  to  an  all  time  low  of  $0.25  per  minute  in  2000.  Corr  Wireless 
 Communications,  LLC,  Automatic  and  Manual  Roaming  Obligations  Pertaining  to  Commercial  Mobile  Radio 
 Services,  Comments,  WT  Docket  No.  00-  193,  at  2. 


 195  United  States  Cellular  Corp.,  SEC  Form  10-  Q,  Nov.  13,  2000,  at  4. 


 196  Id. 
 197  See  Appendix  C,  Table  1,  at  C-  2. 
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 roaming.  198 
 Despite  per  minute  reductions  and  the  industry-  wide  fall  in  roaming  revenues,  declining  roaming  revenues 
 is  the  exception  for  regional  and  rural  carriers.  In  a  recent  study  comparing  the  1999  and  2000  roaming 
 revenues  of  12  such  carriers,  only  the  two  largest  carriers  showed  declines  (US  Cellular  and  ALLTEL).  199 
 The  rest  showed  increases  in  roaming  revenue,  as  roaming  MOUs  outpaced  the  decline  in  roaming  rates  for 
 these  companies.  200 


 (iii)  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.  One  analyst  estimated  that  approximately  11  percent  of  U.  S. 
 wireless  phone  users  subscribed  to  prepaid  plans  at  the  end  of  2000,  up  from  6  percent  in  1999.  201  This 
 contrasts  sharply  with  the  experience  with  prepaid  wireless  plans  in  Europe.  According  to  one  analysts 
 estimates,  prepaid  users  accounted  for  79  percent  of  all  new  wireless  customers  in  Western  Europe  in 
 2000,  and  now  account  for  approximately  60  percent  all  wireless  customers  there.  202 


 A  large  number  of  carriers  now  offer  some  form  of  prepaid  plan,  including  Verizon  Wireless,  AT&  T 
 Wireless,  BellSouth  and  SBC  (individually,  and  not  through  Cingular  Wireless),  203  Sprint  PCS, 
 VoiceStream,  ALLTEL,  US  Cellular,  Centennial  Communications  Corp.,  CenturyTel,  Inc.,  Cincinnati  Bell 
 Wireless,  Dobson,  Rural  Cellular  Corporation  (  Rural  Cellular),  TeleCorp,  Triton  PCS,  Qwest,  and 
 Powertel.  204  In  addition,  the  unlimited  local  calling  plans  described  in  the  Wireless/  Wireline  section  below 
 are  all  prepaid  plans. 


 198  Wireless  Subscribership  Up  28%  in  Year  2000:  CTIA  releases  Semi-  Annual  Wireless  Industry  Survey, 
 News  Release,  CTIA,  Apr.  24,  2001. 
 199  Paul  Kagan  Associates,  Inc.,  In  Spite  of  Rate  Stepdowns,  Roaming  Still  a  Cash  Cow  for  Rural  Carriers, 
 WIRELESS  TELECOM  INVESTOR,  Feb.  22,  2001,  at  4 
 200  Id. 


 201  Johnathan  Burns,  Tales  Of  The  Tape:  Prepaid  Wireless  A  New  Way  Of  Wireless,  DOW  JONES  NEWSWIRE, 
 Jan.  29,  2001  (citing  Knox  Bricken  of  the  Yankee  Group).  Another  analyst  estimated  that  10  percent  of  users  had 
 prepaid  plans.  Elizabeth  V.  Mooney,  Prepaid  rings  up  sales,  RCR  WIRELESS  NEWS,  Jan.  22,  2001,  at  20  (citing 
 Michael  Doherty  of  Ovum,  Inc.).  For  1999  percentage,  see  Fifth  Report,  at  17680. 


 202  John  Jensen,  et  al.,  Mobile  Matters:  How  Long  Before  the  Present  Stops  .  .  .  and  the  Future  Begins?, 


 Equity  Research,  J.  P.  Morgan  Securities,  at  9-  10.  This  is  up  from  51  percent  in  1999.  Id.  One  analyst  suggests 
 two  main  reasons  for  the  greater  number  of  prepaid  subscribers  in  Europe:  (1)  European  consumers  are  much  more 
 accustomed  to  prepaying  for  purchases;  and  (2)  calling  party  pays  enables  prepaid  wireless  subscribers  to  use  the 
 phone  for  incoming  calls  without  incurring  any  charges.  Todd  Rethemeier,  The  Mobile  Millennium    Wireless 
 Telecommunications  Services,  J.  P.  Morgan  Securities,  May  3,  2000,  at  13.  One  analyst  believes  that  if  credit 
 checks  were  illegal  in  the  United  States,  as  they  are  in  Italy,  prepaid  would  be  much  more  common  here:  wireless 
 operators  would  promote  prepaid  plans  more  aggressively  if  they  were  unable  to  exclude  customers  from  their 
 postpaid  plans  who  had  a  history  of  non-  payment  of  bills.  Adam  Zawel,  Prepaid  Wireless  Series,  Part  4:  The 
 United  States  Just  Doesnt  Get  It  .  .  .  Yet,  The  Yankee  Group,  June  2000,  at  5,  8. 


 203  Ayse  Ozgur  Aytar,  The  State  of  the  U.  S.  Prepaid  Market,  WIRELESSNOW  GUEST  COLUMN,  Feb.  6,  2001. 


 204  Paul  Kagan  Associates,  Inc.,  Prepaid  Proliferation,  WIRELESS  MARKET  STATS,  May  18,  2000,  at  2-  4. 
31
 Federal  Communications  Commission  FCC  01-  192 
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 Powertel  is  particularly  aggressive  in  the  prepaid  market.  As  of  year-  end  2000,  Powertel  reported  that  54 
 percent  of  its  subscriber  base  was  on  prepaid  pricing.  205  In  the  fourth  quarter  of  2000,  83  percent  of 
 Powertels  104,000  new  subscribers  were  prepaid.  206 


 e.  Wireless/  Wireline  Competition 
 According  to  a  recent  survey  by  the  Yankee  Group,  about  3  percent  of  mobile  telephone  subscribers  rely  on 
 their  wireless  phone  as  their  only  phone.  207  While  most  wireless  customers  may  not  be  willing  to  cut  the 
 cord  just  yet  in  the  sense  of  canceling  their  subscription  to  wireline  telephone  service,  it  is  indisputable 
 that  wireless  service  has  significantly  changed  the  way  Americans  communicate.  Initially  a  business  tool, 
 wireless  phones  have  become  a  mass-  market  consumer  device.  According  to  one  survey,  77  percent  of 
 wireless  customers  said  they  use  their  phones  primarily  for  personal  calls.  208  For  some,  wireless  service  is 
 no  longer  a  complement  to  wireline  service  but  has  become  the  preferred  method  of  communication.  In  a 
 survey  performed  for  the  Consumer  Electronics  Association,  three  in  10  wireless  phone  users  stated  they 
 would  rather  give  up  their  home  telephone  than  their  wireless  phone.  209  Among  wireless  users  aged  18  to 
 34  years  old,  that  figure  rose  to  45  percent. 


 In  some  areas,  wireless  use  has  begun  to  erode  wireline  revenue  due  to  technology  substitution,  that  is, 
 the  substitution  of  new  technologies  for  existing  ones.  210  BellSouth,  for  example,  stated  in  February  2001 
 that  it  was  exiting  the  payphone  business  in  part  due  to  business  lost  to  wireless  phones.  211  Twenty  million 


 205  Powertel,  Inc.  Announces  Preliminary  Fourth  Quarter  2000  Financial  Results,  News  Release,  Powertel, 
 Feb.  1,  2001. 
 206  Id. 


 207  Judy  Saries,  Wireless  Users  Hanging  Up  On  Landline  Phones,  NASHVILLE  BUSINESS  JOURNAL,  Feb.  2, 
 2001.  CTIA  estimates  that  number  could  be  as  high  as  5  percent,  based  on  a  February  2000  survey  it  sponsored. 
 Consumers  Replacing  Landline  Phones  with  Wireless,  KNIGHT  RIDDER/  TRIBUNE  BUSINESS  NEWS,  Jan.  10,  2001, 
 available  in  2001  WL  2837499. 


 208  Majority  of  Customers  Use  Cell  Phones  for  Personal  Calls,  RCR  WIRELESS  NEWS,  Jan.  29,  2001,  at  29 


 (citing  a  survey  conducted  by  Cellular  One  Group). 
 209  Will  Wireless  Phones  Make  Traditional  Home  Telephones  Obsolete?,  News  Release,  Consumer 


 Electronics  Association,  Apr.  6,  2000. 
 210  Andrew  Backover,  AT&  T  Loss  Reflects  Long-  Distance  Shift  Consumers  Turn  To  Calling  Cards,  Wireless, 


 USA  TODAY,  Jan.  30,  2001,  at  B3.  A  similar  term,  landline  displacement,  refers  more  specifically  to  the 
 substitution  of  mobile  phones  for  wireline  phones.  Deborah  Mendez-  Wilson,  Wireless  Takes  a  Bite  of  Pay-  phone 
 Biz,  WIRELESSWEEK,  Feb  12,  2001,  at  5. 


 211  BellSouth  Announces  Plans  For  Public  Communications  Unit,  News  Release,  BellSouth,  Feb.  2,  2001. 


 According  to  Charlie  Coe,  President  of  BellSouth  Network  Services,  BellSouth  has  carefully  evaluated  the  market 
 trends  in  the  payphone  business  which  indicate  that  our  customers  are  opting  for  the  new  technology  options  we 
 provide,  including  wireless  telephones  and  interactive  pagers.  Industry  insiders  expect  the  payphone  business  to 
 continue  to  shrink  as  wireless  penetration  increases.  Deborah  Mendez-  Wilson,  Wireless  Takes  a  Bite  of  Pay-  phone 
 Biz,  WIRELESSWEEK,  Feb  12,  2001,  at  5. 
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 Federal  Communications  Commission  FCC  01-  192 
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 mobile  telephone  customers  have  service  plans  that  do  not  charge  extra  for  long  distance,  212  and  at  least  one 
 analyst  believes  that  such  plans  are  reducing  wireline  long  distance  minutes  and  revenues.  213  Another 
 analyst  estimates  that  20  percent  of  all  outbound  wireless  voice  minutes  are  used  for  long  distance.  214 
 AT&  T  blamed  its  fourth  quarter  2000  $1.7  billion  loss  in  part  on  customers  abandoning  wireline  long 
 distance  calls  for  wireless  phones,  e-  mail  and  prepaid  calling  cards.  215  In  one  survey  conducted  in  January 
 2000,  12  percent  of  respondents  said  they  purchased  a  wireless  phone  instead  of  installing  an  additional 
 wireline  phone.  216 


 A  few  wireless  carriers  have  begun  offering  service  plans  designed  to  compete  directly  with  wireline  local 
 telephone  service.  217  For  example,  Leap,  through  its  Cricket  subsidiary,  now  offers  its  Comfortable 
 Wireless  mobile  telephone  service  in  12  markets,  predominately  in  the  South  and  Southwest.  218  At  the  end 
 of  2000,  Leap  had  more  than  190,000  customers,  up  nearly  nine-  fold  from  the  22,000  customers  reported 
 at  the  beginning  of  the  year.  219  Leaps  service  allows  subscribers  to  make  unlimited  local  calls  and  receive 
 calls  from  anywhere  in  the  world  for  one  flat  rate  of  $30  per  month.  220  Roaming  outside  the  local  area  is 
 not  available,  221  and  customers  pay  extra  for  long  distance  calls.  222  According  to  Leap,  about  half  of  its 
 customers  view  their  phones  as  replacements  for  first  or  second  lines,  223  and  about  7  percent  of  its 


 212  Andrew  Backover,  AT&  T  Loss  Reflects  Long-  Distance  Shift  Consumers  Turn  To  Calling  Cards,  Wireless, 
 USA  TODAY,  Jan.  30,  2001,  at  B3. 
 213  Id  (citing  analyst  Peter  Friedland  at  W.  R.  Hambrecht). 


 214  Michael  Rollins,  et  al.,  Wireless  by  the  Minute,  Equity  Research,  Salomon  Smith  Barney,  Jan.  8,  2001,  at 
 8.  Sprint  PCS  markets  its  nationwide  digital  wireless  network  as  a  long-  distance  alternative.  Andrew  Backover, 
 AT&  T  Loss  Reflects  Long-  Distance  Shift  Consumers  Turn  To  Calling  Cards,  Wireless,  USA  TODAY,  Jan.  30,  2001, 
 at  B3. 


 215  Andrew  Backover,  AT&  T  Loss  Reflects  Long-  Distance  Shift  Consumers  Turn  To  Calling  Cards,  Wireless, 


 USA  TODAY,  Jan.  30,  2001,  at  B3. 
 216  Callie  Nelson,  Replacing  Landline  with  Wireless:  How  Far  Can  It  Go?,  IDC,  Dec.  2000  (citing  IDCs 


 Personal  Wireless  Communications  User  Survey,  2000). 
 217  One  analyst  argues  that  recent  price  reductions  give  wireless  price  parity  with  wireline,  at  least  at  pricing 


 around  $130  per  month.  See  Daniel  J.  Berninger,  Telephony  Unplugged:  Wireless  Achieves  Price  Parity  with 
 Wireline  (visited  Mar.  8,  2001)  <http://  slides.  pulver.  com/  slides/  login.  asp>. 


 218  Leap,  Cricket  (visited  Mar.  9,  2001)  <http://  www.  leapwireless.  com/  bcindex.  html>.  Chattanooga, 


 Nashville,  Knoxville,  and  Memphis,  TN;  Charlotte  and  Greensboro,  NC;  Tulsa,  OK;  Tucson,  AZ;  Wichita,  KS; 
 Little  Rock,  AR;  Albuquerque  and  Santa  Fe,  NM;  and  Salt  Lake  City,  UT.  Leap,  Cricket  Service  Areas  (visited 
 Mar.  5,  2001)  <http://  www.  cricketcommunications.  com/  areas.  asp>.  See  also  Fifth  Report,  at  17673. 


 219  Leap  Reports  Results  for  Fourth  Quarter  of  Fiscal  2000,  News  Release,  Leap,  Feb.  14,  2001. 


 220  The  monthly  fee  varies  slightly  by  service  area. 
 221  Roaming  is  not  available  even  in  other  Leap  markets.  Leap,  Automatic  and  Manual  Roaming  Obligations 
 Pertaining  to  Commercial  Mobile  Radio  Services,  Comments,  WT  Docket  No.  00-  193,  at  6. 
 222  Leap,  Operating  Companies  (visited  Mar.  5,  2001)  <http://  www.  leapwireless.  com/  site/  index.  html>. 


 223  S.  Flannery,  Telecom  -  Wireline:  What  Are  The  Competitors  Up  To?,  Industry  Report,  Morgan  Stanley, 
 Dean  Witter,  Feb.  14,  2001,  at  2  (citing  Harvey  White,  Chairman  and  CEO  of  Leap  Wireless  International,  Inc.). 
33
 Federal  Communications  Commission  FCC  01-  192 
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 customers  in  its  Nashville  and  Chattanooga  markets  have  dropped  their  wireline  home  phones  altogether.  224 
 In  November  2000,  Leap  also  claimed  that  60  percent  of  its  customers  use  their  wireless  phones  as  their 
 primary  phone.  225 


 Leaps  service  plans  seem  to  have  encouraged  its  competition  to  develop  similar  offerings.  226  In  August 
 2000,  US  Cellular  launched  its  flat-  rate  wireless  plan,  MetroZone,  in  a  Leap  market,  Knoxville,  Tennessee. 
 US  Cellular  advertises  MetroZone  as  an  alternative  to  traditional  phone  service  or  as  a  second  line 
 option.  227  ALLTEL  is  test  marketing  its  own  all-  you-  can-  talk  local  wireless  service  plan  in  five  other 
 markets  where  Leap  has  launched.  228  The  plan,  known  as  Boomerang  in  Arizona  and  New  Mexico,  and 
 MetroTalk  in  Arkansas  and  North  Carolina,  costs  about  $30  per  month. 


 In  January  2001,  Rural  Cellular  (through  its  subsidiary  Unicel)  began  offering  Go  About  Phone  service. 
 The  Go  About  plan  includes  3,000  minutes  per  month  229  in  the  local  calling  area  for  about  $40  (long 
 distance  is  extra).  Rural  Cellular  calls  its  plan  another  option  for  .  .  .  primary  and  secondary  phone  lines.  230 


 2.  Other  Competitors:  Resellers  and  Satellite  Operators 
 This  section  discusses  two  other  types  of  operators  that  are  competing  in  the  mobile  telephone  segment: 
 resellers  and  satellite  operators. 


 a.  Resellers 
 Resellers  offer  service  to  consumers  by  purchasing  airtime  at  wholesale  rates  from  facilities-  based 
 providers  and  reselling  it  at  retail  prices.  231  In  2000,  the  top  20  resale  providers  had  just  over  3  million 


 224  Utah  Residents  Begin  to  Use  Cell  Phones  as  Primary  Communications  Device,  KNIGHT  RIDDER/  TRIBUNE 
 BUSINESS  NEWS,  Feb.  5,  2001,  available  in  2001  WL  12166453. 
 225  Deborah  Young,  Usurping  Wired  Services:  Lofty  Goal,  But  ...  ,  WIRELESS  REVIEW,  Nov.  1,  2000, 


 available  in  2001  WL  7119447. 
 226  As  mentioned  in  the  Fifth  Report,  Midwest  Wireless  had  launched  an  unlimited  local  calling  plan  called 


 Realm  in  four  Minnesota  communities  in  March  2000.  See  Fifth  Report,  at  17674. 
 227  U.  S.  Cellular  Launches  MetroZone  In  Knoxville,  News  Release,  U.  S.  Cellular,  Aug.  1,  2000. 


 228  Little  Rock,  AK;  Charlotte  and  Greensville,  NC;  Tucson,  AZ;  and  Albuquerque,  NM.  Deborah  Mendez-Wilson, 
 Boomerang  Bounces  into  Court,  WIRELESS  WEEK,  Feb.  5,  2001,  at  5. 
 229  Cricket  states  that,  on  average,  its  customers  use  1,000  minutes  a  month,  a  figure  which  the  company 


 claims  is  comparable  to  typical  landline  usage.  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. 


 230  Unicel  Offers  Landline  Alternative:  Unicel  Go  About  Phone  is  the  Mobile  Phone  That  Reaches  All  Over 


 Town,  News  Release,  Rural  Cellular,  Jan.  11,  2001. 
 231  Interconnection  and  Resale  Obligations  Pertaining  to  Commercial  Mobile  Radio  Services,  First  Report 


 and  Order,  11  FCC  Rcd  18455,  18457  (1996). 
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 Federal  Communications  Commission  FCC  01-  192 
 35 
 subscribers,  which  is  an  increase  of  100  percent  over  1999.  232  WorldCom  continues  to  be  the  largest 
 reseller,  with  over  2  million  customers,  accounting  for  65  percent  of  all  the  subscribers  reported  by  the  20 
 largest  resellers.  233 


 b.  Satellite  Operators 
 In  the  past  six  years  an  increasing  number  of  satellite  operators  have  offered  mobile  services  in  the  U.  S., 
 including  Motient,  TMI,  Inmarsat,  Iridium  and  Globalstar.  Several  of  the  companies  have  experienced 
 financial  difficulties  during  the  past  two  years.  Two  companies,  Iridium  LLC.  (Iridium)  which  has  an 
 operating  satellite  system,  and  ICO  Global  Communications  (  ICO)  which  did  not  have  a  system  in 
 operation  declared  bankruptcy  under  Chapter  11  and  emerged  from  bankruptcy  in  2000.  Another 
 company,  Globalstar  Telecommunications  LTD.  (  Globalstar)  is  currently  offering  service  but  failed  to 
 make  certain  debt  payments  in  2000.  Five  of  these  companies  are  briefly  described  below. 


 Iridium  Iridium  launched  commercial  mobile  telephone  service  via  satellite  in  November  1998.  234  The 
 company  declared  bankruptcy  in  August  1999,  235  and  discontinued  service  in  March  2000.  236  In  August 
 2000,  Motorola,  which  had  been  maintaining  the  Iridium  system,  began  planning  to  decommission  the 
 systems  satellites.  237  However,  before  the  decommission  schedule  was  finalized,  Motorola  (a  major 
 investor  in  Iridium),  other  Iridium  investors,  and  the  bankruptcy  court  entertained  several  bids  for  Iridiums 
 assets.  238  In  November  2000,  they  accepted  a  bid  from  a  group  of  investors  called  Iridium  Satellite  LLC 
 (  Iridium  Satellite)  who  offered  to  buy  Iridium  for  $25  million,  including  $6.  5  million  in  cash.  239  On 
 December  12,  2000,  Iridium  Satellite  completed  its  acquisition  of  Iridiums  assets.  240 


 232  See  Appendix  C,  Table  9,  at  C-  8. 
 233  In  November  2000,  WorldCom  announced  plans  to  issue  two  tracking  stocks  for  its  businesses, 
 WorldCom  and  MCI  shares.  Its  WorldCom  shares  will  reflect  the  performance  of  the  assets  of  its  wireless 
 resale  business.  WorldCom  to  Realign  Businesses,  Create  Two  Tracking  Stocks,  News  Release,  WorldCom,  Nov. 
 1,  2000. 


 234  The  Worlds  First  Global  Satellite  Telephone  and  Paging  Company  Starts  Service  Today;  Iridium  Ushers 


 in  New  Era  of  Global  Communication,  News  Release,  Iridium,  Nov.  1,  1998. 
 235  Iridium  Files  for  Chapter  11  Bankruptcy,  Defaults  on  Bond  Payment,  MOBILE  SATELLITE  NEWS,  Aug.  19, 
 1999,  available  in  1999  WL  8217611. 
 236  Motorola  Readies  Fall  of  Iridium  Satellites;  No  Rescuer  Found  for  Phone  System,  CHICAGO  TRIBUNE, 
 Aug.  24,  2000,  available  in  2000  WL  3700414. 
 237  Id.;  Hilary  Smith,  Castle  Harlan  withdraws  offer  to  salvage  Iridium,  RCR  RADIO  COMMUNICATIONS 
 REPORT,  Aug.  7,  2000,  available  in  2000  WL  26131991. 
 238  Hilary  Smith,  Iridium  resurrection  in  the  works,  RCR  RADIO  COMMUNICATIONS  REPORT,  Nov.  27,  2000, 
 available  in  2000  WL  26131991. 
 239  Iridiums  Last  Stand?,  MOBILE  SATELLITE  NEWS,  Nov.  2,  2000,  available  in  2000  WL  9328211. 


 240  Iridium  North  America,  Homepage  (visited  Jan.  4,  2001)  <http://  www.  iridiumusa.  com>. 
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 Iridium  Satellite  reinitiated  service  at  the  end  of  March  2001.  241  Iridium  Satellite  expects  mobile  satellite 
 service  to  cost  about  $1.  50  per  minute,  and  handset  prices  will  begin  at  $950  for  the  Motorola  handset.  242 
 At  the  time  it  reinstated  mobile  satellite  service,  Iridium  Satellite  had  at  least  20,  000  users  and  $3  million 
 per  month  in  revenues  due  to  a  two-  year  contract  signed  with  the  Department  of  Defense  in  December 
 2000.  243  Iridium  Satellite  plans  to  target  30,  000  former  Iridium  customers  to  renew  service  contracts.  244 
 Former  customers  will  be  offered  free  software  upgrades  for  their  phones  along  with  other  promotions  the 
 company  is  formulating.  245  Iridium  Satellite  officials  have  expressed  optimism  about  their  chances  for 
 success,  pointing  to  relatively  low  operating  costs  and  a  low  break-  even  mark.  246 


 ICO  ICO  emerged  from  bankruptcy  in  May  2000  following  a  $1.2  billion  investment  led  by  Craig 
 McCaw.  247  The  new  company  is  named  New  ICO  Global  Communications  Ltd.  (  New  ICO),  and  it  plans 
 to  merge  with  Teledesic  Corporation,  a  broadband  data  satellite  services  company  owned  by  Craig 
 McCaw.  248  The  two  companies  will  become  subsidiaries  of  the  holding  company  ICO  Teledesic  Global 
 Ltd.,  which  is  already  a  controlling  shareholder  of  New  ICO.  249  New  ICO  plans  to  market  mobile  and  fixed 
 satellite  voice  and  data  services  by  delivering  high-  speed  services  such  as  wireless  Internet  access.  250  New 
 ICOs  network  will  consist  of  12  satellites.  251  Recently,  New  ICO  asked  the  Commission  to  permit  it  to  use 


 241  Iridium  Satellite  LLC  Launches  Global  Communications  Services,  News  Release,  Iridium  Satellite,  Mar. 
 28,  2001. 
 242  Iridium  Satellite  does  not  set  the  price  for  per  minute  mobile  satellite  service.  Pricing  plans  are  set  by 
 Iridium  Satellites  wireless  partners,  and  Iridium  Satellite  expects  its  wireless  partners  to  charge  as  low  as  $1.  50 
 per  minute.  Motorola  has  agreed  to  continue  manufacturing  handsets  for  Iridium  Satellite.  Motorola  plans  to 
 release  an  upgraded  phone  in  July  2001  that  will  cost  about  $1,495.  Iridium  Is  Expected  to  Announce  Relaunch  of 
 Mobile-  Phone  Service,  THE  WALL  STREET  JOURNAL,  Mar.  28,  2001.  Transcript  of  a  conference  call  regarding 
 Iridium  Satellite  LLC,  FITZGERALD  COMMUNICATIONS,  Dec.  12,  2000. 


 243  Malcolm  Spicer,  Iridium  Satellite  Lands  Defense  Contract,  CT  WIRELESS,  Dec.  7,  2000,  available  in  2000 
 WL  6392736. 
 244  Transcript  of  a  conference  call  regarding  Iridium  Satellite  LLC,  FITZGERALD  COMMUNICATIONS,  Dec.  12, 
 2000. 
 245  Id. 


 246  Dan  Colussy,  Chairman  of  Iridium  Satellite,  said  operating  costs  are  $7  million  per  month.  Colussy  also 
 expects  Iridium  Satellite  will  be  able  to  break  even  with  approximately  60,000  subscribers,  about  the  same  number 
 of  subscribers  Iridium  had  when  the  company  shut  down  its  system.  Transcript  of  a  conference  call  regarding 
 Iridium  Satellite  LLC,  FITZGERALD  COMMUNICATIONS,  Dec.  12,  2000. 


 247  Michael  J.  Martinez,  Teledesic,  ICO  To  Merge,  AP  ONLINE,  May  17,  2000. 


 248  Id. 
 249  ICO-  Teledesic  Global  Announces  Investment  Agreements  Totaling  More  Than  $1  Billion,  News  Release, 
 Teledesic  Corporation,  Jul.  11,  2000. 
 250  New  ICO  Global  Communications  Ltd.,  SEC  Form  S-  4,  Sept.  20,  2000,  at  91. 


 251  Id. 
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 its  spectrum  to  provide  a  terrestrial  service  that  would  be  ancillary  to  and  serve  its  satellite  network.  252 
 New  ICO  states  that  it  needs  this  authority  in  order  to  provide  service  inside  buildings  and  in  certain  urban 
 areas  in  order  to  operate  a  viable  business.  253 


 Globalstar  In  February  2000,  Globalstar  initiated  commercial  mobile  voice  service  via  satellite  and  was 
 the  only  satellite  carrier  providing  such  service  as  of  year-  end  2000.  Globalstar  had  about  31,000 
 subscribers  as  of  year-  end  2000,  and  about  $3.7  million  in  revenue  over  the  course  of  the  year.  254  Analysts 
 and  Globalstar  management  agree  that  the  company  will  be  unable  to  generate  profits  until  it  has  close  to 
 one  million  subscribers.  255  To  attract  customers,  Globalstar  has  offered  several  promotions  throughout  the 
 year  and  cut  prices  for  both  its  phones  and  service.  256  Its  mobile  satellite  phones,  manufactured  by 
 QUALCOMM,  Inc.  retail  for  approximately  $1,200,  but  when  offered  as  part  of  a  promotion,  can  cost  as 
 low  as  $800.  257  Per  month  service  charges  range  from  $24.95  with  zero  minutes  to  $499.95  for  500 
 minutes.  Additional  minutes  cost  between  $0.  99  and  $1.  69,  depending  on  the  service  plan  chosen.  258 
 Globalstar  has  nearly  20  distributors  of  its  products  and  services  in  the  United  States.  259 


 During  the  second  half  of  2000,  Globalstar  experienced  financial  difficulties.  In  June,  Globalstar  failed  to 


 252  New  ICO  made  a  request  in  March  2001  for  the  Commission  to  grant  it  the  authority  to  install  and 
 connect  its  satellite  system  to  a  terrestrial  cellular  network.  This  request  would  require  the  Commission  to  amend 
 the  2  GHz  spectrum  rules  for  MSS  operators.  Bruce  Branch,  McCaw  Creates  Stir  By  Asking  FCC  For  Terrestrial 
 Spectrum,  COMMUNICATIONS  DAILY,  Apr.  4,  2001,  available  in  2001  WL  5052893;  Barnaby  J.  Feder,  Satellite 
 Venture  Seeks  Right  To  Offer  Land-  Based  Service,  NEW  YORK  TIMES,  Apr.  2,  2001,  at  C-  2. 


 253  New  ICO,  Quick  Facts  (visited  Jan.  19,  2001)  <http://  www.  icoglobal.  net/  press/  facts/  indes.  html>. 


 254  Globalstar  Reports  Fourth  Quarter  and  Year-  End  Results,  News  Release,  Globalstar,  Apr.  2,  2001. 
 255  Andy  Pasztor,  Globalstar  Suspends  Payments  on  Debt,  Plans  to  Pursue  Strategic  Alternatives,  THE 
 WALL  STREET  JOURNAL,  Jan.  17,  2001,  at  A-  16;  Amy  Hellickson,  Globalstar  Shares  Plunge  as  Customers  Fall 
 Short,  BLOOMBERG,  Oct.  13,  2000;  Satellite  communications:  Lost  in  space,  THE  ECONOMIST,  Nov.  4,  2000. 
 Analysts  predictions  about  Globalstars  break-  even  point  vary  slightly.  William  Kidd,  an  analyst  with  C.  E. 
 Unterberg,  Towbin,  says  770,000  customers  are  needed,  while  Marc  Nabi,  an  analyst  with  Merrill  Lynch,  claims 
 the  break-  even  point  is  1.  6  million  customers. 


 256  Globalstar  USA  To  The  Rescue  Of  Iridium  Customers  Left  Holding  The  Phone:  Distributors  Offer  Trade-in 
 Rebates  for  Iridium  Phones,  News  Release,  Globalstar,  Mar.  16,  2000;  Globalstar  Slashes  Airtime,  Hardware 
 Costs,  WIRELESSNOW,  Mar.  27,  2000;  Spring  Forward  With  Globalstar  USA:  Limited  Promotional  Rates; 
 Introducing  Beyond  50  Minute  Plan,  News  Release,  Globalstar,  Mar.  31,  2000;  Globalstar  Discounts  U.  S.  Prices, 
 WIRELESSNOW,  Jul.  17,  2000;  Globalstar  USA  Announces  Time  or  Money  Promotion,  News  Release,  Globalstar, 
 Oct.  16,  2000. 


 257  Peter  H.  Lewis,  E-  Mail  At  Full  Sail,  Via  Satellite  Phone  And  Laptop,  FORTUNE  MAGAZINE,  Jan.  22,  2001, 
 available  in  2001  WL  2172246. 
 258  Globalstar,  Globalstar  Pricing  and  Promotions  (visited  Jan.  18,  2001) 
 <http://  www.  globalstarusa.  com/  pricing>. 
 259  Globalstar,  Globalstar  USA  :  Our  Distributors  (visited  Jan.  18,  2001) 
 <http://  www.  globalstarusa.  com/  dealer>. 
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 repay  a  $250  million  loan,  forcing  guarantor  Lockheed  Martin  Corporation  to  make  the  debt  payment.  260 
 In  September,  Globalstar  received  a  $56  million  equity  investment  followed  by  $105  million  in  a  stock 
 purchase  plan  with  Bear,  Stearns  International  Ltd.  (  Bear  Stearns).  261  Despite  these  new  funds  from 
 Bear  Stearns,  Globalstar  suspended  its  debt  payments  in  January  2001.  262 


 Inmarsat  Inmarsat,  offers  mobile  communications  services  including  telephony,  telex,  fax,  electronic  mail, 
 position  reporting  and  disaster  communications.  263  They  are  currently  authorized  to  provide  some  types  of 
 international  telephony  service  to  and  from  the  U.  S.  and  to  provide  maritime  mobile  service,  although  they 
 are  not  currently  authorized  to  provide  domestic  U.  S.  telephony  service.  An  application  to  do  so  is  pending 
 before  the  Federal  Communications  Commission. 


 Motient  Motient,  formally  known  as  American  Mobile  Satellite  Corporation,  was  founded  in  1988. 
 Among  other  services,  Motient  currently  offers  satellite  telephone  data  and  fax  service  and  satellite  dispatch 
 services.  264  TMI  Communications,  located  in  Ottawa,  Canada  and  Motient  have  announced  their  intent  to 
 merge  and  create  a  new  entity  named  Mobile  Satellite  Ventures.  265  Although  TMI  is  a  Canadian  company, 
 it  has  received  two  blanket  earth  station  licenses  from  the  FCC  to  provide  service  to  mobile  terminals 
 located  in  the  United  States.  As  part  of  their  application  to  the  FCC  to  authorize  the  transfer  related  to  the 
 merger,  the  applicants  have  requested  authority  to  operate  terrestrial  base  stations  in  the  same  band  as  their 
 satellite  service.  266 


 260  Bruce  Branch,  $250  Million  Repaid:  Lockheed  Martin  Forced  to  Pay  Globalstar  Loan  Guarantee, 
 COMMUNICATIONS  DAILY,  Jul.  5,  2000,  available  in  2000  WL  4695709.  In  August,  Merrill  Lynch  released  a  report 
 warning  that  Globalstar  could  face  liquidity  issues  in  the  first  half  of  2001.  Marc  E.  Nabi,  et  al.,  Globalstar 
 Telecommunications  Ltd.,  Merrill  Lynch,  Aug.  1,  2000,  at  5. 


 261  Michael  Rapoport,  Globalstar-  Bear  Stearns  Deal  Still  Puzzles,  DOW  JONES  NEWSWIRES,  Oct.  13,  2000. 


 262  Globalstar  Telecommunications  Ltd.,  SEC  Form  8-  K,  Jan.  16,  2001.  The  company  has  $195  million  in 
 cash  left  for  operations.  Some  analysts  believe  the  company  will  soon  declare  bankruptcy,  following  the  paths  of 
 Iridium  and  ICO.  William  Kidd,  et  al.,  Satellite  Communications  2001  Outlook  &  Investment  Guide:  Fluid  Times 
 Require  Long-  Term  Direction,  C.  E.  Unterberg,  Towbin,  Jan.  22,  2001,  at  121;  William  Kidd,  et  al.,  Globalstar 
 Defaults  on  Debt  Payments  and  Looks  to  Restructure,  Satellites,  C.  E.  Unterberg,  Towbin,  Jan.  16,  2001;  Bruce 
 Branch,  Globalstar  Reorganizes  Finances  by  Suspending  Payments,  COMMUNICATIONS  DAILY,  Jan.  17,  2001; 
 Andy  Pasztor  and  Jeff  Cole,  Loral  Chief  Bernard  Schwartz  Seeks  One  More  Feat:  Salvaging  Globalstar,  THE 
 WALL  STREET  JOURNAL,  Jan.  26,  2001  (  Globalstar  is  surviving  on  the  kindness  of  others  because  bondholders 
 could  push  it  into  bankruptcy  proceedings  at  any  time,  [Bernard  Schwartz]  notes.). 


 263  Robert  B.  Kaimowitz,  et  al.,  The  Satellite  Communications  Industry,  Efficient  Infrastructure  2000,  ING 
 Barings,  Mar.  2000  at  127.  Inmarsat,  Inmarsat  Homepage  (visited  May  29,  2001) 
 <http://  www.  inmarsat.  com/  welcome.  html>. 


 264  Motient,  Products  and  Services  (visited  May  29,  2001) 


 <http://  www.  motient.  com/  Content/  Products_  Services/  products_  services.  htm>. 
 265  William  Kidd,  et  al.,  Hotbird,  C.  E.  Unterberg,  Towbin,  Mar.  12,  2001  at  40. 


 266  Application  filed  by  Motient  Services  Inc.  and  Mobile  Satellite  Ventures  Subsidiary  LLC  for  Assignment 
 of  Licenses  and  Authority  to  Launch  and  Operate  a  Next-  Generation  Mobile  Satellite  Service  System  (March  1, 
 2001). 
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 3.  International  Developments 
 a.  Foreign  Investment  in  U.  S.  Mobile  Operators 
 U.  S.  mobile  telecommunications  companies  continued  to  form  alliances  with  their  foreign  counterparts 
 during  2000.  In  a  series  of  transactions  completed  in  the  first  half  of  2000,  Bell  Atlantic  Corp.,  GTE 
 Corp.,  and  Vodafone  combined  their  cellular  and  broadband  PCS  licenses  into  a  single  company,  Verizon 
 Wireless.  267  Verizon  (the  company  resulting  from  the  combination  of  Bell  Atlantic  Corp.  and  GTE  Corp.) 
 owns  55  percent  of  Verizon  Wireless,  and  Vodafone  owns  45  percent.  268  In  July  2000,  Germanys 
 Deutsche  Telekom  announced  an  agreement  to  acquire  VoiceStream.  269  Also,  in  August  2000,  Deutsche 
 Telekom  and  Powertel  entered  into  a  separate  agreement  for  Deutsche  Telekom  to  acquire  Powertel.  270  The 
 mergers  closed  on  May  31,  2001,  following  the  Commissions  approval  of  the  parties  request  to  transfer 
 control  of  licenses  and  authorizations  held  by  VoiceStream  and  Powertel  to  Deutsche  Telekom.  271 


 Another  notable  foreign  entry  into  the  U.  S.  mobile  market  in  2000  was  the  acquisition  by  Japans  NTT 
 DoCoMo,  Inc.  (  NTT  DoCoMo)  of  an  approximate  16  percent  stake  in  AT&  T  Wireless.  272  NTT 
 DoCoMos  investment  in  AT&  T  Wireless  cemented  the  formation  of  a  strategic  alliance  to  develop  the  next 
 generation  of  mobile  multimedia  services  on  a  global-  standard,  high-  speed  wireless  network.  NTT 
 DoCoMo  is  the  largest  mobile  service  provider  in  Japan,  with  over  50  percent  of  the  mobile  market. 
 DoCoMos  i-  mode,  a  wireless  data  service  launched  in  February  1999,  had  attracted  21.7  million 
 subscribers,  or  more  than  18  percent  of  the  population,  as  of  March  30,  2001.  273 


 b.  U.  S.  Investment  in  Foreign  Mobile  Operators 
 U.  S.  mobile  telephone  operators  started  the  year  2000  with  a  large  portfolio  of  investments  in  foreign 
 mobile  telephone  companies.  274  While  this  portfolio  remains  largely  intact,  a  few  foreign  holdings  were 
 divested  in  the  course  of  the  year.  For  example,  SBC  reached  agreements  in  2000  to  sell  off  its  ownership 


 267  See  Fifth  Report,  at  17670. 
 268  Id. 
 269  Id.,  at  17671. 
 270  Applications  of  VoiceStream  Wireless  Corporation,  Powertel,  Inc.,  and  Deutsche  Telekom  AG,  for 
 Consent  to  Transfer  Control  of  Licenses  and  Authorizations,  Memorandum  Opinion  And  Order,  FCC  01-  142  (rel. 
 Apr.  27,  2001),  at  10. 


 271  FCC  Approves  Deutsche  Telekom/  VoiceStream/  Powertel  Request  to  Transfer  Control  of  Licenses,  News 


 Release,  Federal  Communications  Commission,  Apr.  25,  2001;  Deutsche  Telekom  Completes  Acquisitions  of 
 VoiceStream  Wireless  Corporation  and  Powertel,  Inc.  and  Reports  Merger  Considerations,  News  Release, 
 Deutsche  Telekom,  May  31,  2001. 


 272  AT&  T  and  NTT  DoCoMo  Announce  Strategic  Wireless  Alliance,  News  Release,  AT&  T,  Nov.  30,  2000; 


 AT&  T  Wireless  and  NTT  DoCoMo  Commence  Strategic  Wireless  Alliance,  News  Release,  AT&  T,  Jan.  22,  2001. 
 273  NTT  DoCoMo,  Increase  of  Subscriber  Number  of  iMode  (visited  May  15,  2001) 


 <http://  www.  nttdocomo.  com/  i/  i_  m_  scr..  html>. 
 274  See  Appendix  C,  Table  10,  at  C-  9,  for  a  summary  of  U.  S.  operators  foreign  holdings. 
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 stakes  in  Swiss  mobile  operator  diAx  and  Norwegian  mobile  operator  NetCom.  275 
 In  addition,  following  NTT  DoCoMos  acquisition  of  a  minority  stake  in  AT&  T  Wireless,  AT&  T  agreed 
 to  divest  its  10  percent  interest  in  Japan  Telecom  by  selling  this  interest  to  UK-  based  mobile  operator 
 Vodafone.  276  Japan  Telecom  is  the  principal  shareholder  (54  percent)  in  J-  Phone,  which  as  Japans  third 
 largest  mobile  service  provider  competes  directly  with  NTT  DoCoMo.  AT&  Ts  10  percent  stake  in  Japan 
 Telecom  had  been  part  of  a  30  percent  interest  that  AT&  T  held  jointly  with  its  global  joint  venture  partner 
 British  Telecommunications. 


 The  3G  licensing  process  in  Europe  afforded  new  opportunities  for  U.  S.  mobile  telecommunications 
 companies  to  gain  entry  to  the  European  mobile  market  in  2000.  To  date,  thirteen  countries  in  Western 
 Europe  have  awarded  licenses  for  3G  services.  In  order  to  ensure  that  one  or  more  new  operators  enter  the 
 market,  the  majority  of  Western  European  countries  (including  the  United  Kingdom,  Germany,  Italy, 
 Austria,  Spain,  Switzerland,  Norway,  Sweden,  and  Portugal)  have  awarded  at  least  one  more  license  than 
 the  number  of  incumbent  mobile  operators. 


 Despite  the  opportunities  afforded  to  new  entrants,  U.  S.  telecommunications  companies  without  ownership 
 stakes  in  incumbent  European  mobile  operators  participated  only  to  a  limited  extent  in  3G  licensing  in 
 Europe  and  were  unsuccessful  in  winning  licenses  in  the  European  3G  markets  in  which  they  did  compete. 
 For  example,  WorldCom  Wireless  (UK)  Limited  (  WorldCom  UK),  a  wholly  owned  subsidiary  of 
 WorldCom,  was  one  of  nine  new  entrants  and  thirteen  companies  in  total  to  bid  for  the  five  3G  licenses 
 offered  for  auction  in  the  United  Kingdom.  However,  intense  competition  drove  license  prices  to  record-breaking 
 levels,  causing  WorldCom  UK  to  drop  out  before  the  auction  concluded.  Subsequently,  both 
 WorldCom  and  Talkline,  a  joint  venture  of  SBC  and  TeleDanmark,  withdrew  from  participation  in  the 
 German  3G  auction  partly  to  avoid  a  repetition  of  the  intense  bidding  competition  and  high  license  prices 
 generated  by  the  British  auction.  While  bidding  competition  and  license  prices  were  much  lower  in  the 
 remaining  European  3G  auctions,  U.  S.  companies  made  no  attempt  to  participate  in  these  auctions  as  new 
 entrants. 


 Only  U.  S.  companies  with  ownership  stakes  in  incumbent  European  mobile  operators  have  succeeded  so 
 far  in  winning  pieces  of  the  new  3G  licenses  awarded  by  European  governments.  Winners  of  3G  licenses 
 with  equity  participation  by  U.  S.  companies  include  E-  Plus  Hutchison  in  Germany  (BellSouth  has  a  22.  5 
 percent  ownership  interest  in  venture  partner  E-  Plus),  Omnitel  in  Italy  (Verizon  has  a  23.  1  percent 
 interest),  and  Belgacom  Mobile  in  Belgium  (SBC  owns  17.  5  percent  of  Belgacom  S.  A.).  In  addition,  SBC 
 indirectly  owns  portions  of  3G  license  winners  3G  Blue  in  the  Netherlands,  dSpeed  in  Switzerland,  and 
 Connect  Austria  through  its  ownership  stakes  in  TeleDanmark  (41.  6  percent)  and  Belgacom  S.  A.  (17.  5 
 percent).  Both  Belgacom  and  TeleDanmark  are  partners  in  a  joint  venture  (with  Deutsche  Telekom  and 
 Dutch  incumbent  Ben)  that  owns  3G  Blue,  while  TeleDanmark  owns  a  controlling  stake  in  dSpeed  and  is  a 
 partner  in  a  consortium  (with  Viag  Interkom,  Orange,  and  Telenor)  that  owns  Connect  Austria. 


 U.  S.  companies  have  been  more  successful  in  expanding  their  presence  in  South  America  than  in  Europe. 


 275  Emily  Bourne,  Bidders  Line  Up  for  Norwegian  3G  Licenses,  TOTAL  TELECOM,  Aug.  14,  2000;  Anne 
 Young,  Swiss  UMTS  Auction  is  Postponed  as  Five  Become  Four,  TOTAL  TELECOM,  Nov.  13,  2000. 
 276  Thorold  Barker,  Vodafone  Pays  $1.35bn  to  Up  Japan  Telecom  Stake,  FINANCIAL  TIMES,  Feb.  26,  2001; 


 Vodafone  Set  to  Expand  Japan  Stake-  AT&  T  to  Sell  10  percent  of  Japan  Telecom  in  $1.35  Billion  Deal,  THE  WALL 
 STREET  JOURNAL,  Feb.  26,  2001,  at  A14;  Richard  Waters,  Vodafone  Eyes  Japan  Stake,  FINANCIAL  TIMES,  Feb.  25, 
 2001. 
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 For  example,  in  February  2001  Swedish  operator  Telia  and  Telecom  Americas  -  a  consortium  of  SBC 
 (11.4  percent),  Bell  Canada  International  (44.3  percent),  and  America  Movil  (44.3  percent)  -  reached  an 
 agreement  in  principle  whereby  Telia  will  sell  its  financial  interests  in  Brazilian  mobile  operator  Tess  S.  A. 
 (  Tess)  to  Telecom  Americas.  277  Acquisition  of  Tess,  which  holds  a  regional  PCS  license  for  Sao  Paulo 
 interior,  will  expand  Telecom  Americas  footprint  in  Brazil,  where  its  holdings  include  Algar  Telecom 
 Leste,  a  Rio  de  Janeiro  mobile  operator  in  which  SBC  and  Telmex  jointly  own  a  25  percent  stake.  Some 
 analysts  have  predicted  that  Telecom  Americas  will  likely  merge  its  Brazilian  mobile  assets  with  those  of 
 BellSouth,  which  currently  operates  PCS  networks  in  metropolitan  Sao  Paulo  and  a  group  of  northeastern 
 states.  278 


 c.  International  Comparisons 
 As  in  1999,  rapid  growth  of  mobile  subscribership  in  the  mobile  telephone  markets  of  Western  European 
 countries  continued  in  the  year  2000.  With  the  addition  of  approximately  90  million  new  subscribers,  the 
 number  of  mobile  subscribers  in  Western  Europe  grew  by  58  percent  to  nearly  245  million  in  2000.  279 
 Mobile  penetration  in  Western  Europe  averaged  62.5  percent  as  of  December  31,  2000,  up  from  40  percent 
 at  the  end  of  1999.  280 


 Differences  in  the  penetration  rates  of  individual  countries  narrowed  slightly  as  mobile  subscribership 
 tended  to  grow  more  rapidly  in  countries  with  below-  average  penetration  rates  than  in  countries  that  had 
 already  achieved  the  worlds  highest  penetration  rates.  At  the  end  of  1999,  for  example,  Finland  had 
 Europes  (and  the  worlds)  highest  penetration  rate  at  65  percent,  while  Germanys  28  percent  penetration 
 rate  was  the  lowest  in  Western  Europe.  281  By  the  end  of  2000,  Germanys  penetration  rate  had  climbed  by 
 more  than  30  percentage  points  to  58.1  percent,  the  largest  penetration  gain  in  Western  Europe  for  the  year.  282  In  contrast,  Finland  had  the  smallest  penetration  gain  (7.  5  percent)  in  Western  Europe  during 


 2000,  giving  it  an  end-  year  penetration  rate  of  nearly  73  percent.  283  Norway  overtook  Finland  as  the 
 Western  European  country  with  the  highest  penetration  rate  in  2000  (81.2  percent),  while  France  had  the 
 lowest  penetration  rate  (50  percent).  284  Thus,  the  ratio  between  the  highest  and  the  lowest  penetration  rate 
 in  Western  Europe  was  approximately  1.6  (81:  50)  at  the  end  of  2000,  down  from  approximately  2.3 
 (65:  28)  at  the  end  of  1999. 


 The  addition  of  prepaid  subscriptions  appears  to  have  been  the  major  driver  of  mobile  subscriber  growth  in 


 277  Telia  to  Sell  Mobile  Operator  Tess  (Brazil)  to  Telecom  Americas,  News  Release,  Telia,  Feb.  13,  2001. 
 278  Jonathan  Karp,  Wireless  Rivals  Rewire  Things  in  Brazil,  THE  WALL  STREET  JOURNAL,  Jan.  25,  2001,  at 
 A14. 
 279  John  Jensen,  et  al.,  Mobile  Matters,  Equity  Research,  J.  P.  Morgan  Securities,  Mar.  2001,  at  6. 


 280  Fanos  Hira,  et  al.,  The  Cellular  Review,  Equity  Research,  Bear  Stearns,  Feb.  2001,  at  21.  The  average 
 penetration  rate  for  the  end  of  1999  is  taken  from  the  Fifth  Report,  at  17684. 
 281  Fifth  Report,  at  17684. 


 282  Fanos  Hira,  et  al.,  The  Cellular  Review,  Equity  Research,  Bear  Stearns,  Feb.  2001,  at  21-  22. 
 283  Id. 
 284  Id. 
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 Western  Europe  in  2000.  Prepaid  users  accounted  for  an  estimated  79  percent  of  new  subscribers  in 
 Western  Europe  in  2000,  and  as  of  September  2000  represented  58  percent  of  all  Western  European  mobile 
 phone  users,  up  from  51  percent  at  the  end  of  1999.  285  The  market  share  of  prepaid  users  in  individual 
 countries  varies  widely,  ranging  from  a  high  of  84  percent  of  all  users  in  Italy  to  a  low  of  34  percent  in 
 Switzerland  as  of  September  2000.  286  Germanys  mobile  boom  in  2000  was  heavily  driven  by  growth  in 
 prepaid  subscribers,  with  the  share  of  prepaid  subscribers  in  the  total  subscriber  base  rising  from  22 
 percent  at  the  end  of  1999  to  45  percent  in  September  2000.  287  In  contrast,  France,  with  the  lowest  mobile 
 penetration  rate,  had  a  relatively  low  share  of  prepaid  subscribers,  estimated  at  43  percent  as  of  September 
 2000.  288  In  addition,  prepaid  subscribers  have  never  been  a  particularly  important  driver  of  mobile 
 subscriber  growth  in  Finland  because  of  low  fees  for  contract  subscribers.  289 


 The  growing  importance  of  prepaid  users  in  European  mobile  subscriber  growth  is  linked  to  recent  reports 
 casting  doubt  on  the  reliability  of  industry  subscriber  figures  for  Western  Europe.  Because  prepaid  phones 
 do  not  require  customers  to  sign  monthly  contracts  or  make  monthly  payments,  prepaid  users  are  difficult 
 for  operators  to  track.  Reports  suggest  that  industry  subscriber  figures  may  contain  a  certain  level  of 
 double  counting  due  in  part  to  the  large  number  of  mobile  phones  purchased  by  prepaid  users  simply  to 
 replace  existing  handsets  and  to  take  advantage  of  handset  subsidies.  290  Carphone  Warehouse,  Europes 
 largest  mobile  phone  retailer,  estimates  that  as  many  as  75  percent  of  phones  purchased  recently  in  its 
 London  stores  represent  replacements  rather  than  new  customers.  291 


 Operators  try  to  adjust  their  subscriber  totals  to  allow  for  customer  upgrades  by  excluding  handsets  not 
 used  for  a  certain  period,  but  there  is  no  agreed  standard  among  operators  regarding  the  period  of  time  to 
 use.  In  the  United  Kingdom,  Orange,  France  Telecoms  UK  subsidiary,  excludes  prepaid  customers  after 
 three  months  of  inactivity.  292  In  March  2001  the  UKs  Vodafone  announced  plans  to  follow  Orange  by 
 ignoring  any  customers  who  had  not  used  their  phones  for  more  than  three  months.  293  However,  BT  Cellnet 
 counts  customers  who  have  not  used  their  phones  for  up  to  six  months,  and  One2One,  the  UK  subsidiary  of 
 Germanys  Deutsche  Telekom,  counts  customers  even  if  they  have  not  made  a  call  for  a  year.  294  Mobile 
 phone  retailers  believe  that  even  a  three-  month  cut  off  period  is  too  generous  because  few  new  users  are 
 likely  to  remain  silent  for  more  than  a  few  weeks.  295 


 285  John  Jensen,  et  al.,  Mobile  Matters,  Equity  Research,  J.  P.  Morgan  Securities,  Mar.  2001,  at  9. 


 286  Id.,  at  10. 
 287  Id. 
 288  Id. 
 289  Id. 
 290  Dan  Roberts,  UK  Mobile  Users  Overstated,  FINANCIAL  TIMES,  Apr.  16,  2001;  Reuters  staff,  Vodafone 
 Says  Figures  Overstate  Mobile  Ownership,  TOTAL  TELECOM,  Mar.  14,  2001. 
 291  Dan  Roberts,  Carphone  Contests  Mobile  Phone  Growth  Rates,  FINANCIAL  TIMES,  Apr.  8,  2001. 


 292  Id. 
 293  Dan  Roberts,  UK  Mobile  Users  Overstated,  FINANCIAL  TIMES,  Apr.  16,  2001. 
 294  Dan  Roberts,  Carphone  Contests  Mobile  Phone  Growth  Rates,  FINANCIAL  TIMES,  Apr.  8,  2001. 
 295  Id. 
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 Estimates  of  the  level  of  double  counting  vary.  Vodafone  initially  estimated  that  its  total  UK  subscriber 
 figures  might  fall  by  around  nine  percent  as  a  result  of  its  decision  to  exclude  any  customers  who  had  not 
 used  their  phones  for  more  than  three  months.  296  Subsequently,  Vodafone  released  figures  that  showed 
 inactivity  levels  of  12  percent  in  the  UK,  13  percent  in  Germany,  and  7  percent  in  Italy.  297  However, 
 independent  research  on  mobile  phone  use  in  the  UK  suggests  that  industry  subscriber  figures  may 
 overstate  the  number  of  mobile  subscribers  by  as  much  as  25  percent.  298  Based  on  a  poll  of  4,000  people 
 conducted  in  December  2000,  the  Gartner  Group  estimated  that  only  30  million  residents,  or  63  percent  of 
 adults,  used  mobile  phones  in  the  UK.  299  In  contrast,  industry  figures  showed  there  were  more  than  40 
 million  active  users  in  the  UK  at  that  time,  equivalent  to  90  percent  of  adults. 


 The  Fifth  Report  observed  that  the  most  prominent  difference  between  the  U.  S.  and  Western  European 
 mobile  telephone  markets  is  that  Western  European  markets  are  achieving  greater  penetration  levels  and 
 higher  average  penetration  growth  than  the  U.  S.  market.  300  Despite  rapid  growth  in  U.  S.  mobile 
 subscribership  in  the  intervening  period,  the  Western  European  markets  continued  to  achieve  greater  mobile 
 penetration  levels  than  the  U.  S.  in  the  year  2000,  and  by  a  wider  margin  than  at  the  end  of  1999.  As  noted 
 previously,  the  United  States  finished  the  year  2000  with  a  mobile  penetration  level  of  approximately  39 
 percent,  as  compared  with  the  Western  European  average  of  62.  5  percent.  The  ratio  of  the  average 
 Western  European  mobile  penetration  level  to  the  U.  S.  penetration  level  was  1.6  at  the  end  of  2000,  up 
 from  1.25  at  the  end  of  1999.  While  two  of  the  Western  European  countries,  Germany  and  Belgium,  had 
 lower  penetration  levels  than  the  United  States  at  the  end  of  1999,  both  Germany  and  Belgium,  along  with 
 all  other  Western  European  countries,  finished  the  year  2000  with  higher  penetration  levels  than  the  United 
 States. 


 The  mobile  telephone  markets  of  advanced  industrialized  countries  in  the  Asian-  Pacific  region  are  also 
 achieving  greater  penetration  levels  than  the  U.  S.,  but  the  difference  is  not  as  significant.  At  the  end  of 
 2000,  Japan  had  a  mobile  penetration  rate  of  45.7  percent,  up  from  37  percent  at  the  end  of  1999.  301 
 Australia  and  New  Zealand  finished  the  year  2000  with  penetration  rates  of  53.3  percent  and  51.4  percent, 
 respectively.  302  Thus,  even  compared  with  the  Asian-  Pacific  mobile  telephone  markets,  the  mobile 
 penetration  levels  achieved  in  Western  Europe  appear  to  be  relatively  high. 


 Given  current  penetration  levels,  analysts  predict  that  subscriber  growth  will  slow  in  Western  Europe 
 during  2001  and  2002.  One  group  of  analysts  projects  subscriber  growth  in  Western  Europe  to  decelerate 
 to  20  percent  in  2001  and  11  percent  in  2002,  with  only  around  50  million  new  subscribers  in  2001.  303 


 296  Dan  Roberts,  User  Figures  Haunt  Vodafone,  FINANCIAL  TIMES,  Apr.  17,  2001;  Reuters  staff,  Vodafone 
 Says  Figures  Overstate  Mobile  Ownership,  TOTAL  TELECOM,  Mar.  14,  2001. 
 297  FT.  com  staff,  Vodafone  Users  Spend  Less,  FINANCIAL  TIMES,  Apr.  25,  2001. 


 298  Dan  Roberts,  UK  Mobile  Users  Overstated,  FINANCIAL  TIMES,  Apr.  16,  2001. 
 299  Id. 
 300  See  Fifth  Report,  at  17683. 
 301  Cellular  Telephone  Subscription  by  Country,  ASIACOM,  Mar.  6,  2001,  at  7. 
 302  Id. 
 303  John  Jensen,  et  al.,  Mobile  Matters,  Equity  Research,  J.  P.  Morgan  Securities,  Mar.  2001,  at  13. 
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 This  projected  slowdown  in  European  mobile  subscriber  growth,  together  with  continued  steady,  or 
 possibly  even  accelerated,  U.  S.  mobile  subscriber  growth  during  this  period,  is  expected  to  narrow  the 
 difference  between  penetration  levels  in  the  U.  S.  and  Western  Europe.  304 


 Already  there  have  been  signs  that  this  predicted  slowdown  was  starting  to  occur  in  the  first  half  of  2001. 
 The  UKs  Vodafone,  the  worlds  largest  mobile  operator,  reported  a  sharp  slowdown  in  subscriber  growth 
 figures  for  the  first  quarter  of  2001,  particularly  in  Germany  and  Italy,  which  previously  had  been  among 
 its  strongest  markets.  305  In  Germany,  Vodafones  subsidiary  added  1.  6  million  subscribers  in  the  first 
 quarter  of  2001,  compared  with  about  2.7  million  in  each  of  the  three  previous  quarters.  306 


 Based  on  forecasts  of  average  MOUs  for  the  end  of  2000,  the  Fifth  Report  further  observed  that  U.  S. 
 subscribers  are  using  their  mobile  phones  more  intensively  than  European  subscribers.  307  This  conclusion 
 has  been  validated  by  actual  estimates  of  MOUs  for  the  end  of  2000.  According  to  one  such  estimate, 
 average  MOUs  in  Western  Europe  dropped  to  140  minutes  per  subscriber  per  month  in  2000,  down  2 
 percent  from  144  minutes  in  1999.  308  This  compares  with  a  range  of  estimates  of  MOUs  in  the  U.  S.  during 
 2000  that  taken  together  average  303  minutes  per  subscriber  per  month.  309  Because  prepaid  subscribers 
 tend  to  use  their  mobile  phones  much  less  than  contract  customers,  the  relatively  high  share  of  prepaid 
 users  in  the  Western  European  subscriber  base  pulls  down  estimates  of  average  mobile  usage.  Thus,  mobile 
 phone  usage  by  contract  customers  in  Western  Europe  averages  209  minutes  per  month,  whereas  prepaid 
 users  talk  for  only  59  minutes  per  month  on  average.  310  In  the  United  Kingdom,  operator  Oranges  bucket 
 plans  encourage  its  contract  customers  to  use  their  mobile  phones  for  an  estimated  303  minutes  per  month, 
 as  compared  with  an  average  of  68  minutes  per  month  for  UK  Oranges  prepaid  subscribers.  311 


 While  a  higher  percentage  of  the  population  in  Western  Europe  and  Japan  currently  subscribes  to  mobile 
 telephone  service,  estimates  of  the  cost  of  a  basket  of  mobile  services  suggest  that  certain  classes  of  users 
 may  be  paying  less  for  mobile  telephone  service  in  the  United  States.  Using  a  methodology  that  has  been 
 approved  by  the  Organization  for  Economic  Cooperation  and  Development  (  OECD)  as  the  official 
 OECD  basket  methodology,  Teligen  has  developed  a  pair  of  baskets  representing  two  usage  profiles,  one 
 for  business  users  and  the  other  for  residential  users  (personal  use).  312  The  business  basket  has  a  much 
 higher  call  volume  than  the  residential  basket,  among  other  differences.  The  prices  for  each  basket  are  taken 


 304  John  M.  Bensche,  et  al.,  U.  S.  Spectrum  Auction  Guide,  Equity  Research,  Lehman  Brothers,  Feb.  14,  2001, 
 at  6,  8. 
 305  Dan  Roberts,  Vodafone  Signals  Saturation,  FINANCIAL  TIMES,  Apr.  5,  2001. 


 306  Id. 
 307  Fifth  Report,  at  17684. 
 308  John  Jensen,  et  al.,  Mobile  Matters,  Equity  Research,  J.  P.  Morgan  Securities,  Mar.  2001,  at  22.  This 
 estimate  of  average  MOUs  in  Western  Europe  includes  only  voice  and  not  SMS  or  other  mobile  data  services.  Id. 
 309  See  Section  II.  A.  1.b(  ii),  Minutes-  of-  Use,  supra. 


 310  Fanos  Hira,  et  al.,  Orange,  Equity  Research,  Bear  Stearns,  Apr.  26,  2001,  at  17. 
 311  Id. 
 312  T-  Basket    Telecommunications  Cost  Indicators  Using  the  OECD  Basket  Methodology,  Teligen  Limited, 
 Feb.  2001. 
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 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.  313  Based  on  prices  as  of  February  1,  2001,  Teligens 
 business  basket  estimates  show  that  the  cost  of  mobile  service  to  business  users  in  the  United  States  is  well 
 below  the  average  for  Western  Europe.  314  However,  Teligens  residential  basket  estimates  suggest  that  the 
 cost  of  mobile  service  for  personal  use  in  the  United  States  during  the  same  time  period  is  above  the 
 Western  European  average.  315 


 The  World  Bank  has  likewise  built  models  for  the  purpose  of  comparing  the  price  of  wireless 
 communications  services  in  the  United  States,  Europe,  and  emerging  markets.  The  comparisons  are  limited 
 to  a  selection  of  highly  competitive  local  markets,  mainly  very  large  or  capital  cities  such  as  London, 
 Milan,  New  York,  and  Washington.  The  models  are  based  on  the  assumption  that  the  customer  always 
 chooses  the  best  (least-  cost)  pricing  scheme  for  a  certain  bundle  of  minutes.  For  example,  one  model  takes 
 a  selection  of  U.  S.  and  international  wireless  operators  and  calculates  how  much  increments  of  10  minutes 
 of  use  would  cost  a  subscriber  to  each  of  the  operators  over  a  wide  range  of  minutes  of  use  per  month.  The 
 results  of  the  World  Banks  models  show  that  U.  S.  wireless  providers  are  the  cheapest  for  virtually  every 
 class  of  user  (more  than  90  percent  of  the  user  classes  selected),  rather  than  just  business  users.  316 


 313  Some  countries,  including  the  United  States,  are  represented  by  two  residential  and  business  baskets 
 apiece,  each  basket  corresponding  to  a  different  operators  calling  plan.  In  the  case  of  the  United  States,  Teligen 
 uses  prices  from  Sprint  PCS  Free  &  Clear  180  Plan  and  Qwests  Standard  150  plan.  In  addition,  while  most  of 
 the  calling  plans  for  other  countries  include  rates  for  local,  national,  and  international  service,  the  rates  for  the  two 
 U.  S.  calling  plans  are  valid  for  local  service  in  the  Washington,  D.  C.  (Sprint  PCS)  and  the  Denver,  Colorado 
 (Qwest)  areas  only. 


 314  Id. 


 315  Id. 
 316  Conversations  with  Carlo  Maria  Rossotto,  Regulatory  Economist,  World  Bank  (Jan.  30,  2001  and  Feb.  9, 
 2001). 
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 B.  Mobile  Data 
 1.  Introduction 
 a.  Domestic  Developments 
 Mobile  data  service  is  the  delivery  of  non-  voice  information  to  a  mobile  device.  Mobile  data  service 
 includes  everything  from  paging  messages  to  web  access  on  a  mobile  phone  to  e-  mail  delivery.  This  report 
 divides  current  mobile  data  offerings  into  four  categories  or  sub-  sectors,  all  of  which  are  discussed  below. 
 The  first  category  is  traditional  one-  way  paging  and  advanced  messaging  services  offered  by 
 paging/  messaging  carriers  using  paging  and  narrowband  PCS  spectrum.  The  second  category  consists  of 
 mobile  data  services,  317  such  as  wireless  web,  318  e-  mail,  and  SMS,  319  provided  by  mobile  telephone 
 operators  using  cellular,  broadband  PCS,  and  SMR  spectrum.  The  third  category  is  data  services  offered 
 over  handheld  PDA  320  devices  with  a  mobile  Internet  connection,  either  through  a  built-  in  wireless  modem 
 or  with  the  attachment  of  a  wireless  modem  card,  an  advanced  messaging  device,  or  a  mobile  phone.  The 
 fourth  category  is  mobile  data  services  provided  by  dedicated  data  network  operators.  Currently,  there  are 
 three  major  companies  that  operate  dedicated  data  networks:  Motient  Corporation  (  Motient),  Cingular 
 Interactive,  Inc.  (  Cingular  Interactive,  formerly  BellSouth  Wireless  Data),  and  Metricom,  Inc. 
 (  Metricom).  These  three  companies  use  800  MHz,  900  MHz,  and  unlicensed  and  Wireless 
 Communications  Service  (  WCS)  spectrum,  respectively.  321 


 While  this  report  discusses  current  mobile  data  offerings  in  four  general  categories,  several  providers  and 
 technologies  bridge  the  various  sectors.  For  example,  Research  in  Motion  Limited  (  RIM)  manufactures 
 and  sells  handheld  PDA  devices  with  built-  in  wireless  modems  that  connect  to  the  Internet  over  Motients 
 and  Cingular  Interactives  dedicated  data  networks.  322  RIM  also  offers  a  wireless  e-  mail  access  service 
 called  BlackBerry,  which  is  co-  branded  and  resold  by  several  different  mobile  data  companies.  In  addition, 
 users  of  handheld  PDAs  made  by  Palm,  Inc.  (  Palm)  and  Handspring,  Inc.  (  Handspring)  can  access  the 
 Internet  while  mobile  by  attaching  their  devices  to  a  mobile  phone,  thereby  piggybacking  on  the  mobile 
 telephones  Internet  connection. 


 317  Unless  otherwise  noted,  throughout  Section  II.  B  mobile  Internet  access  in  relation  to  mobile  telephone 
 carriers  refers  to  Internet  access  on  mobile  telephone  handsets,  not  Internet  access  on  a  laptop  computer  connected 
 to  a  mobile  telephone. 


 318  Unless  otherwise  noted,  the  terms  wireless  web  and  mobile  web  are  used  throughout  Section  II.  B  to 
 mean  mobile  Internet  access  via  mobile  telephone  handsets. 
 319  SMS  provides  the  ability  to  send  and  receive  text  messages  to  and  from  mobile  handsets  with  message 


 length  ranging  from  120  to  256  characters.  See  note  440,  infra. 
 320  PDAs  are  handheld  devices  that  include  organizer  software,  such  as  an  appointment  calendar,  directory, 


 to-  do  list,  and  memo  pad,  and  that  can  be  connected  to  a  users  desktop  computer  to  ensure  that  the  data  on  both 
 devices  are  synchronized.  Many  PDAs  allow  users  to  download  additional  software,  and  some  PDAs  allow  users  to 
 attach  external  devices,  such  as  a  keyboard,  digital  camera,  location  device,  mobile  phone,  or  wireless  modem. 
 This  report  uses  the  terms  handheld,  PDA,  handheld  device,  handheld  PDA,  and  PDA  device 
 interchangeably  and  focuses  on  handheld  PDAs  with  a  wireless  Internet  connection. 


 321  See  Appendix  A  for  a  discussion  of  the  use  of  unlicensed  and  WCS  spectrum  for  fixed  wireless  services. 


 322  See  Section  II.  B.  2.  c(  ii),  RIM  Devices  and  BlackBerry  Service,  infra. 
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 In  addition  to  discussing  the  four  categories  of  current  mobile  data  offerings  mentioned  above,  the  report 
 examines  certain  developing  mobile  data  services  and  technologies,  including  WAP,  location-  based 
 services,  m-  commerce,  and  short-  range  data  transmissions.  These  technologies  and  services  are  starting  to 
 become  integrated  into  existing  mobile  data  products  and  have  the  potential  to  influence  greatly  the 
 evolution  of  the  mobile  data  industry.  The  mobile  data  section  concludes  with  a  discussion  of  wireless 
 telemetry  services. 


 The  mobile  data  industry  has  grown  substantially  since  the  writing  of  the  Fifth  Report.  As  of  the  summer 
 of  2000,  four  leading  mobile  telephone  carriers    Sprint  PCS,  AT&  T  Wireless,  Verizon  Wireless,  and 
 Nextel    had  launched  mobile  Internet  access  products.  By  the  end  of  2000,  these  four  carriers  had  nearly 
 2.  5  million  mobile  data  users  combined.  323  Three  additional  mobile  telephone  carriers,  VoiceStream, 
 ALLTEL,  and  Cingular  Wireless,  have  also  launched  their  own  mobile  Internet  access  services  since  the 
 writing  of  the  Fifth  Report.  324  During  2000,  paging/  messaging  carriers  also  continued  to  market  web-  based 
 products  on  advanced,  two-  way  devices.  PDA  manufacturers  began  offering  additional  handheld  devices 
 with  wireless  Internet  connectivity  and  expanded  their  Internet-  based  content  and  services.  In  addition, 
 Metricom  began  offering  Ricochet,  its  wireless  Internet  access  service  provided  by  modem  devices  attached 
 to  laptop  computers,  in  15  markets  during  2000.  325  Ricochet  gives  users  Internet  access  speeds  of  up  to 
 128  kbps  in  13  of  those  15  markets.  326 


 b.  International  Developments 
 While  mobile  data  products  are  gaining  popularity  in  the  United  States,  these  types  of  products  have  even 
 more  users  in  other  countries.  For  example,  in  Japan,  21.  7  million  people,  or  15  percent  of  the  population, 
 subscribed  to  NTT  DoCoMos  i-  mode  mobile  Internet  service  at  the  end  of  March  2001.  327  This 


 323  The  count  of  mobile  data  users  was  calculated  based  on  year-  end  company  news  releases,  and  estimates 
 for  companies  that  did  not  disclose  year-  end  2000  mobile  data  user  numbers.  Analysts  have  estimated  the  number 
 of  mobile  data  users  to  be  in  the  range  of  2  to  3  million  users.  The  Yankee  Group  estimates  there  were  more  than 
 2  million  wireless  data  users  at  the  end  of  2000.  See  Dan  Meyer,  Speed  Bumps  Limits  Of  Wireless  Web  Stifle  Early 
 Growth,  RCR  WIRELESS  NEWS,  Jan.  29,  2001,  at  16.  The  Strategis  Group  estimated  there  were  approximately  3 
 million  cellular/  PCS/  ESMR  mobile  data  subscribers  in  2000.  See  THE  STRATEGIS  GROUP,  U.  S.  Mobile  Data 
 Marketplace:  2001  (2001),  at  116  (  2001  Strategis  Mobile  Data  Report).  Because  some  mobile  telephone 
 carriers  offer  mobile  Internet  access  without  a  separate  subscription  beyond  voice  service,  the  term  users  is  used 
 instead  of  subscribers.  Mobile  telephone  carriers  generally  define  their  mobile  Internet  users  as  customers  who 
 have  connected  to  the  Internet  using  their  mobile  handsets  within  a  certain  period  of  time. 


 324  See  Section  II.  B.  2.  d(  iii),  Metricom,  infra. 


 325  Ricochet  wireless  modems,  as  well  as  Ricochet  monthly  Internet  service,  are  sold  by  Metricom.  Metricom 
 uses  the  900  MHz  and  2.4  GHz  unlicensed  bands,  as  well  as  WCS,  for  Ricochet.  See  Section  II.  B.  2.  d(  iii), 
 Metricom,  infra. 


 326  Internet  access  speeds  in  the  other  markets  are  approximately  28.  8  kbps.  See  Metricom,  Coverage  Maps 
 (visited  Feb.  19,  2001)  <http://  www.  metricom.  com/  about_  us/  coverage_  maps/  index.  html>;  Section  II.  B.  2.  d(  iii), 
 Metricom,  infra. 


 327  NTT  DoCoMo,  Increase  of  Subscriber  Number  of  i-  mode  (visited  May  15,  2001) 


 <http://  www.  nttdocomo.  com/  i/  inumber.  html>. 
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 represented  60  percent  of  DoCoMos  36  million  total  mobile  telephone  subscribers  328  and  was  a  245 
 percent  increase  from  the  5.  8  million  i-  mode  subscribers  in  March  2000.  329  In  Europe,  SMS  has  become 
 increasingly  popular.  In  December  2000,  mobile  telephone  users  in  the  United  Kingdom  sent  756  million 
 SMS  messages,  almost  triple  the  271  million  sent  in  December  1999.  330  In  Germany,  1.  8  billion  SMS 
 messages  were  sent  during  December  2000,  almost  four  times  the  500  million  sent  during  December  1999.  331  And  in  Finland,  90  percent  of  mobile  telephone  subscribers  use  SMS  and  send  a  total  of  over  75 


 million  messages  per  month.  332 


 c.  3G  Developments 
 As  explained  above,  Third  Generation,  or  3G,  generally  refers  to  high-  speed  advanced  mobile  services 
 and  the  next  generation  of  technologies    beyond  the  current  2G  technologies  of  CDMA,  TDMA,  GSM, 
 and  iDEN    that  will  make  such  services  possible.  The  Fifth  Report  discussed  in  depth  the  various  2.  5G 
 and  3G  technology  standards  in  development  and  which  of  these  technologies  mobile  telephone  carriers 
 would  likely  use  to  migrate  from  their  current  2G  technologies  in  order  to  offer  mobile  data  services  at 
 higher  speeds.  333  As  explained  above,  the  term  2.  5G  is  used  to  describe  the  interim  technologies  that 
 carriers  will  use  while  migrating  from  their  current  2G  technologies  to  3G  technologies. 


 Since  the  writing  of  the  Fifth  Report,  several  developments  have  occurred  on  the  road  to  3G.  During  2000 
 and  2001,  many  mobile  telephone  operators  in  the  United  States  made  announcements  regarding  the 
 deployment  of  2.  5G  and  3G  networks,  conducted  trials  of  2.  5G  and  3G  technologies,  and  signed  contracts 
 with  equipment  vendors.  334  However,  many  analysts  and  industry  players  believe  that  the  widespread 
 deployment  of  3G  networks  and  other  advanced  wireless  technologies  is  still  several  years  away,  given 
 certain  technological  and  economic  obstacles  yet  to  be  overcome.  335  As  discussed  below,  some  mobile 


 328  NTT  DoCoMo,  NTT  DoCoMos  Number  of  Subscribers  as  of  March,  2001  (visited  Apr.  30,  2001) 
 <http://  www.  nttdocomo.  com/  corporate/  ir/  index.  html>. 
 329  NTT  DoCoMo,  Increase  of  Subscriber  Number  of  i-  mode  (visited  Mar.  5,  2001) 
 <http://  www.  nttdocomo.  com/  i/  inumber.  html>. 
 330  3  Billion  G-  Mails  in  December  99  Short  Messages  Hit  the  Mark  for  Consumers,  News  Release,  GSM 
 Association,  Feb.  2,  2000;  More  Than  200  Billion  GSM  Text  Messages  Forecast  for  Full  Year  2001,  News  Release, 
 GSM  Association,  Feb.  12,  2001. 


 331  Id. 


 332  Steve  Gold,  More  Finns  Swap  Their  Fixed  Lines  for  Mobile  Phones,  NEWSBYTES  NEWS  NETWORK,  June  1, 
 2000,  available  in  2000  WL  21178000;  Peter  H.  Lewis,  Norse  Riders  Of  The  Wireless  Wave  Scandinavians  Lead 
 The  World  In  The  "Mobile  Lifestyle"  Via  Wireless  Communications,  STAR-  TRIBUNE  (Minneapolis-  St.  Paul),  July 
 24,  2000,  available  in  2000  WL  6981691. 


 333  See  Fifth  Report,  at  17697-  17703. 


 334  See  Appendix  D,  Tables  1  and  2,  at  D-  2    D-  3,  for  an  overview  of  2.  5G  and  3G  contracts  and  trials  in  the 
 United  States. 
 335  Jerry  Yang,  CEO  of  Yahoo,  Inc.,  stated  in  March  2001,  While  its  hard  to  look  out  five  years,  wireless  is 
 still  in  need  of  innovation  until  the  economy  picks  up  again    the  return  on  investment  is  needed.  The  hockey 
 stick  curve  representing  a  massive  takeoff  of  wireless  keeps  getting  pushed  out  two  or  three  years.  I  think  it  will 
 have  really  taken  off  when  voice  becomes  a  small  part  of  whats  being  delivered.  See  Patrick  Mannion,  Wireless 
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 carriers  outside  the  United  States  have  delayed  the  launch  of  their  2.  5  and  3G  networks    some  of  which 
 were  originally  scheduled  to  occur  during  the  first  half  of  2001    due  to  various  hardware  and  software 
 problems. 


 In  the  United  States,  carriers  have  been  given  the  flexibility  to  choose  which  technology  to  use  to  deploy 
 voice,  as  well  as  advanced  mobile  data,  services.  The  two  largest  mobile  telephone  carriers  that  currently 
 use  CDMA  as  their  2G  technology,  Verizon  Wireless  and  Sprint  PCS,  announced  in  early  2001  that  they 
 plan  to  roll  out  cdma2000  1X  as  the  first  phase  of  their  3G  technology  rollout  during  2001.  336  Cdma2000 
 1X  is  expected  to  double  voice  capacity  as  compared  with  current  CDMA  networks  and  increase  data 
 transfer  speeds  to  144  kbps.  337  Both  carriers  plan  to  deploy  cdma2000  1xEV,  Verizon  Wireless  in  2002 
 and  Sprint  PCS  in  2003,  which  is  expected  to  boost  network  data  speeds  to  2.4  Mbps.  338  In  addition, 
 Nextel  has  announced  that  it  plans  to  overlay  cdma2000  technology  on  its  existing  iDEN  network.  339 


 The  major  GSM  and  TDMA  carriers  in  the  United  States,  AT&  T  Wireless,  VoiceStream,  and  Cingular 
 Wireless,  are  taking  a  different  migration  path  to  3G  technology.  All  three  carriers  plan  to  deploy  GPRS  340 


 2001  Keynoters  Embrace  Innovation,  ELECTRONIC  ENGINEERING  TIMES,  Mar.  26,  2001.  In  April  2001,  Cahners 
 In-  Stat  Group  predicted  that  delays  in  handset  introductions,  lower  than  expected  consumer  demand,  and  high 
 spectrum  costs  will  delay  3G  deployment,  and  stated,  Although  the  market  may  take  off  in  several  years,  the 
 short-  term  prospects  for  the  technology  that  enables  video  calls,  high-  speed  Internet  access,  multimedia  services 
 and  other  features  are  bleak.  See  In-  Stat  Predicts  Bleak  Short  Term  Prospects  for  Wireless  3G,  Despite  Heavy 
 Technology  Investment  by  Carriers,  BUSINESS  WIRE,  Apr.  24,  2001.  Ben  Thacker,  an  analyst  with  Visiongain, 
 reported  in  April  2001  that  many  in  the  wireless  industry  do  not  expect  to  see  3G  networks  rolled  out  on  a 
 widespread  basis  until  the  second  half  of  2003,  about  one  year  later  than  many  had  previously  expected.  See  Sylvia 
 Dennis,  3G  Plans  Still  Up  In  The  Air    Report,  NEWSBYTES,  Apr.  30,  2001.  See  also,  Obstacles  on  the  Road  to 
 Wireless,  New  Media  Investor,  Mar.  29,  2001;  Reshma  Kapadia,  Web  Executives  Play  Down  Wireless  Internet 
 Hype,  REUTERS,  Mar.  16,  2001;  Peter  S.  Goodman,  Wheres  the  Wireless  Web?,  WASHINGTON  POST,  Mar.  30, 
 2001,  at  E-  1.  See  note  340,  infra,  for  a  discussion  of  GPRS  handset  problems. 


 336  Sprint  Leads  Evolution  to  3G  with  Nations  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;  2001  Strategis 
 Mobile  Data  Report,  at  57-  58. 


 337  2001  Strategis  Mobile  Data  Report,  at  57. 


 338  Id.,  at  57-  58;  Verizon  Wireless  and  Lucent  Technologies  Plan  to  Speed  Introduction  of  Third-  Generation 
 (3G)  Technologies  to  U.  S.,  News  Release,  Verizon  Wireless,  Mar.  19,  2001. 
 339  Nextel  Communications,  Inc.,  SEC  Form  10-  K,  Apr.  2,  2001,  at  12;  Sam  Omatseye,  Technology  Wars  Set 


 to  Play  Out  in  Japan,  U.  S.,  RCR  WIRELESS  NEWS,  Apr.  23,  2001,  at  8;  Marisa  Torrieri,  Nextels  Numbers  Still 
 Low,  But  Promise  High,  WIRELESS  DATA  NEWS,  Mar.  28,  2001. 


 340  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.  This  channel  aggregation  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  limited  GPRS  data  speeds  to  20-  30 
 kbps.  See  Peggy  Albright,  Will  GPRS  Comply  with  SAR  Standards?,  WIRELESS  WEEK,  Apr.  30,  2001;  Paul 
 Durman,  Technical  Bugs  Plague  Phones,  SUNDAY  TIMES  (LONDON),  Mar.  4,  2001.  However,  recent  technological 
 developments  may  begin  to  address  these  GPRS  handset  problems.  See  Tropian  to  Discuss  Breakthrough  RF 
 Solution  for  High-  Speed  Wireless  Data  at  GPRS  Conference  in  Rome;  Companys  Breakthrough  Products  Support 
 1G  to  3G  in  a  Single  Chipset,  BUSINESS  WIRE,  May  11,  2001. 
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 technology  during  2001,  341  which  is  expected  to  raise  data  transfer  speeds  to  between  25  and  144  kbps.  342 
 AT&  T  Wireless,  which  currently  uses  TDMA  as  its  2G  technology,  announced  in  November  2000  that  it 
 will  begin  deploying  a  GSM  and  GPRS  overlay  on  its  existing  TDMA  network  during  2001.  343  After 
 rolling  out  GPRS,  these  three  carriers  are  expected  to  eventually  migrate  to  and  possibly  deploy  EDGE  as 
 an  intermediate  technology  between  GPRS  and  WCDMA.  344  EDGE  is  expected  to  raise  network  speeds  to 
 384  kbps,  WCDMA  to  2  Mbps.  345  Cingular  Wireless  is  reportedly  planning  to  build  out  EDGE  to  all  of  its 
 markets  during  2002  and  2003.  346  AT&  T  Wireless  has  announced  that  it  expects  to  migrate  to  EDGE 
 during  2002  and  to  WCDMA  beginning  in  2003.  347  In  addition,  in  conjunction  with  the  substantial 
 investment  it  received  from  NTT  DoCoMo,  AT&  T  Wireless  has  announced  it  will  begin  offering  i-  mode  in 
 early  2002,  initially  in  Seattle  and  eventually  to  the  rest  of  the  country  over  one  to  two  years.  348 


 While  U.  S.  carriers  are  allowed  to  upgrade  their  existing  networks  and  use  their  existing  spectrum  to  offer 
 341  Cingular  Wireless  has  announced  it  will  offer  GPRS  in  the  areas  currently  served  by  its  GSM  networks. 
 Cingular  Wireless  First  to  Usher  in  Next  Generation  of  Wireless  Internet  with  Faster,  Always-  on  Service,  News 
 Release,  Cingular  Wireless,  Mar.  20,  2001;  2001  Strategis  Mobile  Data  Report,  at  58-  59.  Samsung 
 Telecommunications  America  and  VoiceStream  Wireless  to  Develop  GPRS  Mobile  Phones  Standardized  on  the 
 Microsoft  Mobile  Explorer  and  Stinger  Smart  Phone  Platforms,  News  Release,  VoiceStream,  Nov.  6,  2000. 


 342  Predictions  about  GPRS  speeds  vary.  See  Peggy  Albright,  Roll  Out  The  GPRS  Handsets,  WIRELESS 


 WEEK,  Feb.  19,  2001,  at  19  (  Most  [GPRS  networks]  will  operate  at  around  20  to  30  kbps  on  the  downlink); 
 Grahame  Lynch,  Dropping  EDGE  could  regain  edge  for  AT&  T,  AMERICAS  NETWORK,  Feb.  1,  2001,  at  20  (The 
 GPRS  platform  currently  supports  real-  world  speeds  of  between  25  kbps  and  50  kbps  at  the  cell.).  Several 
 sources  estimate  maximum  GPRS  speeds  will  be  115  kbps.  See  Harry  Newton,  Newtons  Telecom  Dictionary:  16  th 
 Expanded  &  Updated  Edition,  CMP  Books,  July  2000,  at  397;  Grahame  Lynch  and  Fiona  Chau,  Surprise  Twists  In 
 CDMAs  Future,  AMERICAS  NETWORK,  Nov.  15,  2000,  at  30;  Bambi  Francisco,  The  Wireless  Web  Die  Is  Cast, 
 CBS.  MARKETWATCH.  COM,  Dec.  31,  2000;  GSM  World,  GSM    Glossary  of  Terms  (visited  Feb.  26,  2001) 
 <http://  www.  gsmworld.  com/  technology/  glossary.  html>.  However,  at  least  one  source  reports  AT&  T  Wirelesss 
 GPRS  network  will  reach  speeds  of  144  kbps.  See  Denise  Pappalardo,  AT&  T  Wireless  Maps  Major  3G  Plan, 
 NETWORK  WORLD,  Dec.  11,  2000,  at  41. 


 343  See  AT&  T  Corp.,  SEC  Form  10-  K405/  A,  Apr.  17,  2001  (  AT&  T  Wireless  Group  recently  announced 


 plans  to  deploy  a  GSM  platform  for  interim  improvements  in  wireless  data  capabilities  on  the  evolutionary  path  to 
 third  generation  services,  as  well  as  associated  voice  services.  This  platform  will  be  deployed  as  an  overlay  on 
 AT&  T  Wireless  Groups  second  generation  voice  network.  GSM  platform  deployment  is  planned  to  begin  in  the 
 second  half  of  2001.). 


 344  Denise  Pappalardo,  AT&  T  Wireless  Maps  Major  3G  Plan,  NETWORK  WORLD,  Dec.  11,  2000,  at  41; 
 Cingulars  GSM  Flirtation  May  Stem  From  AT&  T  Actions,  TELE.  COM,  Feb.  5,  2001,  available  in  2001  WL 
 8103883;  Nikki  Swartz,  The  Cingular  Sensation,  Wireless  Review,  Jan.  1,  2001,  available  in  2001  WL  6905154; 
 2001  Strategis  Mobile  Data  Report,  at  56-  59. 


 345  2001  Strategis  Mobile  Data  Report,  at  56-  59. 


 346  Id.,  at  58-  59;  Nikki  Swartz,  The  Cingular  Sensation,  WIRELESS  REVIEW,  Jan.  1,  2001,  available  in  2001 
 WL  6905154. 
 347  See  AT&  T  Corp.,  SEC  Form  10-  K405/  A,  Apr.  17,  2001;  Telephony,  COMMUNICATIONS  DAILY,  June  5, 


 2001. 
 348  NTT  DoCoMo,  AT&  T  Wireless  To  Offer  Wireless  Web  Svc  in  US,  DOW  JONES  INTERNATIONAL  NEWS,  Mar. 
 14,  2001. 
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 advanced  mobile  services,  many  claim  they  need  additional  spectrum  in  order  to  offer  mobile  Internet 
 access  at  higher,  3G-  level  speeds.  The  Commission  is  responding  to  this  increased  demand  for  spectrum  by 
 trying  to  identify  spectrum  to  license  for  advanced  mobile  services,  including  3G.  In  January  2001,  the 
 Commission  released  a  Notice  of  Proposed  Rulemaking  exploring  the  possibilities  of  using  five  different 
 spectrum  bands  for  advanced  mobile  services:  1710-  1755  MHz,  1755-  1850  MHz,  2110-  2155  MHz,  2160- 
 2165  MHz,  and  2500-  2690  MHz  .  349  Two  of  these  bands,  1710-  1755  MHz  and  2110-  2150  MHz,  are 
 subject  to  a  statutory  auction  deadline  of  September  2002.  350 


 The  1710-  1850  MHz  and  2500-  2690  MHz  bands  are  two  of  the  three  bands  that  members  of  the  2000 
 World  Radiocommunication  Conference  (  WRC-  2000)  identified  for  possible  implementation  of  3G 
 services.  351  In  the  United  States,  the  1710-  1850  MHz  band  is  currently  used  by  the  Department  of  Defense 
 for  military  purposes,  352  and  the  2500-  2690  MHz  band  is  used  by  Multipoint  Distribution  Service 
 (  MDS)  and  Instructional  Television  Fixed  Service  (  ITFS)  operators  to  offer  fixed  wireless  educational 
 and  commercial  video  services,  as  well  as  high-  speed  Internet  access  to  homes  and  small  businesses  on  a 
 limited,  but  growing,  basis.  353  In  March  2001,  the  Commission  and  the  National  Telecommunications  and 
 Information  Administration  (  NTIA)  released  final  studies  of  how  both  of  these  bands  are  currently  used 
 and  their  potential  for  accommodating  advanced  mobile  services.  354 


 In  addition,  the  Commission  is  scheduled  to  begin  auctioning  licenses  for  30  megahertz  of  spectrum  in  the 


 349  Amendment  of  Part  2  of  the  Commissions  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,  Notice  of  Proposed  Rulemaking  and  Order,  ET  Docket  No.  00-  258  (rel.  Jan.  5,  2001) 
 (  Advanced  Wireless  NPRM  &  Order). 


 350  Balanced  Budget  Act  of  1997,  Pub.  L.  No.  105-  33,  111  Stat.  251    3002(  b),  3002(  c)  (1997).  The  1710- 
 1755  MHz  band  will  be  transferred  from  the  Department  of  Defense  to  the  Commission  pursuant  to  statutory 
 requirements.  However,  federal  government  use  of  the  band  can  continue  within  16  protected  areas.  See 
 Principles  for  Reallocation  of  Spectrum  to  Encourage  the  Development  of  Telecommunications  Technologies  for 
 the  New  Millennium,  FCC  99-  354,  Policy  Statement,  14  FCC  Rcd  19868  (1999)  (  1999  Policy  Statement); 
 Advanced  Wireless  NPRM  &  Order.  In  1999,  the  Commission  proposed  allocating  the  2110-  2150  MHz  band  for 
 advanced  fixed  and  mobile  services,  of  which  one  possible  use  would  be  3G  mobile  systems.  See  1999  Policy 
 Statement. 


 351  The  third  band  was  806-  960  MHz.  Provisional  Final  Acts  of  World  Radio  Conference  (Istanbul-  WRC-2000). 


 352  Department  of  Commerce,  The  Potential  for  Accommodating  Third  Generation  Mobile  Systems  in  the 
 1710-  1850  MHz  Band:  Federal  Operations,  Relocation  Costs,  and  Operational  Impacts,  Final  Report,  March  2001, 
 at  xiv. 


 353  Federal  Communications  Commission,  Spectrum  Study  of  the  2500-  2690  MHz  Band,  The  Potential  for 


 Accommodating  Third  Generation  Mobile  Systems,  Final  Report,  Mar.  30,  2001.  See  Appendix  A,  infra,  for  a 
 discussion  of  fixed  wireless  Internet  offerings  by  MDS  operators. 


 354  Federal  Communications  Commission,  Spectrum  Study  of  the  2500-  2690  MHz  Band,  The  Potential  for 
 Accommodating  Third  Generation  Mobile  Systems,  Final  Report,  Mar.  30,  2001;  Department  of  Commerce,  The 
 Potential  for  Accommodating  Third  Generation  Mobile  Systems  in  the  1710-  1850  MHz  Band:  Federal  Operations, 
 Relocation  Costs,  and  Operational  Impacts,  Final  Report,  March  2001. 
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 upper  700  MHz  band  on  September  12,  2001.  355  This  spectrum  is  part  of  a  larger  band,  698-  806  MHz, 
 that  the  WRC-  2000  identified  for  possible  implementation  of  3G  systems.  356  Mobile  operators  could  use 
 the  spectrum  in  the  upper  700  MHz  band  to  offer  high-  speed  mobile  Internet  access  once  it  is  licensed.  357 


 European  and  Asian  countries  continued  to  license  spectrum  for  3G  services  during  2000.  358  At  the  writing 
 of  the  Fifth  Report,  the  United  Kingdom  had  completed  its  3G  auction,  and  Finland  and  Spain  had  awarded 
 3G  licenses  through  beauty  contests.  359  Since  that  time,  Germany,  Austria,  Belgium,  Italy,  the 
 Netherlands,  and  Switzerland  have  completed  3G  spectrum  auctions,  while  Japan,  Norway,  Portugal, 
 Sweden,  and  South  Korea  have  awarded  3G  licenses  using  beauty  contests.  Unlike  the  United  States, 
 European  and  other  countries  have  made  3G  spectrum  available  only  for  the  deployment  specific 
 technologies,  in  this  case  GPRS  and  WCDMA.  Therefore,  carriers  in  those  countries  are  not  allowed  to 
 deploy  3G  technologies  in  the  same  spectrum  bands  as  their  current  2G  networks  but  must  use  separate 
 bands  for  the  different  technologies. 


 Like  the  U.  S.  carriers  discussed  above,  mobile  carriers  abroad  have  announced  plans  to  roll  out  commercial 
 3G  services  over  the  next  several  years,  although  many  delayed  their  initial  launch  dates  during  early  2001.  360  In  Japan,  for  example,  NTT  DoCoMo  had  positioned  itself  to  be  the  first  carrier  to  introduce  3G 


 mobile  services  with  a  rollout  date  of  May  2001.  However,  in  April  2001,  the  company  announced  it 
 would  delay  its  3G  launch  to  October  2001  due  to  technological  problems.  361  In  May  2001,  BT  delayed  the 


 355  One  10-  megahertz  license  and  one  20-  megahertz  license  will  be  offered  in  each  of  the  six  Economic  Area 
 Groups  (  EAGs)  that  cover  the  United  States.  See  Service  Rules  for  the  746-  764  and  776-  794  MHz  Bands,  and 
 Revisions  to  Part  27  of  the  Commissions  Rules,  WT  Docket  No.  99-  168,  First  Report  and  Order,  15  FCC  Rcd  476 
 (2000). 


 356  See  Advanced  Wireless  NPRM  &  Order,    4  and  note  12;  Provisional  Final  Acts  of  World 
 Radiocommunication  Conference  (Istanbul-  WRC-  2000),  Resolution  223. 
 357  This  spectrum  is  currently  encumbered  by  television  broadcasters  in  channels  60-  69  who  are  permitted  by 


 statue  to  continue  operations  until  December  31,  2006,  at  which  time  their  markets  are  to  be  converted  to  digital 
 television  (  DTV).  See  47  U.  S.  C.    337(  e);  47  U.  S.  C.    309(  j)(  14).  However,  incumbent  broadcasters  may 
 extend  their  operations  beyond  this  date  if  certain  DTV  service  penetration  targets  are  not  met.  One  of  these 
 targets  is  that  85  percent  of  the  household  in  a  given  television  market  must  have  a  digital  TV  receiver  or  digital 
 TV  converter  technology.  See  47  U.  S.  C.    309(  j)(  14).  See  also  Service  Rules  for  the  746-  764  and  776-  794  MHz 
 Bands,  and  Revisions  to  Part  27  of  the  Commissions  Rules,  WT  Docket  No.  99-  168,  First  Report  and  Order,  15 
 FCC  Rcd  476  (2000);  Reallocation  and  Service  Rules  for  the  698-  746  MHz  Spectrum  Band  (Television  Channels 
 52-  59),  Notice  of  Proposed  Rule  Making,  GN  Docket  No.  01-  74,  FCC  01-  91,    20-  26  (rel.  Mar.  28,  2001). 


 358  See  Section  II.  A.  3,  International  Developments,  supra.  See  Appendix  D,  Table  3,  at  D-  4  for  an  overview 


 of  3G  licensing  abroad. 
 359  In  a  beauty  contest,  also  called  a  comparative  tender,  applicants  and  their  bids  are  judged  by 
 government  agencies  based  on  criteria  set  out  beforehand,  such  as  their  financial  resources,  their  commitment  to 
 meet  specified  investment  and  build-  out  targets,  and  their  ability  to  promote  certain  objectives  such  as  the  rapid 
 introduction  of  service,  wide  geographic  coverage,  reasonable  prices,  quality  and  reliability. 


 360  Akiko  Kashiwagi  and  Clay  Chandler,  Next-  Generation  Wireless  on  Hold;  Japanese  Phone  Giants  4- 
 Month  Postponement  Follows  Delays  in  Europe,  U.  S.,  THE  WASHINGTON  POST,  Apr.  25,  2001,  at  E-  3;  NCC  Warns 
 of  3G  Delays,  GLOBAL  NEWS  WIRE,  Apr.  25,  2001. 


 361  Yuri  Kageyama,  NTT  DoCoMo  Delays  Rollout  of  Next-  Generation  Wireless  Service,  THE  ASSOCIATED 
 PRESS,  Apr.  24,  2001;  Yuri  Kageyama,  NTT  DoCoMo  Explains  Decision  on  Limited  3G  Rollout,  THE  ASSOCIATED 
52
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 launch  of  3G  services  on  the  Isle  of  Man  from  the  end  of  May  2001  until  at  least  September  2001  due  to 
 software  problems  with  handsets.  362 


 2.  Current  Offerings 
 a.  Paging/  Messaging 
 Since  the  writing  of  the  Fifth  Report,  paging/  messaging  carriers  have  continued  to  position  themselves  as 
 major  players  in  the  mobile  data  sector.  363  By  mid-  year  2000,  several  carriers  were  offering  advanced 
 messaging  services  over  their  own  networks.  364  These  services  include  e-  mail,  Internet-  based  offerings, 
 personalized  web  content,  two-  way  messaging  and  1.  5  way  guaranteed  messaging.  365  Advanced  messaging 
 services  allow  carriers  to  generate  higher  revenues  per  user  than  traditional  one-  way  paging  services.  366  As 
 a  result,  carriers  can  remain  profitable  with  fewer  subscribers.  Analysts  believe  that  traditional  paging 
 companies  that  are  innovative  and  develop  services  beyond  one-  way  paging  and  messaging  will  be  the  most 
 successful.  367  As  discussed  below,  during  2000,  many  paging/  messaging  carriers  continued  to  form 
 strategic  partnerships  with  content  providers  and  software  developers  in  order  to  expand  their  Internet 
 offerings. 


 (i)  Industry  Structure  and  Performance 
 Subscribership  and  revenues  in  the  paging/  messaging  industry  declined  during  2000.  368  According  to  one 
 analyst,  the  total  number  of  paging/  messaging  subscribers  fell  1  percent  from  45.  8  million  in  1999  to  45.3 
 million  in  2000.  369  In  addition,  revenues  in  the  paging/  messaging  sector  decreased  from  $5.  25  billion  in 


 PRESS,  Apr.  26,  2001.  At  that  time,  NTT  DoCoMo  stated  it  would  run  a  trial  of  its  3G  technology  with  5,000 
 customers  in  Tokyo  between  May  and  October,  2001.  Akiko  Kashiwagi  and  Clay  Chandler,  Next-  Generation 
 Wireless  on  Hold;  Japanese  Phone  Giants  4-  Month  Postponement  Follows  Delays  in  Europe,  U.  S.,  THE 
 WASHINGTON  POST,  Apr.  25,  2001,  at  E-  3.  In  May  2001,  NTT  DoCoMo  stated  it  would  not  be  able  to  offer  3G 
 mobile  phone  service  throughout  all  of  Japan  until  at  least  2004.  New  Mobile  Phones  Delayed  in  Japan,  THE 
 ASSOCIATED  PRESS,  May  22,  2001. 


 362  Richard  Baum,  BT  Delays  First  3G  Launch  As  Mobiles  Fail,  REUTERS,  May  14,  2001.  The  software 


 problem  reportedly  prevents  the  network  from  seamlessly  passing  the  call  to  a  radio  in  the  next  cell.  Id. 
 363  Cynthia  M.  Motz,  CFA,  Hey  Babe,  Take  a  Walk  on  the  Wireless  Side,  U.  S.  Wireless  Telecommunications 


 Services,  Credit  Suisse  First  Boston,  May  5,  2000,  at  12. 
 364  See  Appendix  D,  Table  8,  at  D-  10. 


 365  See  Fifth  Report,  at  17717. 
 366  Jennifer  Mears,  Paging  Carriers  Learn  to  Fly;  One-  way  Providers  Metamorphose  into  Two-  way 
 Messaging,  WIRELESS  WEEK,  Aug.  28,  2000. 
 367  Marisa  Torrieri,  Company  Woes  Prove  Messagings  Not  the  Savior,  WIRELESS  DATA  NEWS,  Jan.  31,  2000 


 (citing  Rob  Hegblom  from  the  Strategis  Group). 
 368  See  Appendix  D,  Tables  5-  7,  at  D-  7    D-  9. 


 369  U.  S.  Paging  Subscribers  and  Revenues,  PCIA  Global  Wireless  Portfolio,  at  10,  2000  Edition  (citing  the 
 Strategis  Group).  The  number  of  one-  way  subscribers  fell  2.2  percent  from  45.1  million  in  1999  to  44.1  million  in 
 2000.  Id. 
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 Federal  Communications  Commission  FCC  01-  192 
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 1999  to  $5.1  billion  during  2000.  370  However,  during  2000,  the  number  of  advanced  messaging 
 subscribers  increased  over  70  percent  from  700,000  to  1.2  million  subscribers,  and  revenues  attributed  to 
 advanced  messaging  were  $257  million  at  year  end  2000,  a  46  percent  increase  over  1999s  advanced 
 messaging  revenues  of  $176  million.  371 


 Arch  and  Metrocall,  Inc.  (  Metrocall)  are  the  largest  carriers  in  the  paging/  messaging  sector,  372  together 
 accounting  for  approximately  45  percent  of  the  subscribers  in  the  paging/  messaging  sector.  373  Other  major 
 carriers  include  SkyTel  Communications,  Inc.  (  SkyTel),  374  WebLink  Wireless,  Inc.  (  WebLink),  and 
 Verizon  Wireless  Messaging  Services,  Inc.  (  Verizon  Messaging).  375  Cingular  Interactive  and  Motient 
 also  provide  advanced  messaging  services,  376  and  are  discussed  in  more  detail  in  the  Dedicated  Data 
 Network  section  of  this  report. 


 Among  other  satellite  companies,  Orbcomm  and  Motient  offer  satellite  messaging,  paging,  e-  mail  and  other 
 data  services.  Orbcomm  provides  two-  way  monitoring,  tracking  and  satellite  messaging  service  using  low-earth 
 orbiting  satellites.  In  February  2001  Orbcomm  sent  over  872,000  messages.  377 


 During  2000,  carriers  also  made  efforts  to  expand  their  subscriber  base  with  new  market  offerings.  378  For 
 example  the  CampusLink  program  initiated  by  Metrocall  encourages  the  use  of  advanced  messaging 
 services  among  college  students.  CampusLink  allows  university  departments  to  use  wireless  devices  to 
 inform  students  of  upcoming  events  such  as  orientation,  class  scheduling  changes  and  other  helpful 
 campus-  oriented  events.  379 


 370  Id. 


 371  Id. 
 372  Top  Paging  Carriers,  RCR  RADIO  COMMUNICATIONS  REPORT,  July  11,  2000. 
 373  Figure  based  on  Third  Quarter  2000  results.  See  Appendix  D,  Table  6,  at  D-  8. 
 374  SkyTel  Communications,  Inc.  is  a  wholly  owned  subsidiary  of  WorldCom  that  was  acquired  on  October  1, 
 1999.  See  Fifth  Report,  at  17720-  17721. 
 375  GTEs  remaining  paging  operations  and  AirTouch  Communicationss  paging  opertions  are  now 


 combined  as  Verizon  Wireless  Interactive  Messaging  Services,  Inc.  See  Verizon  Wireless  Messaging  Services, 
 Company  Information  (visited  Apr.  27,  2001)  <http://  www.  airtouchpaging.  com/  index.  asp>. 


 376  See  Section  II.  B.  2.  d,  Dedicated  Data  Networks,  infra. 


 377  Hotbird,  C.  E.  Unterberg,  Towbin,  Mar.  12,  2001,  at  43. 
 378  Metrocall  Launches  CampusLink  Marketing  Campaign  Targeting  Class  of  04;  Wireless  Leader  Will 
 Commence  Aggressive  Marketing  Initiative  at  Schools  from  Coast  to  Coast,  News  Release,  Metrocall,  Apr.  20, 
 2000. 


 379  CampusLink  has  been  implemented  at  Loyola-  Marymount  University  in  Louisiana  and  the  Colorado 


 School  of  Mines.  Metrocall  conducted  a  trial  of  CampusLink  with  alphanumeric  pagers  at  Loyola-  Marymount 
 University  with  1,000  students,  many  of  whom  opted  to  retain  services  after  the  free  trial  period  expired. 
 Metrocall  Launches  CampusLink  Marketing  Campaign  Targeting  Class  of  04;  Wireless  Leader  Will  Commence 
 Aggressive  Marketing  Initiative  at  Schools  from  Coast  to  Coast,  News  Release,  Metrocall,  Apr.  20,  2000. 
 Metrocall  has  agreements  with  several  other  colleges  to  participate  in  CampusLink  during  the  summer  and  fall  of 
 2001.  Conversation  with  Michael  T.  Scanlon,  Metrocall,  Mar.  27,  2001. 
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 Federal  Communications  Commission  FCC  01-  192 
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 (a)  Mergers,  Acquisitions,  and  Restructurings 
 Arch  Communications  and  Paging  Network,  Inc.  (  PageNet),  completed  their  merger  on  November  10, 
 2000.  380  In  addition  to  the  Arch-  PageNet  merger,  there  were  several  other  small  mergers  of  regional 
 carriers.  381 


 Since  January  1,  2000,  other  developments  in  the  paging/  messaging  industry  include  three  of  the  top  five 
 paging  companies  filing  for  bankruptcy.  382  These  three  companies  are  TSR  Wireless,  Inc.  (  TSR 
 Wireless),  Metrocall,  and  WebLink.  TSR  Wireless,  the  largest  privately  held  paging  company  with  2.  5 
 million  subscribers,  filed  for  Chapter  7  bankruptcy  on  December  4,  2000.  383  On  March  28,  2001,  the  U.  S. 
 Bankruptcy  Court  approved  the  Asset  Purchase  Agreements  of  TSR  Wirelesss  licenses  by  Space  Data 
 Research,  LLC  (  Space  Data),  SkyTel,  and  Network  Services,  LLC.  384  Prior  to  filing  for  bankruptcy, 


 380  Arch  Wireless  Completes  Merger  with  PageNet,  Becomes  Leading  Provider  of  Two-  way  Internet 
 Messaging,  News  Release,  Arch,  Nov.  20,  2000;  see  Fifth  Report,  at  17720-  17721,  for  details  of  the  merger. 
 381  Aquis  Communications,  Inc.  (  Aquis)  acquired  several  small,  regional  paging  companies.  Aquis 


 increased  its  subscriber  base  through  the  strategic  regional  acquisitions  of  Suburban  Connect  and  SourceOne 
 Paging.  SourceOne  Paging  operated  in  several  major  Midwestern  cities  including:  Chicago,  Minneapolis,  and 
 Detroit.  Aquis  had  been  managing  the  operations  of  SourceOne  since  August  1999.  Aquis  Communications 
 Acquires  Suburban  Paging,  News  Release,  Aquis,  June  16,  2000.  Suburban  Connect,  a  metropolitan  Philadelphia 
 paging  company,  had  19,000  subscribers.  Aquis  Completes  SourceOne  Wireless  Acquisitions,  News  Release, 
 Aquis,  Feb.  1,  2000.  Teletouch  Communications,  Inc.  (  Teletouch),  a  regional  paging/  messaging  carrier  that 
 focuses  on  smaller  metropolitan  markets  in  the  south,  acquired  GTEs  Texarkana  paging  operations  when  GTE 
 sold  several  of  its  paging  operations  following  the  merger  that  created  Verizon  Wireless.  The  acquisition  provided 
 immediate  positive  cash  flow  for  Teletouch.  Teletouch  Communications  Acquires  Texarkana  Paging  Operations 
 and  Paging  Frequency,  BUSINESS  WIRE,  Sept.  27,  2000. 


 382  Top  Paging  Carriers,  RCR,  July  11,  2000. 


 383  Chapter  7  bankruptcy  requires  liquidation  of  assets.  Yuki  Noguchi,  Pager  Firm  is  Latest  to  Pull  the  Plug; 
 Failure  of  TSR  Wireless  Shows  Industry  Woes,  THE  WASHINGTON  POST,  Dec.  7,  2000,  available  in  2000  WL 
 29920221.  TSR  wireless  had  been  operating  a  30-  state  network.  The  company  has  over  $200  million  in  debt 
 outstanding  to  creditors.  J.  B.  Houck,  TSR  Wireless  Still  Paging,  for  Now,  WIRELESS  NEWSFACTOR,  Dec.  15,  2000. 
 Its  assets  include  its  network,  subscriber  base,  275  retail  outlets,  numerous  one-  way  licenses,  one  national 
 narrowband  PCS  license,  five  regional  narrowband  PCS  licenses,  and  2,000  antennas.  Mike  Dano,  Questions 
 Linger  About  TSR  Demise,  GLOBAL  WIRELESS,  Jan.  1,  2001. 


 384  Mike  Dano,  Three  Companies  Pay  $12.2M  for  TSR  Assets,  RCR  WIRELESS  NEWS,  Apr.  2,  2001,  available 


 in  2001  WL  8869219.  Space  Data  has  agreed  to  purchase  TSR  Wirelesss  national  narrowband  PCS  license  for 
 $2.  6  million,  and  SkyTel  has  agreed  to  purchase  its  five  regional  narrowband  PCS  licenses  for  $3.  6  million.  Id. 
 Network  Services,  LLC  has  agreed  to  purchase  all  of  TSR  Wirelesss  one-  way  paging  assets  for  $6  million. 
 Bankruptcy  Court  Approves  TSR  Wireless  Asset  Purchase  Agreement  by  Network  Services,  LLC.,  News  Release, 
 Network  Services,  LLC,  Mar.  28,  2001.  The  applications  for  the  Commissions  consent  to  transfer  control  of  the 
 narrowband  PCS  licenses  to  Space  Data  and  SkyTel  are  currently  pending.  See  ULS  File  No.  0000423487, 
 received  Apr.  10,  2001;  ULS  File  No.  0000417882,  received  Apr.  24,  2001.  Space  Data  is  planning  to  use  the 
 narrowband  PCS  license  to  operate  a  free-  floating,  balloon-  borne  communications  system  to  provide  two-  way 
 paging    a  type  of  operation  not  specifically  mentioned  in  the  narrowband  PCS  rules.  Therefore,  Space  Data  filed 
 with  its  application  a  Request  for  Declaratory  Ruling  or,  in  the  alternative,  for  Waiver  regarding  the  Commissions 
 rules.  On  Apr.  19,  2001,  the  Commission  released  a  Public  Notice  seeking  comment  on  Space  Datas  request.  See 
 Wireless  Telecommunications  Bureau  Seeks  Comment  on  Space  Data  Research,  LLCs  Request  for  Declaratory 
 Rule  or  Waiver  Regarding  the  Narrowband  PCS  Rules,  Public  Notice,  DA  01-  970,  rel.  Apr.  19,  2001. 
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 Federal  Communications  Commission  FCC  01-  192 
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 TSR  Wireless  had  been  activating  35,000  new  subscribers  a  month.  385 
 On  April  2,  2001,  Metrocall  and  WebLink  announced  that  the  two  companies  would  merge  through 
 concurrent  future  Chapter  11  bankruptcy  proceedings.  386  However,  on  May  16,  2001  the  two  companies 
 announced  that  they  were  abandoning  this  plan,  and  on  May  24,  2001  WebLink  announced  that  it  was 
 filing  for  Chapter  11  bankruptcy.  387 


 In  addition,  in  September  2000  Orbcomm  filed  for  bankruptcy  under  Chapter  11,  but  continued  to  provide 
 service.  388  In  April  2001  Orbcomm  was  purchased  by  International  Licensees,  LLC.  389 


 In  previous  CMRS  Competition  Reports,  the  Commission  concluded  that  the  paging  industry  was  highly 
 competitive.  390  Notwithstanding  the  merger  activity  of  the  past  year,  the  Commission  has  a  number  of 
 reasons  to  believe  that  the  level  of  competition  in  this  industry  segment  remains  consistent  with  previous 
 years.  First,  there  is  still  an  average  of  28  paging  licensees  serving  each  of  the  25  largest  cities  in  the 
 United  States  (not  including  resellers)  and  an  average  of  10  paging  licensees  serving  each  of  the  25  smallest 
 MSAs.  391  Second,  the  costs  of  switching  carriers  for  consumers  remain  relatively  low.  Third  paging 
 carriers  are  facing  strong  competition  from  other  sectors  of  the  wireless  industry. 


 (ii)  Advanced  Internet-  Based  Offerings 
 In  addition  to  traditional  one-  way  messaging,  paging/  messaging  carriers  are  offering  advanced  messaging 
 services,  392  including  e-  mail,  organizer  applications  and  Internet  content,  in  response  to  increasing  customer 
 demand  for  advanced  mobile  data  services.  393  As  evidence  of  this  increased  demand,  during  2000,  300,000 
 one-  way  paging  subscribers  migrated  to  advanced  messaging  services.  394  Because  of  the  increased  revenue 
 potential,  some  carriers  are  attempting  to  identify  efficient  ways  to  speed  the  migration  from  one-  way 
 messaging  to  advanced  messaging.  For  example,  Arch  launched  a  customer  database  management 
 program  that  enables  the  company  to  identify  and  market  advanced  messaging  services  to  its  one-  way 


 385  Mike  Dano,  Questions  Linger  About  TSR  Demise,  GLOBAL  WIRELESS,  Jan.  1,  2001. 
 386  WebLink  and  Metrocall  to  Merger  in  Chapter  11  Deal,  News  Release,  WebLink,  Apr.  2,  2001. 
 387  WebLink  intends  to  restructure  its  debt  by  converting  high-  yield  notes  worth  $470  million  into  equity. 
 WebLink  Wireless,  Inc.  Announces  Chapter  11  Filing;  Intent  to  Convert  All  High-  Yield  Debt  to  Equity,  WebLink, 
 News  Release,  May  24,  2001. 


 388  Hotbird,  C.  E.  Unterberg,  Towbin,  Mar.  12,  2001,  at  43. 


 389  Orbcomm  (visited  May  25,  2001)  <http://  www.  orbcomm.  com>. 
 390  See  Fifth  Report,  at  17721-  17722. 
 391  RCR  Publications,  RCRS  1999  PAGING  DATABASE,  1999. 
 392  See  Appendix  D,  Table  8,  at  D-  10. 
 393  WebLink  Wireless,  Inc.,  SEC  Form  10-  Q,  Nov.  14,  2000,  at  4. 
 394  U.  S.  Paging  Subscribers  and  Revenues,  PCIA  Global  Wireless  Portfolio,  at  10,  2000  Edition  (citing  the 
 Strategis  Group). 
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 paging  users.  395 
 (a)  Types  of  services  and  content 
 Studies  indicate  that  subscribers  view  e-  mail  access  as  one  of  the  most  important  features  of  advanced 
 messaging  devices.  396  According  to  the  Strategis  Group,  more  than  30  million  e-  mail  users  said  that  e-  mail 
 is  the  most  important  offering  for  wireless  data  service.  397  Most  of  the  major  paging/  messaging  carriers 
 allow  users  to  send,  as  well  as  receive,  e-  mail  messages  with  two-  way  devices.  Some  carriers  offer  the 
 ability  to  converge  e-  mail  from  several  different  e-  mail  accounts  into  a  single  account.  For  example,  Arch 
 provides  the  Arch  Message  Center  Service  which  allows  users  to  access  consolidated  e-  mail,  address 
 books,  and  schedules  from  any  web-  connected  desktop  or  through  an  Arch  advanced  messaging  device.  398 
 Archs  service  is  nationwide,  includes  Internet  content  at  no  additional  charge  and  is  priced  at  $14.95  to 
 send  or  receive  25,000  characters.  399  Other  carriers  allow  customers  to  filter  their  e-  mail,  read  headers,  or 
 read  the  entire  message  and  attachments.  400  Many  of  the  advanced  messaging  devices  also  provide 
 additional  organizational  features  that  create  a  hybrid  two-  way  pager/  PDA.  401 


 Paging/  messaging  companies  also  offer  customers  the  ability  to  receive  personalized  Internet  content 
 through  their  advanced  messaging  devices.  402  Users  can  register  via  the  Internet  with  services  that  allow 
 them  to  receive  specific  types  of  Internet  content  including  sports  scores,  weather,  stock  quotes,  driving 
 directions,  movie  schedules,  restaurant  listings,  and  travel  information.  403 


 The  various  advanced  messaging  product  offerings  have  created  tiering  in  the  market  that  allows  for  both 


 395  Arch  Launches  Customer  Database  Management  Program  to  Better  Identify  and  Target  Two-  Way 
 Messaging  Users,  Arch,  News  Release,  Feb.  19,  2001. 
 396  Marisa  Torrieri,  Trends  and  Analysis  from  the  Mobile  Messaging  and  Internet  Applications  Conference, 


 WIRELESS  DATA  NEWS,  Aug.  2,  2000,  available  in  2000  WL  7382594. 
 397  Id. 


 398  New  Arch  Wireless  Service  Enables  Access  to  Home  and  Office  E-  mail  Anytime,  Anywhere,  News 
 Release,  Arch,  Oct.  25,  2000. 
 399  Users  can  also  send  e-  mails  from  their  advanced  messaging  devices.  Arch,  Product  Information  (visited 


 Feb.  21,  2001) 
 <http://  store.  arch.  com/  Forms/  Pager.  cfm?  agentid=  arch&  cfid=  378974&  cftoken=  1609540&  PagerType=  webster>. 


 400  WebLink  Wireless  Offers  Wireless  Access  to  Personal  E-  mail,  News  Release,  WebLink,  Jan.  5,  2001. 


 401  See  Section  II.  B.  2.  c,  Handheld  Devices,  infra. 
 402  SkyTel,  Strategy.  com  to  Provide  Personalized  Financial  News  to  Wireless  Customers,  News  Release, 
 SkyTel,  Nov.  9,  2000;  Arch  Partners  with  GoAmerica  to  Offer  Wireless  Internet  for  Mobile  Data  Market,  News 
 Release,  Arch,  Apr.  12,  2000;  Metrocall,  Lifeminders  Partner  to  Wirelessly  Deliver  Personalized  Information  and 
 Reminder  Messages  to  Customers,  News  Release,  Metrocall,  June  28,  2000. 


 403  Subscribers  to  the  Internet  content  services  offered  by  paging/  messaging  carriers  do  not  have  access  to  the 


 same  type  of  content  available  with  wireline  web  access,  but  only  to  content  that  has  been  specially-  designed  for 
 these  services. 
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 lower-  priced  limited-  service  products  and  higher-  priced,  feature-  rich  products.  404  For  example,  SkyTel 
 offers  SkyWord,  a  lower-  tiered  messaging  product  that  offers  the  ability  to  receive  text  messages  and 
 limited  access  to  news  updates.  SkyTel  also  offers  SkyWriter,  a  higher-  tiered  product  that  offers 
 guaranteed  two-  way  messaging  with  the  ability  to  send  messages  up  to  500  characters  in  length  to  any  e-mail 
 address,  other  SkyTel  pager  or  telephone,  and  unlimited  access  to  customized  Internet  content.  405 


 (b)  Partnerships 
 During  2000,  paging/  messaging  companies  continued  to  form  partnerships  and  joint  ventures  that  allow 
 subscribers  to  use  enhanced  applications,  such  as  Internet  and  e-  mail  access.  406  For  example,  Microsoft 
 Corporation  (  Microsoft)  offers  WebLinks  two-  way  subscribers  Internet  content  via  the  MSN  Network,  407  and  OracleMobile,  Inc.  has  executed  agreements  with  several  mobile  data  carriers  to  provide 


 access  to  Internet  content  via  advanced  messaging  devices.  GoAmerica  Communications,  Corp. 
 (  GoAmerica)  provides  personalized  content  to  Arch  subscribers  via  its  Go.  Web  Internet  service,  408  and 
 Lifeminders,  Inc.  provides  Internet  content  and  custom  reminder  messages  to  Metrocalls  subscribers.  409 


 In  addition,  advanced  paging/  messaging  providers  have  co-  branded  wireless  messaging  devices  with 
 companies  that  include:  traditional  paging  carriers,  410  Internet  sites,  411  Internet  service  providers,  412 
 resellers,  413  equipment  manufacturers  414  and  Internet  portals.  415  These  co-  branded  products  include  the 


 404  Monica  Rogers,  Paging  Industry  Battling  to  Adapt;  More  Functions,  Wide  Service  Area  are  Selling 
 Points,  CRAINS  CHICAGO  BUSINESS,  July  24,  2000. 
 405  SkyTel,  Product  Information  (visited  Mar.  30,  2001)  <http://  www.  skytel.  com>. 


 406  WebLink  Wireless  Signs  Contracts  with  Notify  Technology  Corporation  to  Provide  Wireless  Access  to 
 Personal  and  Business  E-  mail,  News  Release,  WebLink,  Dec.  7,  2000;  Verizon  Wireless  Messaging  Services 
 Selects  Critical  Path  to  Provide  Wireless  Messaging  Infrastructure  for  Millions  of  Paging  Customers,  News 
 Release,  Verizon  Messaging,  Nov.  6,  2000;  WebLink  Wireless  Teams  with  Cross  Communications,  RPA  Wireless, 
 and  Veriprise  Wireless,  News  Release,  WebLink,  Sept.  26,  2000. 


 407  WebLink  Wireless  Signs  Strategic  Alliance  with  Teletouch  Communications  to  Provide  Wireless  Data 


 Services,  News  Release,  WebLink,  Mar.  15,  2000. 
 408  Arch  Partners  with  GoAmerica  to  Offer  Wireless  Internet  for  Mobile  Data  Market,  News  Release,  Arch, 


 Apr.  12,  2000. 
 409  Metrocall,  Lifeminders  Partner  to  Wirelessly  Deliver  Personalized  Information  and  Reminder  Messages 


 to  Customers,  News  Release,  Metrocall,  June  28,  2000. 
 410  WebLink  Wireless  Signs  Strategic  Alliance  with  Teletouch  Communications  to  Provide  Wireless  Data 


 Services,  News  Release,  WebLink,  Mar.  15,  2000;  WebLink  Wireless  Signs  Seven  Additional  Wireless  Data 
 Carrier  Contracts;  Relationships  Reinforce  WebLink  Wireless  Position  as  the  Industrys  Carriers  Carrier,  News 
 Release,  WebLink,  Feb.  24,  2000;  Aquis  Signs  Strategic  Agreement  with  WebLink  Wireless  to  Provide  Two-  Way 
 Wireless  Data  Services,  News  Release,  Aquis,  May  1,  2000. 


 411  Arch,  Weather.  com  Launch  the  Weather  Channel  Pager,  Wireless  Service  offers  Customized  Weather 


 Updates  and  Forecasts,  News  Release,  Arch,  June  21,  2000. 
 412  America  Online  and  Arch  Communications  Plan  to  Deliver  Wireless  AOL  Applications  for  AOL  Mobile 


 Messenger,    News  Release,  Arch,  Feb.  28,  2000. 
 413  Excel  Launches  2-  way  Messaging  Through  WebLink  Wireless,  News  Release,  WebLink,  Nov.  1,  2000. 
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 names  of  both  companies  on  the  product  itself.  For  example,  Arch  has  teamed  with  America  Online,  Inc. 
 (  AOL)  to  provide  two-  way  wireless  messaging  capabilities  for  the  AOL  Mobile  Messenger  Service.  The 
 service  will  also  offer  AOLs  instant  messenger  and  e-  mail  service.  416 


 b.  Mobile  Telephone  Operator  Offerings 
 The  major  mobile  telephone  carriers  continued  to  develop  mobile  data  capabilities  throughout  2000. 
 Consumers  are  offered  web  access,  SMS,  and  e-  mail  on  their  mobile  phones.  Each  type  of  offering  is 
 discussed  below. 


 (i)  Wireless  Web 
 Using  their  existing  networks,  seven  providers  417  currently  offer  text-  based  wireless  web  418  services  via 
 mobile  telephone  handsets  at  speeds  ranging  from  9.  6  to  19.  2  kbps.  419  During  2000,  providers  introduced 
 new  web-  enabled  phones  and  offered  promotions  throughout  the  year  to  encourage  customers  to  use 
 wireless  web  services.  Mobile  telephone  providers  continue  to  expand  their  wireless  web  networks  and 
 service  capabilities  and  to  migrate  their  networks  to  higher  speed  technologies  during  2001. 


 The  wireless  web  services  currently  offered  by  mobile  telephone  carriers  enable  customers  to  surf  web  sites 
 for  news,  stock  quotes,  traffic  reports,  weather  forecasts,  movie  listings,  shopping,  and  other  text-  based 
 information.  Some  mobile  Internet  users  can  also  transact  business,  such  as  trading  stocks  or  buying  movie 
 tickets,  using  their  mobile  phone.  Wireless  web  customers  have  access  to  different  content  than  is  available 
 with  wireline  web  access,  due  to  the  fact  that  many  content  providers  have  redesigned  their  sites  for 
 wireless  use.  420  Sites  that  have  not  been  redesigned  for  wireless  use  may  be  difficult  to  download  on  mobile 
 devices  or  may  present  only  limited  text-  based  information.  The  specific  web  content  available  to  wireless 


 414  Staying  in  Touch  Gets  Easier  with  BlackBerry  by  SkyTel,  News  Release,  SkyTel,  May  31,  2000. 
 415  Yahoo!  and  WebLink  Wireless  Team  to  Bring  Web  Services  to  2-  Way  Messaging  Devices,  News  Release, 
 WebLink,  Oct.  16,  2000. 
 416  America  Online  and  Arch  Communications  Plan  to  Deliver  Wireless  AOL  Applications  for  AOL  Mobile 


 Messenger,  News  Release,  Arch,  Feb.  28,  2000. 
 417  The  seven  wireless  carriers  offering  wireless  web  service  are  ALLTEL,  AT&  T  Wireless,  Cingular 


 Wireless,  Nextel,  Sprint  PCS,  Verizon  Wireless,  and  VoiceStream. 
 418  As  mentioned  above  in  note  318,  supra,  the  terms  wireless  web  and  mobile  web  are  used  throughout 
 Section  II.  B  to  mean  mobile  Internet  access  via  mobile  telephone  handsets. 
 419  The  technologies  and  speeds  used  for  wireless  web  services  vary  by  mobile  telephone  carrier.  Sprint  PCS 
 and  Verizon  Wireless  currently  have  a  maximum  network  speeds  of  14.  4  kbps.  AT&  T  Wireless  uses  its  Cellular 
 Digital  Packet  Data  (  CDPD)  network  for  its  wireless  web  service  and  transfers  data  at  rates  of  up  to  19.  2  kbps. 
 Nextel  uses  iDEN  to  deliver  data  at  a  rate  of  9.  6  kbps.  Sprint  Announces  Record  Fourth  Quarter,  Yearly  Results, 
 News  Release,  Sprint,  Feb.  1,  2001;  Richard  Hoffman,  A  World  Without  Wires,  NETWORK  COMPUTING,  July  10, 
 2000,  available  in  2000  WL  11054317;  AT&  T  Wireless,  AT&  T  Wireless  Services:  FAQs  (visited  Jan.  29,  2001) 
 <http://  www.  attws.  com/  business/  lcorp/  explore/  wireless_  ip/  cust_  serv/  faqs/  csgenfaq.  shtml>;  Kirk  Laughlin,  Can 
 American  Wireless  Afford  3G?,  AMERICAS  NETWORK,  Nov.  15,  2000,  available  in  2000  WL  10795176. 


 420  Ian  Austen,  The  New  Wireless  Web,  NEW  YORK  TIMES,  Sept.  28,  2000,  at  G-  1. 
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 web  users  also  varies  by  carrier.  Some  carriers  plans  allow  users  to  access  all  web  sites,  while  others  give 
 users  access  to  only  a  limited  number  of  sites.  This  latter  method  of  delivering  web  content  is  often  called 
 the  walled  garden  approach,  and  the  web  sites  available  to  users  are  dictated  in  part  by  contracts  and 
 arrangements  wireless  carriers  sign  with  content  providers.  421  AT&  T  Wireless,  on  the  other  hand,  allows 
 users  who  subscribe  to  their  premium  service  to  type  any  web  site  address  into  their  phone.  422  Even  when 
 the  full  array  of  available  content  has  been  predetermined  by  carriers,  users  have  some  flexibility  through 
 customizing  their  mobile  handset  screens.  Mobile  telephone  carriers  often  allow  wireless  web  users  to 
 customize  their  mobile  handset  screens,  so  that  they  can  connect  to  more  easily  to  the  web  sites  they  find 
 most  relevant.  423  ALLTEL,  for  instance,  allows  customers  to  choose  one  of  four  default  screens.  424 


 At  the  end  of  2000,  over  2.5  million  people,  or  about  2.  3  percent  of  all  mobile  telephone  subscribers,  used 
 wireless  web  services.  425  Sprint  PCS  led  the  sector  with  over  one  million  users.  426  Sprint  PCS  claims  that 
 80  percent  of  the  handsets  it  offers  are  web-  enabled,  and  approximately  10  percent  of  its  total  voice 
 subscribers  are  using  web  services.  427  Verizon  Wireless  and  AT&  T  Wireless  are  the  next  largest  wireless 
 web  providers,  claiming  750,000  and  459,000  wireless  web  users,  respectively.  428 


 421  Dan  Meyer,  Speed  Bumps;  Limits  Of  Wireless  Web  Stifle  Early  Growth,  RCR  WIRELESS  NEWS,  Jan.  29, 
 2001,  at  16.  Industry  speculation  estimates  AOL  paid  Sprint  PCS  $50  million  for  top  billing  on  subscribers 
 screens. 


 422  Users  view  specially  designed  content  when  they  surf  to  wireless-  enabled  web  sites.  For  web  sites  that 
 have  not  been  wireless-  enabled,  some  text  information  is  usually  available.  AT&  T  Wireless,  AT&  T  Wireless 
 Services    AT&  T  Digital  PocketNet  Service    Data  Plans  (date  visited  May  17,  2001) 
 <http://  www.  attws.  com/  personal/  exployre/  pocketnet/  data_  plans.  html>.  Telephone  message  from  Danielle  Perry, 
 AT&  T  Wireless,  May  17,  2001. 


 423  ALLTEL  Lavishes  Users  With  Choices;  Gives  Up  Sweetheart  Content  Deals,  CT  WIRELESS,  Aug.  25, 


 2000,  available  in  2000  WL  6392363;  Sprint  Introduces  My  Wireless  Web,  A  Personal  Page  to  Manage 
 Wireless  Phone  Content,  News  Release,  Sprint  PCS,  Oct.  3,  2000;  Wireless  Internet  Access  Gets  Personal,  News 
 Release,  Verizon  Wireless,  Aug.  21,  2000. 


 424  ALLTEL  Offers  First  Ready-  to-  Use  Wireless  Internet  Service;  Web  Unwired  Gives  Customers  Freedom 
 to  Customize  Service,  News  Release,  ALLTEL,  Aug.  23,  2000. 
 425  There  were  approximately  110  million  wireless  subscribers  by  year-  end  2000.  See  Section  II.  A.  1.b(  i), 
 Subscriber  Growth,  supra,  and  note  323,  supra. 
 426  Tim  Paradis,  Sprint  PCS  Tops  1M  Wireless  Web  Customers,  DOW  JONES  NEWSWIRES,  Jan.  8,  2001;  Arthur 
 B.  Krause,  Charles  Levine  and  Kurt  Fawkes,  SprintPCS  Group  4q00  Results  Conference  Call,  Sprint  PCS,  Feb.  1, 
 2001;  Sprint  Hits  One  Million  Mobile  Users  Nationwide  on  the  Sprint  PCS  Wireless  Web,  News  Release,  Sprint 
 PCS,  Jan.  8,  2001. 


 427  Arthur  B.  Krause,  Charles  Levine  and  Kurt  Fawkes,  SprintPCS  Group  4q00  Results  Conference  Call, 
 Sprint  PCS,  Feb.  1,  2001. 
 428  Verizon  Communications,  Inc.,  Verizon  Communications  Investor  Quarterly  4Q  00,  Feb.  1,  2001;  AT&  T 
 Wireless  Group,  AT&  T  Wireless  Group  Earnings  Commentary,  Jan.  29,  2001. 
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 Sprint  PCS  and  Verizon  Wireless  began  offering  wireless  web  access  in  1999.  429  Both  carriers  continued 
 to  develop  and  enhance  their  offerings  during  2000.  As  of  January  2001,  Sprint  PCS  offered  18  Internet-ready 
 phones  to  its  customers,  430  more  than  any  other  carrier.  Also  during  2000,  Verizon  Wireless 
 expanded  its  mobile  data  service  areas  and  now  offers  wireless  web  services  in  more  than  80  cities 
 nationwide.  431  Both  carriers  offer  similar  wireless  web  pricing  plans.  Under  these  plans,  customers  pay  an 
 additional  monthly  fee  for  Internet  access,  and  the  Internet  access  minutes  are  deducted  from  the  customers 
 minutes  included  in  their  monthly  service  plans.  If  customers  exceed  their  allotted  monthly  minutes,  they 
 must  pay  per-  minute  airtime  charges  for  wireless  web  or  voice  service.  432  This  type  of  pricing  plan,  which 
 is  also  offered  by  other  carriers,  ranges  from  $6  to  $14  per  month  for  wireless  web  access.  433 


 AT&  T  Wireless  and  Nextel  initiated  mobile  web  service  during  the  second  quarter  of  2000.  434  Both 
 companies  offer  free  wireless  web  services;  meaning  their  customers  pay  no  additional  monthly  charge 
 (beyond  voice  service)  for  basic  wireless  web  access,  and  wireless  web  usage  is  not  deducted  from  their 
 monthly  bucket  of  voice  minutes.  In  addition,  AT&  T  Wireless  and  Nextel  also  offer  enhanced  mobile 
 Internet  services  for  a  monthly  fee  with  features  such  as  e-  mail,  contact  lists,  and  calendar.  435  AT&  T 
 Wireless  estimates  that  about  15  to  20  percent  of  its  wireless  web  users  are  paying  for  these  enhanced 
 services.  436 


 ALLTEL  and  Cingular  Wireless  began  offering  wireless  web  services  during  the  third  quarter  of  2000,  437 
 and  VoiceStream  rolled  out  wireless  web  service  in  a  limited  number  of  markets  at  the  end  of  2000.  438 


 429  Hilary  Smith,  Dispatch,  Data  to  Drive  Carrier  Differentiation,  RCR  RADIO  COMMUNICATIONS  REPORT, 
 Oct.  25,  1999,  available  in  1999  WL  28240970;  Bell  Atlantic  Mobile  Introduces  New,  Simple  Choice  for  Wireless 
 Internet,  E-  Mail  Access,  News  Release,  Verizon  Wireless,  Nov.  8,  1999. 


 430  Sprint  and  Unplugged  Games,  Inc.  to  Launch  New  Wireless  Games  On  the  Sprint  PCS  Wireless  Web, 
 News  Release,  Sprint  PCS,  Jan.  30,  2001. 
 431  Verizon  Wireless,  Welcome  To  Verizon  Wireless  (visited  Jan.  24,  2001) 
 <http://  www.  verizonwireless.  com/  mobileweb/  mw_  coverage.  html>. 
 432  In  addition  to  paying  monthly  service  fees  and  airtime  charges,  all  mobile  telephone  Internet  customers 
 must  purchase  new  Internet-  ready  handsets. 
 433  See  Appendix  D,  Table  4,  at  D-  6. 


 434  AT&  T  Wireless  Services  Introduces  Free,  Unlimited  Access  To  The  Wireless  Internet,  News  Release, 
 AT&  T  Wireless,  May  17,  2000;  Nextel  Introduces  Nextel  Online(  SM):  Wireless  Internet  Service  for  Business, 
 News  Release,  Nextel,  Apr.  25,  2000. 


 435  AT&  T  Wireless  Services  Introduces  Free,  Unlimited  Access  To  The  Wireless  Internet,  News  Release, 
 AT&  T  Wireless,  May  17,  2000;  Nextel,  Nextel  Rates  (visited  Feb.  23,  2001) 
 <http://  www.  nextel.  com/  rates/  rates.  shtml>. 


 436  AT&  T  Wireless  4Q  2000  Earnings  Conference  Call,  AT&  T  Wireless,  Jan.  29,  2001. 


 437  ALLTEL  Offers  First  Ready-  to-  Use  Wireless  Internet  Service;  Web-  Unwired  Gives  Customers  Freedom 
 to  Customize  Service,  News  Release,  ALLTEL,  Aug.  23,  2000;  Jon  Van,  Cautious  Attraction  to  Wireless  Web, 
 CHICAGO  TRIBUNE,  Oct.  19,  2000,  available  in  2000  WL  3722847. 


 438  2001  Strategis  Mobile  Data  Report,  at  43. 
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 During  the  first  quarter  of  2001,  Cingular  Wireless  and  ALLTEL  offered  free  wireless  web  service  for  a 
 limited  time  to  new  customers.  439  Otherwise,  all  three  companies  offer  pricing  plans  similar  to  those  of 
 Sprint  PCS  and  Verizon  Wireless. 


 (ii)  SMS 
 SMS  provides  the  ability  to  send  and  receive  text  messages  to  and  from  mobile  handsets  with  message 
 length  ranging  from  120  to  256  characters.  440  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  from  3  billion  messages  sent  in  December 
 1999  to  15  billion  messages  in  December  2000.  441 


 Two-  way  SMS  was  not  introduced  in  the  United  States  until  2000.  VoiceStream  was  the  first  to  offer  this 
 service,  beginning  in  May  2000.  442  Verizon  Wireless  and  AT&  T  Wireless  introduced  two-  way  SMS 
 services  during  the  fourth  quarter  of  2000.  443  More  recently,  TeleCorp  began  offering  two-  way  SMS  in 
 limited  areas  on  its  network  during  the  first  quarter  of  2001.  444  VoiceStream  now  offers  an  SMS-  like 
 service  called  e-  notes;  e-  notes  allows  VoiceStream  subscribers  to  send  short  e-  mail  messages  to  other 
 VoiceStream  subscribers,  to  any  wireless  phone  with  an  e-  mail  address  and  to  any  Internet  e-  mail  address.  445 


 Pricing  plans  for  SMS  vary  by  mobile  telephone  carrier,  and  are  incurred  in  addition  to  monthly  voice 
 and/  or  wireless  web  service  plan  fees.  Subscribers  typically  pay  different  prices  to  send  and  receive 
 messages,  although  providers  often  charge  a  fixed  monthly  fee  for  a  set  number  of  messages.  446  Both 


 439  ALLTEL  offers  wireless  Internet  in  Mobile,  Pensacola  areas,  News  Release,  ALLTEL,  Jan.  29,  2001; 
 Cingular,  My  Wireless  Window    Wireless  Internet    Pricing  (visited  Feb.  2,  2001) 
 <http://  www.  mywirelesswindow.  com/  myww/  pricing>. 


 440  Andrew  M.  Seybold,  Short  Messaging  Service  (SMS),  MOTHERING  MAGAZINE,  June  25,  1999.  GSM 
 networks  permit  messages  of  160  characters,  CDMA  permits  256  characters,  and  iDEN  allows  140  characters. 
 SSB  Report,  at  30;  Verizon  Wireless  Introduces  Mobile  Messenger(  SM)  in  Texas  and  Coast  to  Coast;  Let  Your 
 Fingers  Do  the  Talking  With  Two-  Way  Text  Messaging,  News  Release,  Verizon  Wireless,  Jan.  29,  2001.  U.  S. 
 carriers  have  set  varying  character  limits.  For  example,  Verizon  Wireless  limits  users  to  120  characters. 


 441  3  Billion  G-  Mails  in  December  99;  Short  Messages  Hit  the  Mark  For  Consumers,  News  Release,  GSM 
 Association,  Feb.  2,  2000;  More  Than  200  Billion  GSM  text  messages  forecast  for  full  year  2001,  News  Release, 
 GSM  Association,  Feb.  12,  2001. 


 442  VoiceStream  Wireless  Launches  Wireless  Internet  Services,  News  Release,  VoiceStream,  May  10,  2000. 


 443  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. 


 444  TeleCorp  PCS  Introduces  Two-  Way  Short  Messaging  Service,  News  Release,  TeleCorp,  Feb.  27,  2001. 


 445  VoiceStream,  VoiceStream    products  &  services  (visited  Feb.  28,  2001) 
 <http://  www.  voicestream.  com/  products/  services/  atstream.  asp>. 
 446  In  addition  to  paying  service  plan  fees,  customers  must  also  purchase  handsets  capable  of  text  messaging. 
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 Verizon  Wireless  and  AT&  T  Wireless  offer  two  SMS  pricing  plans.  Verizon  Wireless  offers  customers  a 
 plan  for  $2.99  per  month  to  send  and  receive  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.  447 
 AT&  T  Wireless  offers  a  plan  that  allows  subscribers  to  receive  250  messages  for  free  and  pay  $0.10  per 
 sent  or  additional  received  messages.  Alternatively,  customers  can  pay  $4.99  for  500  sent  or  received 
 messages  and  $0.  10  per  additional  message.  448 


 At  the  end  of  2000,  Sprint  PCS  began  offering  AOL  Instant  Messenger,  an  SMS-  type  service,  to  its  mobile 
 customers.  449  Instant  messaging  (  IM)  services,  such  as  AOL  Instant  Messenger  (  AIM),  enable  users  to 
 send  and  receive  messages  within  a  community  of  users,  creating  a  chat-  style  atmosphere,  whereas  SMS  is 
 communication  between  two  individuals.  450  Sprint  PCS  phones  give  AIM  users  functions  similar  to  those 
 offered  on  PCs.  From  their  Sprint  PCS  mobile  phone,  an  AIM  user  is  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  Sprint  PCS  mobile  phone.  451  VoiceStream  has  also  partnered  with  AOL  to  deliver  AIM  service  to 
 its  customers  starting  in  May  2001.  452 


 (iii)  E-  mail 
 As  an  enhancement  to  SMS  and  wireless  web  services  the  seven  mobile  telephone  carriers  discussed  in 
 section  II.  B.  2.  a.  offer  e-  mail  access  via  wireless  devices.  E-  mails  can  be  sent  and  received  using  a  mobile 
 handset.  Customers  are  assigned  an  e-  mail  address  that  can  be  customized  and  maintained  using  their 
 mobile  device  or  through  a  wired  Internet  connection.  Each  of  the  mobile  telephone  carriers,  except 
 VoiceStream,  bundles  e-  mail  and  related  functions  with  wireless  web  service,  and  therefore  does  not  charge 
 for  e-  mail  separately.  VoiceStream  offers  e-  mail  as  part  of  its  e-  notes  service,  discussed  above.  For 
 example,  Nextel  allows  its  paid  wireless  web  customers  to  access  e-  mail  accounts  from  their  mobile 
 phones.  Users  can  access  a  select  group  of  Internet  Service  Provider  e-  mail  accounts,  such  as  Earthlink, 
 Inc.  (  Earthlink),  Mindspring,  and  Prodigy.  In  addition,  Nextel  users  can  access  e-  mail  accounts  that  use 
 POP3  protocol.  453 


 447  Verizon  Wireless  Introduces  Mobile  Messenger(  SM)  in  Texas  and  Coast  to  Coast;  Let  Your  Fingers  Do 
 the  Talking  With  Two-  Way  Text  Messaging,  News  Release,  Verizon  Wireless,  Jan.  29,  2001. 
 448  AT&  T  Wireless  Brings  the  International  Text  Messaging  Craze  to  the  U.  S.,  News  Release,  AT&  T 
 Wireless,  Oct.  17,  2000. 
 449  Sprint  and  America  Online  Launch  the  AOL  Instant  Messenger  Service  on  the  Sprint  PCS  Wireless  Web, 
 News  Release,  Sprint  PCS,  Oct.  19,  2000. 
 450  Devine  Kofiloto  and  Mike  Woolfrey,  SMS    unexploited  potential  Messaging  conference  hears,  EMC 
 Market  Data,  Jan.  31,  2001. 
 451  eCare,  E-  mail  correspondence,  Sprint  PCS,  May  16,  2001. 


 452  Jason  Philyaw,  VoiceStream  To  Offer  AOL  Instant  Message  To  Customers,  DOW  JONES  NEWSWIRE,  May 
 21,  2001. 
 453  POP3  is  a  protocol  for  receiving  e-  mail  that  is  used  by  many  companies  and  ISPs.  Nextel,  Nextel   
 Mobile  Email  (visited  Mar.  29,  2001)  <http://  www.  nextel.  com/  wireless/  email/  emailandmore.  shtml>. 
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 c.  Handheld  Devices 
 Several  handheld  PDA  devices  currently  offer  users  a  wireless  connection  to  the  Internet,  either  through  a 
 built-  in  wireless  modem,  through  a  separate  wireless  modem  attachment,  or  by  attaching  a  mobile  telephone 
 to  the  PDA.  454  Like  web-  enabled  mobile  phones,  these  devices  provide  users  with  access  to  e-  mail  and  web 
 content  455  while  mobile.  Handheld  devices  generally  have  larger  screens  and  greater  functionality  456  than 
 mobile  telephones  but  do  not  have  a  built-  in  voice  component.  457 


 The  three  principal  categories  of  handheld  devices  with  a  wireless  Internet  connection  are:  1)  devices  that 
 use  the  PalmOS  operating  system,  including  the  Palm  devices  and  the  Handspring  Visor;  2)  devices  made 
 by  RIM  that  run  RIMs  BlackBerry  service;  and  3)  devices  that  run  Microsofts  Pocket  PC  or  Windows 
 CE  operating  system.  The  Fifth  Report  discussed  the  first  three  categories  of  devices.  New  to  the  section 
 this  year  is  the  Handspring  Visor,  which  can  now  achieve  wireless  Internet  access  with  the  attachment  of  a 
 wireless  modem  card,  an  advanced  messaging  device,  or  a  mobile  phone.  Since  the  writing  of  the  Fifth 
 Report,  manufacturers  Palm,  RIM,  and  Pocket  PC  have  begun  to  offer  additional  handheld  devices  with 
 wireless  Internet  connectivity  and  have  expanded  their  Internet-  based  content  and  services.  Palm  claimed  a 
 61  percent  market  share  of  all  handheld  retail  sales  made  during  January  2001,  Handspring  claimed  26 
 percent,  and  Pocket  PC  manufacturers  claimed  a  combined  9  percent.  458 


 (i)  PalmOS  Devices 
 There  are  two  handheld  devices  manufacturers  who  run  the  PalmOS  operating  system:  Palm  and 
 Handspring.  Palm  currently  offers  three  ways  to  access  the  Internet  wirelessly  with  its  different  handheld 
 models.  First,  the  Palm  VIIx,  459  an  updated  version  of  the  Palm  VII  discussed  in  the  Fifth  Report,  has  a 


 454  See  Appendix  D,  Table  9,  at  D-  11  for  an  overview  of  handheld  devices  with  mobile  Internet  access. 
 455  As  with  Internet  access  via  mobile  telephones,  the  content  available  on  handheld  devices  with  mobile 
 Internet  access  differs  from  the  content  available  with  wireline  web  access  and  varies  by  device  and  wireless 
 Internet  service  provider.  See  Section  II.  B.  2.  b(  i),  Wireless  Web.  The  type  of  mobile  Internet  content  available  on 
 various  handheld  devices  is  described  below. 


 456  Handheld  PDAs  generally  include  the  PDA  functions  described  in  note  320,  supra. 


 457  One  handheld  device  discussed  below,  the  Handspring  Visor,  allows  users  to  attach  a  VisorPhone  to  the 
 handheld  device,  thereby  giving  them  mobile  voice  and  Internet  access.  See  Section  II.  B.  2.  c(  i),  PalmOS  Devices, 
 infra. 


 458  R.  Gardner,  Handheld  Devices:  The  PDA  Weekly,  Salomon  Smith  Barney,  Feb.  23,  2001,  at  2.  These 


 market  share  percentages  include  only  point-  of-  sale  cash  register  sales  made  at  retailers  such  as  CompUSA,  Office 
 Depot,  etc.  plus  certain  mail  order  catalogs.  It  does  not  include  the  other  sales  channels  used  by  RIM;  therefore, 
 sales  of  RIMs  blackberry  devices  are  not  included.  E-  mail  communication  with  Cynthia  S.  Hiponia,  Associate, 
 Salomon  Smith  Barney,  May  25,  2001. 


 459  At  the  beginning  of  2001,  the  list  price  of  the  Palm  VIIx  was  $399,  an  11  percent  decrease  from  the  $450 


 price  of  the  Palm  VII  in  the  spring  of  2000.  In  addition,  in  February  2001,  Palm  began  offering  a  $100  rebate  on 
 the  Palm  VIIx  with  a  12-  month  subscription  to  Palm.  net.  See  R.  Gardner,  Handheld  Devices:  The  PDA  Weekly, 
 Salomon  Smith  Barney,  Feb.  23,  2001,  at  1;  Palm,  Palm  VII  Series  (visited  Mar.  16,  2001) 
 <https://  store.  palm.  com/  Catalog/>;  Fifth  Report,  at  17723.  Palm  has  made  few  changes  to  its  Palm.  Net  monthly 
 service  pricing  since  the  Fifth  Report.  For  $44.99  per  month,  subscribers  can  get  unlimited  Internet  access,  and  for 
 $9.99  per  month,  they  can  download  50  kilobytes  (or  about  150  screens)  of  content.  Palm  changed  its  mid-  level 
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 built-  in  wireless  modem  that  gives  Palm  VIIx  and  Palm  VII  users  access  the  Internet  at  speeds  of  9  kbps 
 through  Palms  Palm.  Net  service.  460  Palm.  Net  includes  web  clipping  applications,  which  allow  users  to 
 view  over  580  web-  clipped  Internet  sites,  461  and  mobile  e-  mail  access  to  a  Palm.  net  account.  462  Palm.  Net 
 service  connects  to  the  data  network  of  Cingular  Interactive  and  can  be  used  in  260  cities  nationwide  with 
 no  roaming  charges.  463 


 Users  of  Palms  other  PDAs,  including  the  Palm  m105,  Palm  III,  and  Palm  V  series,  can  connect  to  the 
 Internet  by  attaching  a  mobile  phone  or  wireless  modem  to  their  devices,  but  do  not  receive  Palms 
 Palm.  net  service.  However,  Palm  users  who  connect  to  the  Internet  by  attaching  a  mobile  phone  (with 
 either  a  cable  or  infrared  signal)  464  can  reach  over  450  web-  clipped  sites,  465  send  and  receive  e-  mail 
 messages  with  Palms  MultiMail  software  and  a  Hotmail,  Earthlink,  or  Yahoo!,  Inc.  (  Yahoo)  account,  466 
 and,  if  they  use  a  GSM  handset,  can  send  and  receive  text  messages  with  SMS.  467  Palm  III  and  Palm  V 


 pricing  plan  from  $39.95  for  300  kilobytes,  to  $24.99  for  150  kilobyes  (or  about  450  screens).  Palm,  Palm.  Net 
 Service  Plans  (visited  Mar.  16,  2001)  <http://  www.  palm.  com/  products/  palmvii/  serviceplans.  html>. 


 460  Marge  Brown,  Palm/  Handspring:  Services,  PC  MAGAZINE,  Mar.  29,  2001,  available  in  2001  WL 
 4946173. 
 461  Web  clipping  allows  Palm  devices  to  display  small  amounts  of  text  information  from  popular  Internet  sites 


 that  have  been  specially  designed  for  the  proprietary  Palm  platform.  Users  can  access  information  from  these  sites 
 but  cannot  surf  beyond  them.  See  Fifth  Report,  at  17723.  The  web  clipping  applications  of  Palms  content 
 partners  come  pre-  loaded  on  the  Palm  VIIx  and  give  users  access  to  sites  such  as  Yahoo!,  E*  Trade,  Travelocity, 
 ABCNEWS.  com,  and  ESPN.  com.  See  Palm,  Web  Clipping  Applications  (visited  Mar.  16,  2001) 
 <http://  www.  palm.  com/  products/  palmvii/  webclipping.  html>;  Palm,  Web  Clipping  Application  Partners  (visited 
 Mar.  16,  2001)  <http://  www.  palm.  com/  products/  palmvii/  qa_  logos.  html>. 


 462  Palm,  Palm.  Net  Wireless  Communication  Service  (visited  Mar.  16,  2001) 
 http://  www.  palm.  com/  products/  palmvii/  wireless.  html>.  Palm.  nets  e-  mail  product  is  called  iMessenger.  With 
 iMessenger,  Palm.  Net  subscribers  can  automatically  receive  the  first  500  characters  of  each  message  sent  to  their 
 personal  Palm.  Net  e-  mail  account,  and  then  have  the  option  to  read  the  next  500  characters,  download  the  entire 
 message,  or  read  it  later.  Palm,  iMessenger  Wireless  Internet  Messaging  (visited  Mar.  16,  2001) 
 <http://  www.  palm.  com/  products/  palmvii/  imessenger.  html>. 


 463  See  Fifth  Report,  at  17723;  Palm,  Palm.  Net  Service  Coverage  (visited  Apr.  2,  2001) 
 <http://  www.  palm.  com/  products/  palmvii/  map.  html>. 
 464  Users  who  connect  through  a  mobile  phone  must  also  install  Palms  Mobile  Internet  Kit  software.  Palm, 
 Palm  Mobile  Internet  Kit  (visited  Mar.  16,  2001)  <http://  www.  palm.  com/  software/  mik/>;  Palm,  Palm  m105 
 Handheld  (visited  Mar.  16,  2001)  <https://  store.  palm.  com/  Catalog/>.  See  Palm,  Palm  Mobile  Internet  Kit  (visited 
 Mar.  16,  2001)  <http://  www.  palm.  com/  software/  mik/  phone.  html>  for  a  list  of  mobile  handsets  that  can  be  attached 
 to  Palm  devices,  and  the  type  of  connection  (either  cable  or  infrared)  that  each  uses. 


 465  Palm,  Palm  Mobile  Internet  Kit  FAQs  (visited  Mar.  16,  2001) 
 <http://  www.  palm.  com/  software/  mik/  faq.  html#  3>;  Palm,  Palm  Mobile  Internet  Kit  (visited  Mar.  16,  2001) 
 http://  www.  palm.  com/  software/  mik/>. 


 466  Id. 


 467  With  Palm  devices,  users  can  store  and  retrieve  their  SMS  messages.  Palm,  Palm  Mobile  Internet  Kit 
 FAQs  (visited  Mar.  16,  2001)  <http://  www.  palm.  com/  software/  mik/  faq.  html#  3>.  When  users  are  piggybacking  on 
 the  mobile  telephones  mobile  Internet  connection,  many  factors  associated  with  the  connections,  including  speed, 
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 series  users  can  also  connect  to  the  Internet  by  attaching  a  wireless  modem  card,  such  as  those  made  by 
 Minstrel,  to  their  handheld  devices.  468  Wireless  modem  card  users  can  receive  mobile  access  to  web 
 content  and  e-  mail  messages,  as  well  as  access  to  corporate  intranets  and  databases,  at  speeds  of  around 
 19.2  kbps.  469  Palm  V  Minstrel  users  can  also  choose  between  GoAmerica  470  or  OmniSky  Corporation 
 (  OmniSky)  471  as  their  wireless  Internet  service  provider  (  WISP).  472 


 While  Handsprings  PDA,  the  Visor,  uses  the  same  operating  system  as  the  Palm  devices,  the  Visor  has  a 
 Springboard,  a  place  on  the  device  where  users  can  attach  various  modules.  Springboard  modules  include 
 attachments  used  for  mobile  communication  as  well  as  other  types  of  attachments,  such  as  digital  cameras, 
 MP3  players,  Global  Positioning  System  (  GPS)  devices,  games,  and  e-  books.  473  The  Visor  can  access 
 the  web  and  e-  mail  wirelessly  with  the  attachment  of  one  of  three  different  types  of  Springboard  modules:  a 


 reliability,  and  service  pricing,  are  dependent  upon  the  mobile  telephone  carrier  providing  the  Internet  access. 
 Palm  does  not  charge  a  monthly  service  fee  for  this  type  of  access;  however,  Palm  Mobile  Internet  Kit  users  must 
 pay  whatever  wireless  web  access  fees  their  mobile  telephone  carrier  charges.  Palm,  Palm  Mobile  Internet  Kit 
 FAQs  (visited  Mar.  16,  2001)  <http://  www.  palm.  com/  software/  mik/  faq.  html#  3>.  See  Section  II.  B.  2.  b,  Mobile 
 Telephone  Operator  Offerings,  supra. 


 468  Palm,  Wireless  Internet  and  E-  mail  (visited  Mar.  16,  2001)  <http://  www.  palm.  com/  wireless/>.  The 
 Minstrel  V  and  Minstrel  III  work  with  the  Palm  V  and  Palm  III,  respectively.  Both  Minstrel  modems  cost  $369. 
 All  of  Minstrel  wireless  modems  are  made  by  Novatel  Wireless,  Inc.  (  Novatel)  and  use  CDPD  networks  for 
 mobile  Internet  access.  Novatel,  Minstrel  V  (visited  Mar.  16,  2001) 
 <http://  www.  novatelwireless.  com/  palmtop/  minstrel5.  html>;  Novatel,  Minstrel  III  (visited  Mar.  16,  2001) 
 <http://  www.  novatelwireless.  com/  palmtop/  minstrel3.  html>. 


 469  Novatel,  Minstrel  V  (visited  Mar.  16,  2001)  <http://  www.  novatelwireless.  com/  palmtop/  minstrel5.  html>; 
 Novatel,  Minstrel  III  (visited  Mar.  16,  2001)  <http://  www.  novatelwireless.  com/  palmtop/  minstrel3.  html>.  In  the 
 future,  Palm  and  Motient  plan  to  offer  a  Palm  V  cradle  that  will  have  always-  on  wireless  Internet  access  to 
 Motients  wireless  data  network.  Motient  to  Provide  Palm  Users  with  Wireless  Connectivity,  PR  NEWSWIRE,  Feb. 
 7,  2001. 


 470  GoAmericas  Go.  Web  gives  users  access  to  a  new  Go.  Web  e-  mail  account  or  to  an  existing  web-  based  e-mail 
 account,  and  to  nearly  any  web  site  that  has  been  designed  for  use  on  a  mobile  device.  GoAmerica,  Go.  Web 
 Service  (visited  Mar.  19,  2001)  <http://  www.  goamerica.  com/  goweb/>.  Go.  Web  allows  users  to  customize  the 
 content  they  wish  to  receive  through  its  MyGo.  Web  portal.  GoAmerica,  Go.  Web  Service  (visited  Mar.  19,  2001) 
 <http://  www.  goamerica.  com/  goweb/>. 


 471  OmniSky  provides  e-  mail  access  to  an  existing  web-  based  or  Microsoft  Outlook  e-  mail  account. 


 OmniSky,  Wireless  E-  mail  &  Internet  (visited  Mar.  19,  2001)  <http://  www.  omnisky.  com/  products/>.  Like 
 GoAmerica,  OmniSky  allows  users  to  access  a  variety  of  web  content  that  has  been  designed  for  mobile  devices  and 
 to  personalize  the  content  they  receive  with  My  OmniSky.  OmniSky,  Wireless  E-  mail  &  Internet  (visited  Mar.  19, 
 2001)  <http://  www.  omnisky.  com/  products/>. 


 472  OmniSky,  Wireless  E-  mail  &  Internet  (visited  Mar.  19,  2001)  <http://  www.  omnisky.  com/  products/>; 


 GoAmerica,  Novatel  Wireless  Minstrel  V  (visited  Mar.  19,  2001) 
 <http://  www.  goamerica.  net/  showcase/  minstrel5/>.  Like  many  landline  ISPs,  WISPs  GoAmerica  and  OmniSky  are 
 neither  carriers  nor  equipment  manufacturers  but  instead  provide  their  subscribers  with  access  to  the  Internet, 
 including  web  content  and  e-  mail,  from  various  mobile  devices  discussed  in  Section  II.  B.  2.  c. 


 473  Handspring,  Springboard  Modules  (visited  Mar.  18,  2001) 


 <http://  www.  handspring.  com/  products/  sbmodules/  index.  jhtml>. 
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 CDPD  wireless  modem  card  such  as  the  Minstrel  S,  a  Glenayre  Technologies,  Inc.  (  Glenayre)  @ctivelink 
 advanced  messaging  module,  or  the  VisorPhone.  474  Visor  users  can  choose  from  three  wireless  Internet 
 services  to  use  with  the  Minstrel  wireless  modem:  GoAmerica,  OmniSky,  or  YadaYada.  475  Glenayres 
 @ctivelink  module  allows  Visor  users  to  send  and  receive  e-  mail  messages,  and  receive  web  content 
 updates,  such  as  sports  scores,  weather  reports,  and  stock  quotes.  476  The  @ctivelink  module  connects  to 
 Arch  Wirelesss  two-  way  wireless  data  network.  477  The  VisorPhone  module  allows  the  Visor  to  function  as 
 a  mobile  telephone  and  gives  users  a  mobile  voice  as  well  as  data  connection.  VisorPhone  users  can  check 
 e-  mail,  send  and  receive  SMS  messages,  and  access  the  web  at  14.  4  kbps.  478  The  VisorPhone  connects  to 
 the  GSM  networks  operated  by  VoiceStream  and  Cingular  Wireless.  479 


 (ii)  RIM  Devices  and  BlackBerry  Service 
 RIM  currently  manufactures  and  sells  four  models  of  handheld  devices    the  RIM  957,  the  RIM  857,  the 
 RIM  950,  and  RIM  850    all  of  which  connect  to  the  Internet  wirelessly  using  built-  in  wireless  modems.  480 
 The  RIM  950  and  RIM  850  are  similar  in  size  to  two-  way  advanced  messaging  devices,  while  the  RIM 
 857  and  RIM  957  are  similar  to  the  handheld  PDA  devices  discussed  in  this  section.  All  four  devices  have 
 PDA  organizer  software  and  full  QWERTY  keypads.  RIM  offers  mobile  Internet  access  service  for  the 
 RIM  850  and  RIM  857  over  Motients  DataTAC  network,  while  the  RIM  950  and  RIM  957  operate  using 
 Cingular  Interactives  Mobitex  network.  481 


 474  Handspring,  Springboard  Modules  Communications  and  Wireless  (visited  Mar.  18,  2001) 
 <http://  www.  handspring.  com/  products/  sbmodules/  CommunicationsAndWireless.  jhtml>;  Handspring,  Give  Your 
 Visor  a  Dial  Tone  (visited  Mar.  18,  2001)  <http://  www.  handspring.  com/  products/  visorphone/  index.  jhtml>. 


 475  Handspring,  Springboard  Modules  Communications  and  Wireless  (visited  Mar.  18,  2001) 
 <http://  www.  handspring.  com/  products/  sbmodules/  CommunicationsAndWireless.  jhtml>. 
 476  Handspring,  @ctivelink  Wireless  Messaging  Module  (visited  Mar.  18,  2001) 
 <http://  www.  handspring.  com/  products/  sbmodules/  activelinkdetails.  jhtml>.  Glenayre  announced  in  May  2001  that 
 it  planned  to  exit  the  wireless  messaging  business  over  the  coming  year  and  instead  focus  on  providing  access  to 
 voicemail  and  e-  mail  via  the  Internet  and  cellular  phones.  Paging  Firm  Glenayre  to  Cut  700  Jobs,  REUTERS,  May 
 23,  2001. 


 477  Arch  Wireless  Introduces  the  Arch  Webster  300  With  the  Glenayre  @ctiveLink  Module,  PR 
 NEWSWIRE,  Mar.  21,  2001.  See  Section  II.  B.  2.a,  Paging/  Messaging,  supra. 
 478  Handspring,  Give  Your  Visor  a  Dial  Tone  (visited  Mar.  18,  2001) 


 <http://  www.  handspring.  com/  products/  visorphone/  index.  jhtml>. 
 479  Handspring,  VisorPhone  FAQs  (visited  Mar.  18,  2001) 
 <http://  www.  handspring.  com/  products/  visorphone/  faqs.  jhtml>;  Rob  Pegoraro,  Handheld  Meets  Phone,  With 
 Promising  Results,  THE  WASHINGTON  POST,  Mar.  9,  2001.  The  Minstrel  wireless  modems  and  VisorPhone  cost 
 $299  each,  and  the  @ctivelink  module  costs  $179.  Handspring,  Springboard  Modules  Communication  and 
 Wireless  (visited  Apr.  24,  2001) 
 <http://  www.  handspring.  com/  products/  sbmodules/  CommunicationsAndWireless.  jhtml>. 


 480  RIM,  Available  Services  (visited  Mar.  18,  2000) 
 <http://  www.  rim.  net/  products/  handhelds/  services/  index.  shtml>. 
 481  See  Section  II.  B.  2.  d,  Dedicated  Data  Networks,  infra,  for  a  discussion  of  Motient  and  Cingular 
 Interactive. 
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 68 
 All  of  RIMs  devices  include  RIMs  BlackBerry  e-  mail  service.  482  BlackBerry  allows  users  to  receive, 
 compose,  send,  file,  and  filter  messages  from  existing  e-  mail  accounts  while  mobile.  RIM  offers  two 
 versions  of  Blackberry    one  for  businesses  and  one  individual  consumers.  483  BlackBerry  is  available  from 
 RIM,  as  well  as  several  resellers,  including  Cingular  Interactive,  Motient,  GoAmerica,  Compaq  Computer 
 Corporation  (  Compaq),  Earthlink,  Amazon.  com,  Inc.,  Handango,  Inc.,  Aether  Systems,  Inc.,  and 
 Vaultus,  Inc.,  many  of  whom  offer  co-  branded  versions  of  the  BlackBerry  service.  484  Many  of  these  co-branded 
 services  include  access  to  web  content  and  intranets,  as  well  as  e-  mail.  485  In  addition  to  the 
 Blackberry  partnerships,  RIM  has  formed  a  partnership  with  AOL  in  which  AOL  offers  its  AOL  Mobile 
 Messenger  service,  which  includes  mobile  access  to  AOL  e-  mail  and  AIM,  on  RIMs  devices.  486 


 (iii)  Pocket  PC  Devices 
 As  mentioned  in  the  Fifth  Report,  Microsoft  launched  its  latest  handheld  operating  system,  Pocket  PC,  in 
 April  2000.  Pocket  PC  is  an  updated  version  of  Windows  CE  and  includes  PDA  versions  of  many  of 
 Microsofts  desktop  software  applications,  including  Word,  Excel,  Outlook,  and  Internet  Explorer.  Three 
 companies,  Hewlett-  Packard  (  HP),  Casio,  Inc.  (  Casio),  and  Compaq,  currently  manufacture  handheld 


 482  RIM,  Available  Services  (visited  Mar.  18,  2000) 
 <http://  www.  rim.  net/  products/  handhelds/  services/  index.  shtml>. 
 483  RIM,  BlackBerry  Enterprise  Solutions  (visited  Mar.  18,  2001) 
 <http://  www.  blackberry.  net/  solutions/  enterprise/  index.  shtml>;  RIM,  BlackBerry  Home/  Personal  Solutions  (visited 
 Mar.  18,  2001)  <http://  www.  blackberry.  net/  solutions/  home/  index.  shtml>;  RIM,  Wireless  E-  mail  Solutions  (visited 
 Mar.  18,  2001)  <http://  www.  blackberry.  net/  solutions/  index.  shtml>.  BlackBerry  Enterprise  Edition  is  for 
 businesses  and  BlackBerry  Internet  Edition  for  individual  customers.  Enterprise  Edition  is  designed  for  use  with 
 Microsoft  Exchange  or  Lotus  Domino  and  can  be  integrated  with  corporate  servers.  Individual  BlackBerry  e-  mail 
 service  costs  $39.99  per  month,  and  services  such  as  paging  and  North  American  roaming  cost  extra.  RIM, 
 BlackBerry  Exchange  Edition  (visited  Mar.  18,  2000)  <http://  www.  blackberry.  net/  purchase/  pricing/  us/  bbee.  shtml. 


 484  RIM,  BlackBerry  eMarketplace  (visited  Mar.  18,  2001) 
 <http://  www.  blackberry.  net/  purchase/  emarketplace/  index.  shtml>;  Research  In  Motion  Reports  45%  Sequential 
 Revenue  Growth  in  Q3,  News  Release,  RIM,  Dec.  20,  2000;  RIM,  BlackBerry  Flat-  Rate  Pricing  (visited  Mar.  18, 
 2000)  <http://  www.  blackberry.  net/  purchase/  pricing/  index.  shtml>. 


 485  Some  of  the  co-  branded  BlackBerry  services  are  only  available  on  certain  RIM  devices.  RIM,  BlackBerry 
 eMarketplace  GoAmerica  (visited  Mar.  18,  2001) 
 <http://  www.  blackberry.  net/  purchase/  emarketplace/  resellers/  us/  goamerica.  shtml>;  RIM,  BlackBerry  eMarketplace 
 Cingular  (visited  Mar.  18,  2001)  <http://  www.  blackberry.  net/  purchase/  emarketplace/  resellers/  us/  cingular.  shtml>. 
 Compaq  has  co-  branded  not  only  RIMs  BlackBerry  service,  but  two  of  its  devices  as  well.  It  has  branded  the  RIM 
 950  as  the  iPAQ  W1000  and  the  RIM  957  as  the  iPAQ  H1000,  and  offers  the  iPAQ  BlackBerry  Wireless  E-  mail 
 Solution  on  both.  RIM,  BlackBerry  eMarketplace  Compaq  (visited  Mar.  18,  2001) 
 <http://  www.  blackberry.  net/  purchase/  emarketplace/  resellers/  us/  compaq.  shtml>.  GoAmerica  has  added  its  wireless 
 Internet  service,  Go.  Web,  to  BlackBerry,  so  users  can  access  the  web  and  corporate  intranets,  as  well  as  existing  e-mail 
 accounts,  on  the  RIM  850,  RIM  950,  and  RIM  957.  RIM,  BlackBerry  eMarketplace  GoAmerica  (visited  Mar. 
 18,  2001)  <http://  www.  blackberry.  net/  purchase/  emarketplace/  resellers/  us/  goamerica.  shtml>.  The  co-  branded 
 BlackBerry  services  offered  by  Cingular  Interactive  and  Motient  are  discussed  in  Section  II.  B.  2.d,  infra. 


 486  Research  In  Motion  Reports  45%  Sequential  Revenue  Growth  in  Q3,  News  Release,  RIM,  Dec.  20,  2000; 
 America  Online  Unveils  New  AOL  Mobile  Communicator  Two-  way  Wireless  Handheld  Device,  News  Release, 
 RIM,  Nov.  30,  2000. 
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 devices  that  run  Pocket  PC  and  that  can  connect  to  the  Internet  wirelessly.  487  These  devices,  the  HP 
 Jornada,  the  Casio  E-  125,  and  the  Compaq  iPAQ,  do  not  have  built-  in  wireless  modems,  but  require 
 separate  wireless  modem  attachments  in  order  to  access  the  Internet.  The  HP  Jornada  uses  a  Minstrel  540 
 wireless  modem,  488  the  Casio  E-  125  requires  a  Nextcell  PocketSpider  modem,  489  and  the  Compaq  iPAQ 
 requires  a  PC  Card  Expansion  Pack  and  Sierra  Wireless  Aircard  300.  490  Both  the  Casio  E-  125  and  the 
 Compaq  iPAQ  use  GoAmerica  as  their  WISP.  491  HP  Jornada  users  can  choose  between  GoAmerica  or 
 OmniSky.  492 


 d.  Dedicated  Data  Networks 
 There  are  a  number  of  operators  offering  mobile  data  services  over  dedicated  data  networks.  A  number  of 
 these  networks  began  by  initially  serving  vertical  markets  such  as  asset  tracking  and  field  service  and  have 
 evolved  to  serve  horizontal  markets  such  as  messaging  and  Internet  access.  The  three  major  dedicated  data 
 network  providers  are  Motient,  Cingular  Interactive,  and  Metricom. 


 (i)  Motient 
 Motient  provides  mobile  data  services  to  a  variety  of  users  including  messaging  to  mobile  professionals,  as 
 well  as  telemetry,  transportation,  and  field  services.  493  It  operates  in  the  800  MHz  SMR  band.  494  In  April 
 2000,  RIM  announced  it  would  use  Motients  DataTAC  network  to  provide  wireless  Internet  connectivity 
 to  its  RIM  850  and  RIM  857  BlackBerry  subscribers.  495  Motient  also  co-  brands  RIMs  BlackBerry  e-  mail 
 service,  calling  it  BlackBerry  by  Motient.  In  addition,  Motient  provides  a  two-  way  messaging  and  e-  mail 
 service  called  eLink  and  recently  introduced  eLink  Fortified  with  Yahoo.  496  Through  this  service, 


 487  Microsoft,  Mobile  Devices,  Get  Connected  (visited  Mar.  16,  2001) 
 <http://  www.  microsoft.  com/  mobile/  pocketpc/  wireless/  connected.  asp>. 
 488  Novatel,  Minstrel  540  (visited  Mar.  16,  2001) 
 <http://  www.  novatelwireless.  com/  palmtop/  minstrel540.html>.  Like  the  Minstrel  V  and  Minstrel  III  discussed 
 above,  the  Minstrel  540  uses  CDPD  networks  and  transfers  data  at  speeds  of  19.  2  kbps.  Id. 


 489  Casio,  PocketSpider  GoAmerica  Wireless  Internet  Services  (visited  Mar.  16,  2001) 
 <http://  www.  casio.  com/  pocketspider/>. 
 490  Compaq,  Accessories  (visited  Mar.  16,  2001) 
 <http://  www5.  compaq.  com/  products/  handhelds/  pocketpc/  accessories.  html#  wireless>. 
 491  Microsoft,  Mobile  Devices,  Get  Connected  (visited  Mar.  16,  2001) 
 <http://  www.  microsoft.  com/  mobile/  pocketpc/  wireless/  connected.  asp>. 
 492  Id. 


 493  Motient  Corporation,  SEC  Form  10-  Q,  Nov.  14,  2000.  Motient  provides  wireless  voice  services  via  its 
 satellite  subsidiary.  Id.  Motient  was  formerly  known  as  American  Mobile  Satellite  Corporation  and  included  the 
 acquisition  of  ARDIS  Company.  Motient  Corporation,  SEC  Form  10-  Q,  May  15,  1998. 


 494  Motient  Corporation,  SEC  Form  10-  K,  Apr.  2,  2001. 


 495  2001  Strategis  Mobile  Data  Report,  at  67.  See  Section  II.  B.  2.  c(  ii),  RIM  Devices  and  BlackBerry  Service, 
 supra. 
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 subscribers  can  send  and  receive  Yahoo  mail  and  instant  messages  as  well  as  access  Yahoo  content  and 
 services.  497  GoAmerica  and  Aether  also  co-  brand  RIM  devices  using  Motients  network.  498  Finally,  Palm 
 uses  Motients  network  to  connect  its  Palm  V  and  VII  users  to  the  Internet  and  other  Palm.  net  applications.  499 


 At  year-  end  2000,  Motient  had  more  than  45,000  eLink  subscribers  compared  to  fewer  than  3,000  at  year 
 end  1999.  500 


 (ii)  Cingular  Interactive 
 Cingular  Interactive  operates  as  a  business  unit  of  Cingular  Wireless.  501  Cingular  Interactive  offers  a 
 variety  of  mobile  data  services  including  advanced  messaging  and,  similar  to  Motient,  provides  wireless 
 Internet  connectivity  for  RIM  950  and  RIM  957  BlackBerry  and  Palm  VII  handheld  devices  through  its 
 Mobitex  network  operating  in  the  900  MHz  band.  In  addition,  Fidelity  and  AOL  use  Cingular  Interactives 
 network  to  provide  services  to  wireless  devices.  502  AOL  Mobile  Communicator  permits  AOL  members  to 
 check  their  e-  mail  and  exchange  instant  messages.  503  During  2000,  Cingular  Interactive  introduced  a  co-branded 
 RIM  BlackBerry  service  called  MyBiz  Interactive  offering  messaging  and  e-  mail  services.  504 


 During  2000,  the  company  added  90,000  subscribers  on  average  per  quarter.  505  By  year  end,  the  company 
 had  more  than  doubled  its  subscriber  base,  closing  the  year  with  more  than  570,000  MyBiz  Interactive, 
 Palm.  Net,  Fidelity,  AOL  Mobile  Communicator,  and  RIM  BlackBerry  subscribers  compared  to  200,000  at 
 year  end  1999.  506 


 496  Peggy  Albright,  Motients  Big  Push  for  a  Consumer  Base,  WIRELESS  WEEK,  Jan.  15,  2001. 
 497  Motient  (visited  Mar.  14,  2001)  <http://  www.  motient.  com>. 
 498  RIM,  BlackBerry  (visited  Mar.  14,  2001) 
 <http://  www.  blackberry.  net/  purchase/  emarketplace/  resellers/  us>. 
 499  Mike  Mayor,  New  Cradle  to  Keep  Palm  Users  Turned  On,  WIRELESS  NEWS  FACTOR,  Feb.  8,  2001.  See 


 also  Section  II.  B.  2.  c(  i),  PalmOS  Devices,  supra. 
 500  Motient  Corporation,  SEC  Form  10-  K,  Apr.  2,  2001,  at  F-  5. 


 501  BellSouth  Wireless  Data  Brings  in  New  Year  with  New  Name    Cingular  Interactive,  News  Release, 
 Cingular  Interactive,  Jan.  10,  2001. 
 502  Cingular  Interactives  Subscriber  Count  Eclipses  570,000  as  Company  Celebrates  Banner  Year,  News 


 Release,  Cingular  Interactive,  Jan.  23,  2001  (  Cingular  Interactive  News  Release). 
 503  Id. 


 504  Id. 
 505  Cingular  Interactive  Introduces  Operation  Platinum  Standard  to  Continue  Meeting  Service  and  Coverage 
 Needs,  News  Release,  Cingular  Interactive,  Feb.  5,  2001. 
 506  Cingular  Interactive  News  Release. 
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 (iii)  Metricom 
 Metricom  offers  mobile  data  services  using  the  900  MHz  and  2.4  GHz  unlicensed  bands,  as  well  as  2.3 
 GHz  Wireless  Communications  Service  (  WCS)  licensed  spectrum.  The  companys  primary  service 
 offering,  Ricochet,  offers  mobile  access  to  the  Internet  and  to  corporate  networks  via  a  wireless  modem 
 attached  to  a  laptop.  507  In  the  third  quarter  of  2000,  Metricom  launched  its  new  Ricochet  service,  which 
 operates  at  average  speeds  of  128  kbps,  in  nine  markets  across  the  United  States.  508  The  new  service  is 
 now  available  in  13  markets,  including  Atlanta,  Baltimore,  Denver,  Los  Angeles,  Minneapolis,  New  York 
 City,  and  San  Francisco.  509  Metricom  continues  to  operate  its  28.  8  kbps  speed  service  in  portions  of  San 
 Francisco  and  in  the  Seattle  and  Washington,  D.  C.  metropolitan  areas  while  these  markets  are  converted  to 
 128  kbps  service.  510  Metricom  has  announced  plans  to  ultimately  launch  the  128  kbps  service  in  a  total  of 
 46  metropolitan  areas.  511  The  monthly  subscription  fee  for  Ricochets  128  kbps  service  ranges  from 
 $44.95  to  $79.95.  512 


 A  number  of  companies  resell  Metricoms  services  including  WorldCom,  Juno,  SkyTel,  UUNet,  Wireless 
 WebConnect!,  GoAmerica,  EarthLink,  and  Compaq.  513  At  the  end  of  2000,  Metricom  had  34,000 
 subscribers,  including  12,200  128  kbps  service  subscribers.  514  By  comparison,  in  1999  Metricom  had 
 29,700  subscribers,  all  of  which  were  for  its  28.8  kbps  service.  515 


 3.  Developing  Mobile  Data  Services 
 The  technologies  and  services  discussed  below  are  largely  in  development  and  not  offered  on  a  large  scale, 
 at  least  not  in  the  United  States.  As  they  evolve,  they  will  likely  play  a  larger  role  in  the  mobile  data 
 industry. 


 a.  WAP 
 Wireless  Application  Protocol,  or  WAP,  is  a  set  of  technologies  that  allows  mobile  phones,  handheld 
 PDAs,  and  other  portable  devices  to  access  the  Internet.  LM  Ericsson  Telephone  Company  (  Ericsson), 


 507  Metricom,  Inc.,  SEC  Form  10-  Q,  Nov.  13,  2000,  at  11. 
 508  Id. 
 509  Metricom,  Inc.,  SEC  Form  10-  K,  Apr.  30,  2001,  at  1. 
 510  Id. 
 511  Metricom,  Inc.,  SEC  Form  10-  Q,  Nov.  13,  2000,  at  11. 
 512  San  Diego  Gains  Competitive  Advantage,  News  Release,  Metricom,  Inc.,  May  17,  2001;  Metricom,  Get 
 Ricochet  (visited  May  22,  2001) 
 <wysiwyg://  19/  http://  www.  ricochet.  com/  ric  t_  advantage/  getricochet/  matrix_  live.  html>. 


 513  Metricom,  Metricom  Partners  and  Resellers  (visited  Apr.  25,  2001) 


 <http://  www.  metricom.  com/  partners_  resellers/  index.  html>. 
 514  Metricom  Reports  Fourth  Quarter  2000  Results,  News  Release,  Metricom,  Feb.  8,  2001. 


 515  Id. 
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 Nokia  Corp.  (  Nokia),  Motorola,  all  equipment  manufacturers;  and  Openwave  Systems,  516  a  software 
 company,  founded  the  WAP  Forum  in  June  1997  to  establish  a  global,  open  industry  standard  for  bringing 
 the  Internet  to  handheld  devices  and  wireless  phones.  WAP  is  a  technology  enabler,  meaning  that  it  is 
 not  a  product  itself  but  a  set  of  non-  proprietary  standards  that  the  entire  wireless  data  industry  can  use  to 
 develop  its  products.  The  goal  of  WAP  has  been  to  allow  all  wireless  devices,  regardless  of  their 
 manufacturer  or  network,  to  access  the  Internet  in  essentially  the  same  way. 


 As  mentioned  in  the  Fifth  Report,  WAP  is  a  means  of  helping  the  wireless  industry  overcome  the 
 challenges  of  accessing  the  Internet  from  a  handheld  device  or  mobile  phone.  517  Since  1997,  more  than  600 
 companies  have  joined  the  WAP  Forum,  518  including  mobile  telephone  and  data  carriers  with  more  than 
 300  million  subscribers  worldwide.  519  As  of  October  2000,  there  were  at  least  35  types  of  WAP-  enabled 
 phones  available  worldwide  from  the  major  equipment  manufacturers.  520  In  addition,  40  different  WAP-enabled 
 handset  models  are  in  production,  but  not  yet  commercially  available.  521 


 While  WAP  has  many  positive  features,  some  members  of  the  wireless  industry  note  that  certain  problems 
 have  arisen  with  the  implementation  of  the  standard.  For  example,  the  way  in  which  vendors  have 
 integrated  WAP  into  their  products  has  sometimes  made  those  products  incompatible  with  others.  522 
 Another  criticism  of  WAP  has  been  the  lack  of  an  end-  to-  end  security  solution  to  enable  m-  commerce 
 applications.  523  As  a  result  of  these  problems,  WAP  has  received  some  negative  reviews  within  the 
 industry,  524  particularly  regarding  rollout  of  WAP  in  Europe.  525  However,  many  still  believe  WAP  will  be 


 516  Openwave  Systems  was  formed  by  the  November  17,  2000,  merger  between  Phone.  com  and 
 Software.  com.  Phone.  com  and  Software.  com  Announce  Completion  of  Merger,  News  Release,  Openwave,  Nov. 
 17,  2000. 


 517  See  Fifth  Report,  at  17704-  17706. 


 518  WAP  Forum,  The  Future  of  WAP,  Presentation,  Feb.  2001  at  3. 
 519  Id. 
 520  WAP-  enabled  handsets  as  at  October  2000,  MOBILE  COMMUNICATIONS  INTERNATIONAL,  Dec./  Jan. 
 2000/  2001,  at  99  (Source:  EMC). 
 521  Id. 


 522  Peter  Rysavy,  WAP:  Untangling  the  Wireless  Standard,  NETWORK  COMPUTING,  Nov.  27,  2000. 
 523  Id.  See  Section  II.  B.  3.b,  M-  Commerce,  infra. 
 524  The  uncertainty  the  industry  has  about  WAP  is  most  evident  on  the  cover  of  the  December/  January 
 2000/  2001  issue  of  Mobile  Communications  International,  on  which  the  question  On  fire  or  burnt  out?  is  posed 
 about  WAP.  See  also  Peter  Rysavy,  E-  Commerce  Unleashed,  NETWORK  COMPUTING,  Jan.  22,  2001,  available  in 
 2001  WL  9806388  (  E-  Commerce  Unleashed);  Jim  Thompson,  WAP-  The  Technology  Everyone  Loves  to  Hate   
 A  Potential  Force  in  Mobile  Wireless  Access,  BOARDWATCH,  Feb.  2001;  Peter  Rysavy,  WAP:  Untangling  the 
 Wireless  Standard,  NETWORK  COMPUTING,  Nov.  27,  2000  (  WAP  is  not  a  cure-  all,  and  skeptics  consider  it  an 
 interim  technology  at  best.). 


 525  Many  in  the  industry  have  been  disappointed  with  WAP  following  its  commercial  introduction  in  January 
 2000  in  Europe.  Some  of  the  disappointment  in  Europe  has  been  caused  by  shortages  of  WAP  phones;  slow  mobile 
 network  speeds,  and  the  incompatibility  between  WAP  devices  and  WAP  applications.  Mike  Hibberd,  How  it  all 
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 one  of  the  many  available  wireless  interfaces  integrated  into  mobile  phones  and  will  be  a  necessary  step  in 
 mobile  data  evolution.  526 


 b.  M-  Commerce 
 M-  commerce  is  the  term  used  for  commercial  transactions  that  are  conducted  via  a  mobile  device,  such  as  a 
 mobile  phone  or  PDA.  Consumers  currently  use  a  number  of  m-  commerce  applications,  including  financial 
 transactions,  ticket  purchases,  and  comparison-  shopping.  527  For  example,  Fidelity  Investments  allows 
 account  holders  to  use  mobile  devices  to  complete  stock  transactions  and  monitor  their  investment 
 accounts.  528  Also,  travel  websites  such  as  Expedia.  com  allow  consumers  to  conduct  various  m-  commerce 
 transactions,  including  purchasing  airplane  tickets  and  making  hotel  reservations.  529 


 During  2000,  it  is  estimated  that  businesses  and  consumers  spent  $210  million  for  m-  commerce 
 advertising,  applications  and  transactions.  530  While  mobile  data  services  are  relatively  new,  analysts 
 believe  that  there  will  be  strong  growth  in  the  number  of  consumers  who  will  participate  in  m-  commerce  531 
 and  the  revenues  generated  from  the  transactions  during  the  next  five  years.  532 


 Technological  advancements  are  spurring  growth  in  the  number  of  m-  commerce  applications. 
 Technological  advancements  include  WAP,  533  Handheld  Device  Markup  Language  (  HDML),  Extensible 


 began,  MOBILE  COMMUNICATIONS  INTERNATIONAL,  Dec./  Jan.  2000/  2001;  Matt  Hamblen,  WAP  Gets  Both  Jeers, 
 Cheers  for  Usability,  COMPUTERWORLD,  Dec.  18,  2000;  Reinhardt  Krause,  Does  Standard  For  Wireless  Web 
 Pages  Have  Legs?,  INVESTORS  BUSINESS  DAILY,  Sept.  15,  2000;  Antony  Bruno,  Skys  the  limit  for  domestic  WAP 
 rollout,  RADIO  COMMUNICATIONS  REPORT,  Aug,  21,  2000. 


 526  The  Strategis  Group  lists  three  wireless  web  interfaces:  WAP,  cHTML,  and  Microsoft  Mobile  Explorer. 


 NTT  DoCoMos  iMode  service  is  based  on  cHTML,  and  Microsofts  Mobile  Explorer  supports  both  HTML  and 
 WAP.  2001  Strategis  Mobile  Data  Report,  at  12;  Jim  Thompson,  WAP-  The  Technology  Everyone  Loves  to  Hate 
   A  Potential  Force  in  Mobile  Wireless  Access,  BOARDWATCH,  Feb.  2001;  Shyam  Kamadolli,  The  Yap  about  WAP, 
 TELECOMMUNICATIONS,  Dec.  1,  2000  (  WAP  seems  to  be  a  sure  bet,  at  least  in  the  near  term.). 


 527  E-  Commerce  Unleashed. 


 528  Fidelity  has  been  offering  wireless  access  to  accounts  since  1998.  Recently,  the  company  began 
 permitting  access  to  401K  accounts  via  mobile  devices.  Deborah  Bach,  Fidelity  Pouncing,  Others  Still  Waiting  on 
 Wireless,  AMERICAN  BANKER,  May  1,  2001,  available  in  2001  WL  3911224. 


 529  Karen  Kaplan,  M-  Commerce  Gives  Shell-  Shocked  Web  a  Glimmer  of  Light,  LOS  ANGELES  TIMES,  Mar. 


 12,  2001,  available  in  2001  WL  2469205. 
 530  Charles  V.  Zehren,  Advertisers  Set  Sights  on  Wireless  Hand-  Helds  to  Target  Their  Message,  NEWSDAY, 


 Oct.  19,  2000,  available  in  2000  WL  3722888  (citing  the  Kelsey  Group). 
 531  Herman  Mehling,  Anytime,  Anywhere  E-  Commerce  Beckons,  VARBUSINESS,  Oct.  16,  2000,  available  in 


 2000  WL  8236782  (citing  IDC). 
 532  Welcome  to  Vodafone  Bank,  How  May  We  Serve  Your  Financial  Needs,  AMERICAN  BANKER,  Oct.  17, 


 2000,  available  in  2000  WL  25346208  (citing  Nortel  Networks  and  the  Gartner  Group). 
 533  See  Section  II.  B.  3.a,  WAP,  supra. 
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 Markup  Language  (  XML),  and  Bluetooth.  534  HDML  and  WAP  are  two  of  the  most  prominent  tools  that 
 are  used  to  enable  mobile  web  browsing.  535  XML  is  increasingly  being  used  in  the  creation  of  web  sites 
 viewed  by  consumers  on  handhelds  and  mobile  phones.  Bluetooth  is  used  for  wireless  communication 
 between  electronic  devices.  These  technological  advancements  enhance  the  users  web  browsing  experience 
 and  provide  efficient  ways  to  conduct  m-  commerce  transactions.  There  are  several  examples  of  the  use  of 
 Bluetooth  technology  to  facilitate  m-  commerce  transactions.  Bluetooth  has  been  integrated  into  vending 
 machines  in  several  Nordic  countries,  including  Finland.  536  In  February  2001,  Holiday  Inn  unveiled  its  first 
 Bluetooth  enabled  hotel,  which  allows  automatic  room  service  menu  downloads  and  checkout  via  a 
 Bluetooth  enabled  device.  537  In  addition,  companies  have  committed  to  developing  technology  and  payment 
 systems  to  facilitate  m-  commerce.  For  example,  Yahoo  and  Visa  have  developed  payment  systems  to 
 facilitate  m-  commerce  transactions.  538 


 Finally,  there  are  several  industry  organizations  that  seek  to  standardize  the  architecture  and  methods  used 
 to  conduct  m-  commerce  transactions.  These  organizations  include  the  Global  Mobile  Commerce  Forum, 
 the  Mobey  Forum,  and  the  Mobile  Electronics  Transactions  Initiative.  539 


 c.  Location-  Based  Services 
 The  Commissions  Enhanced  911  rules  (  E911)  provide  that  starting  on  October  1,  2001,  wireless 
 carriers  must  begin  to  phase  in  automatic  location  identification  (  ALI)  for  911  calls  to  public  safety 


 534  See  Section  II.  B.  3.  d,  Short  Range  Data  Transmissions,  infra,  for  a  discussion  of  Bluetooth. 
 535  E-  Commerce  Unleashed. 
 536  Justin  Pearse,  European  Vending  Association  Plans  Phone-  Paid  Vending,  NEW  MEDIA  AGE,  March  8, 
 2001,  available  in  2001  WL  11317272.  The  European  Vending  Association  has  includes  Sonera,  Mobilix  and 
 Cellpoint.  Together  the  EVA  will  work  to  drive  m-  commerce  via  vending  machines  throughout  Europe  and  the 
 United  States.  Id. 


 537  Bass  Hotels,  Inc.,  which  owns  the  Holiday  Inn  chain,  plans  to  use  Bluetooth  in  all  of  its  properties, 


 including  its  Crowne  Plaza  and  Intercontinental  chains.  Leo  Lewis,  Room  bkd  4u  @  Hldy  In    CU  L8R,  THE 
 INDEPENDENT,  Feb.  4,  2001,  available  in  2001  WL  2792121.  In  April,  Starwood  Hotels  &  Resorts  International 
 announced  that  it  would  implement  m-  commerce  services  for  guests  using  Bluetooth  at  120  locations  in  North 
 America  and  Europe.  Market  Currents,  MBUSINESS,  April  1,  2001,  available  in  2001  WL  20266214. 


 538  Yahoo!  Launches  Two  Mobile  E-  Commerce  Services,  News  Release,  Yahoo,  Oct.  19,  2000;  Thyron  Teams 


 Up  with  Visa  at  Cartes  2000,  M2PRESSWIRE,  Oct.  20,  2000,  available  in  2000  WL  28277241 
 539  E-  Commerce  Unleashed.  Telecommunications  operators,  Internet  content  providers,  and  equipment 


 suppliers  founded  the  Global  Mobile  Commerce  Forum  in  1997  to  support  the  development  of  m-  commerce.  The 
 Forum  is  comprised  of  48  members  including  BT  Cellnet,  Virgin  Mobile,  InfoSpace,  Orange  and  Motorola 
 (visited  Mar.  27,  2001)  <http://  www.  GMCForum.  com>.  The  Mobey  Forum  convened  in  May  2000  to  encourage 
 the  use  of  mobile  technology  in  the  financial  services  sector.  The  Mobey  Forum  is  comprised  of  98  members 
 including  ABN-  AMBRO  Bank,  Deutsche  Bank,  Visa  International,  Ericsson,  Nokia  and  Siemens  (visited  Mar.  27, 
 2001)  <http://  www.  mobeyforum.  org>.  The  Mobile  Electronics  Transaction  Initiative  was  founded  in  April  2000 
 by  Motorola,  Ericsson,  and  Lucent  to  create  an  open  industry  framework  for  secure  m-  commerce  transactions 
 (visited  Mar.  27,  2001)  <http://  www.  wideopen.  com/  computerworld/  725.html>. 
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 answering  points  (  PSAP)  that  have  requested  it.  540  In  order  to  comply  with  this  requirement,  carriers 
 have  two  options;  they  can  employ  network-  based  or  handset-  based  location  fixing  technology.  541  In 
 addition,  a  third  hybrid  approach,  specific  to  GSM,  has  been  approved  for  use  by  VoiceStream  in  a 
 waiver  granted  last  year.  542  Most  carriers  have  announced  plans  to  comply  with  these  requirements.  For 
 example,  Sprint  recently  announced  its  plan  to  employ  handset-  based  triangulation  technology  that 
 automatically  locates  the  user  via  wireless  assisted  GPS  technology.  543  On  the  other  hand,  Verizon 
 Wireless  announced  it  would  be  implementing  a  network-  based  solution  and  has  been  conducting  field  tests 
 of  such  systems  from  a  number  of  technology  vendors.  544 


 In  addition  to  E911  purposes,  ALI  could  potentially  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  customers  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.  545 


 As  the  requirement  for  more  precise  location  information  emerges  from  the  Commissions  E911  rules,  both 
 industry  and  the  public  have  begun  to  contemplate  the  potential  wireless  privacy  considerations  of  the 
 misuse  of  such  information.  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  is  further  restricted  without  the  express  prior 
 authorization  of  the  customer,  except  in  specified  emergency  situations  to  respond  to  a  wireless  users 
 emergency  call  or  in  the  transmission  of  automatic  crash  data.  On  November  22,  2000,  the  CTIA 
 petitioned  the  Commission  to  initiate  a  rulemaking  to  implement  the  911  Acts  CPNI  amendments  on 
 wireless  privacy.  CTIAs  petition  requests  that  rules  be  adopted  to  ensure  that  wireless  customers  have  the 


 540  Under  Phase  II  E911  rules,  wireless  carriers  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.  See  Fifth  Report,  at 
 17712-  17713. 


 541  Location  Based  Services:  The  Next  Wave  of  Wireless  Services,  Allied  Business  Intelligence,  Feb.  21, 


 2001. 
 542  Revision  of  the  Commissions  Rules  to  Ensure  Compatibility  with  Enhanced  911  Emergency  Calling 


 Systems,  Fourth  Memorandum  Opinion  and  Order,  15  FCC  Rcd  17442  (2000). 
 543  See  Sprint  PCS,  Revision  of  the  Commissions  Rules  To  Ensure  Compatibility  with  Enhanced  911 


 Emergency  Calling  Systems,  Phase  II  Implementation  Report,  CC  Docket  No.  94-  102,  Nov.  9,  2000;  Fifth  Report, 
 at  17712-  17713. 


 544  See  Verizon  Wireless,  Revision  of  the  Commissions  Rules  To  Ensure  Compatibility  with  Enhanced  911 


 Emergency  Calling  Systems,  E911  Phase  II  Carrier  Report,  CC  Docket  No.  94-  102,  Nov.  9,  2000;  Verizon 
 Wireless  and  TruePosition  Announce  Successful  Completion  of  Location  System  Test  in  Manhattan,  News  Release, 
 Verizon  Wireless,  Dec.  19,  2000. 


 545  Joshua  L.  Kwan,  New  Wireless  Technology  Tracks  Location,  KNIGHT  RIDDER  /TRIBUNE  BUSINESS  NEWS, 


 Oct.  16,  2000,  available  in  2000  WL  28272653. 
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 opportunity  to  provide  fully-  informed  consent  to  allow  the  use  of  their  location-  based  information,  while 
 assuring  carriers  the  opportunity  to  develop  new  and  valuable  location-  based  wireless  services.  On  March 
 16,  2001,  the  Commission  sought  comment  on  the  CTIA  petition.  By  subsequent  public  notice,  the 
 Commission  extended  the  pleading  cycle.  Reply  comments  were  due  by  April  24,  2001.  The  record 
 generated  by  this  pleading  cycle  is  under  Commission  review. 


 In  September  2000,  Ericsson,  Motorola,  and  Nokia  founded  the  Location  Interoperability  Forum.  The 
 Forums  purpose  is  to  define,  develop,  and  promote  a  common  and  ubiquitous  location  services  solution.  546 
 Companies  have  also  entered  into  a  number  of  partnerships  to  develop  location-  based  services.  For 
 example,  MapInfo,  Inc.  and  Lucent  Technologies,  Inc.  (  Lucent)  have  partnered  to  enable  wireless 
 carriers  to  efficiently  deliver  personalized  Internet  services  based  on  a  customers  current  or  intended 
 location.  547  The  partners  plan  to  make  location-  based  services  available  using  WAP  over  GSM  networks. 
 Lucent  and  MapInfo  also  plan  to  develop  location-  based  services  for  next  generation  technologies. 


 During  2000,  in-  vehicle  location-  based  telematics  548  services  became  more  widespread.  549  Location-  based 
 services  first  appeared  in  vehicles  as  navigational  devices  using  GPS  technology  to  determine  the  vehicles 
 location.  Many  of  these  devices  use  a  small  screen  and  an  extensive  database  contained  on  CD-  ROM  to 
 display  maps  and  directions.  550  However,  OnStar,  a  wholly  owned  subsidiary  of  General  Motors,  Inc. 
 (  GM)  formed  in  1996,  551  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.  552  OnStar  also  offer  a  variety  of  other  in-  vehicle  communication 
 and  location-  based,  telematics  services,  including  remote  access  to  a  vehicles  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.  553  As  of  January  2001,  OnStar  was  available  in  35 


 546  SignalSoft  Becomes  First  Member  of  Location  Interoperability  Forum,  News  Release,  SignalSoft,  Corp., 
 Oct.  15,  2000. 
 547  MapInfo/  Lucent  to  Develop  Applications  for  Mobile  Internet,  TELEPHONE  IP  NEWS,  Nov.  1,  2000, 


 available  in  2000  WL  2145020. 
 548  See  Section  II.  B.  4,  Telemetry  and  Telematics,  infra,  for  a  further  discussion  of  telematics. 


 549  Steve  Ditlea,  Wheels  Online,  MC  TECHNOLOGY  MARKETING  INTELLIGENCE,  March  1,  2001,  available  in 
 2001  WL  15717085. 
 550  The  CD-  ROM  dependent  location  based  devices  require  drivers  to  program  the  destination  into  an  in-  dash 


 console  while  the  vehicle  is  stopped,  in  order  to  avoid  distraction.  These  location  based  devices  are  available  for 
 $1,500  to  $2,000,  including  installation.  Cade  Metz,  Nokia  Gets  Behind  the  Wheel,  PC  MAGAZINE,  March  12, 
 2001,  available  in  2001  WL  4945975;  G.  Chambers  Williams  III,  Global  Positioning  System  Guides  Drivers  Now, 
 SAN  ANTONIO  EXPRESS  NEWS,  March  25,  2001,  available  in  2001  WL  17167238. 


 551  The  number  of  subscribers  includes  the  owners  of  GMs  high-  end  models  who  receive  the  service  free  for 


 one  year  whether  they  use  it  or  not.  The  OnStar  system  connects  to  a  live  OnStar  operator  who  can  pinpoint  the 
 location  of  the  vehicle  and  provide  verbal  driving  instructions.  Steve  Ditlea,  Wheels  Online,  MC  TECHNOLOGY 
 MARKETING  INTELLIGENCE,  March  1,  2001,  available  in  2001  WL  15717085. 


 552  Steve  Ditlea,  Wheels  Online,  MC  TECHNOLOGY  MARKETING  INTELLIGENCE,  March  1,  2001,  available  in 


 2001  WL  15717085. 
 553  There  are  two  OnStar  service  plans:  the  Safety  &  Security  Plan  and  the  Premium  Plan.  The  Safety  & 


 Security  Plan  offers  live  connection  to  an  OnStar  operator,  remote  accesss  to  the  vehicles  horn,  door  locks  and 
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 vehicle  models  and  had  nearly  820,000  subscribers.  554 
 In  addition  to  GMs  OnStar,  Harman  International  manufactures  a  similar  location-  based  system  for 
 BMWs  7  series  and  for  various  Porsche  and  Audi  models,  which  includes  a  touch-  screen  and  mouse  used 
 to  control  satellite-  based  navigation  services,  mobile  telephone  service,  and  e-  mail  and  Internet  access.  555 
 Furthermore,  a  service  similar  to  OnStar,  called  Tele-  Aid,  is  currently  offered  in  a  few  Mercedes-  Benz 
 models,  including  the  ML  series  sport  utility  vehicles.  556 


 d.  Short  Range  Data  Transmissions 
 Short-  range  data  transmission  is  device-  to-  device  communication  over  short  distances.  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  it  requires  line-  of-  sight  transmission. 
 Another  technology  used  for  short-  range  data  transmissions  is  Bluetooth,  which  will  enable  multipoint, 
 broadcasting  applications. 


 Bluetooth  is  a  technology  used  to  establish  wireless  connectivity  between  electronic  devices  that  are  up  to 
 10  meters  apart.  557  Bluetooth  allows  users  to  send  signals  and  transfer  data  among  numerous  electronic 
 devices,  thus  creating  a  personal  area  network  (  PAN).  558  Bluetooth  uses  unlicensed  spectrum  in  the  2.4 


 headlights,  and  public  safety  officials  if  the  airbag  deploys.  This  plan  costs  $16.95  per  month.  The  Premium  Plan 
 allows  subscribers  to  pre-  purchase  voice  and  data  minutes  from  Verizon  Wireless.  Each  vehicle  that  is  equipped 
 with  the  Premium  service  has  its  own  phone  number  for  incoming  and  outgoing  calls.  In  addition,  the  Premium 
 Plan  allows  subscribers  to  use  voice  commands  to  access  e-  mail  and  Internet  content,  such  as  news,  stock  quotes, 
 sports  scores  and  weather  reports.  This  plans  costs  $34.95  per  month.  Steve  Ditlea,  Wheels  Online,  MC 
 TECHNOLOGY  MARKETING  INTELLIGENCE,  March  1,  2001,  available  in  2001  WL  15717085.  OnStar  has  also 
 partnered  with  Fidelity  Investments  to  offer  in-  vehicle  access  to  stock  trading  and  investment  accounts  with  the 
 Premium  Plan.  Beth  Healy,  GMs  OnStar  Service  Offers  Hands-  Free  Market  Data,  BOSTON  GLOBE,  Feb.  25, 
 2001,  available  in  2001  WL  9341166. 


 554  The  number  of  subscribers  includes  the  owners  of  GMs  high-  end  models  who  receive  the  service  free  for 


 one  year  whether  they  use  it  or  not.  Steve  Ditlea,  Wheels  Online,  MC  TECHNOLOGY  MARKETING  INTELLIGENCE, 
 March  1,  2001,  available  in  2001  WL  15717085. 


 555  Harman  Internationals  system,  called  Becker  Online  Pro,  is  currently  being  sold  in  Europe  in  the  BMW 


 7-  series  models.  A  similar  system  is  scheduled  to  appear  in  the  United  States  in  the  2002  BMW  7-  series,  Porsche 
 and  Audi  models.  Jerry  Knight,  Harman  Fine  Tuning  A  Telematics  Plan,  THE  WASHINGTON  POST,  March  8, 
 2001,  available  in  2001  WL  2549423. 


 556  Mercedez-  Benz  plans  to  make  the  TeleAid  system  available  in  its  2002  models.  The  annual  subscription 


 rate  for  Tele-  Aid  is  $125.00.  Jim  Mateja,  Variety  is  Standard  on  Mercedes  SUVs,  SOUTH  FLORIDA  SUN-  SENTINEL, 
 Feb.  23,  2001,  avaiable  in  2001  WL  2661136. 


 557  The  name  Bluetooth  comes  from  the  Danish  King  Harald  Blatand  II  who  peacefully  unified  Denmark  and 


 Norway.  The  range  of  Bluetooth-  enabled  devices  may  be  extended  to  100  meters  with  additional  amplifiers. 
 Bluetooth  Special  Interest  Group,  FAQ:  Bluetooth  Trademark  (visited  Oct.  25,  2000) 
 <http://  www.  bluetooth.  com/  bluetoothguide/  faq/  8.  asp>. 


 558  Personal  Area  Network  (  PAN)  is  a  term  being  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.  12,  2001)  <http://  www.  motorola.  com/  bluetooth/  pan/  pan.  html>;  Compaq,  Wireless 
 personal  area  network  (visited  Feb.  12,  2001)  <http://  www5.  compaq.  com/  products/  wireless/  wpan>. 
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 GHz  band  and  transmits  data  at  speeds  close  to  1  Mbps.  Bluetooth  also  uses  frequency  hopping  spread 
 spectrum  techniques  to  provide  enhanced  communications  performance  and  an  initial  level  of  transmission 
 security.  559 


 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.  560  As  a  result  of  industry  cooperation,  analysts  forecast  a  large 
 market  for  Bluetooth  products.  For  example,  Cahners  In-  Stat  Group  estimates  there  will  be  1.  4  billion 
 Bluetooth-  enabled  products  by  2005.  561  ING  Barings  expects  Bluetooth  chips  to  generate  $3  billion  in 
 revenues  by  2003.  562 


 Bluetooth-  enabled  chips  for  laptops,  desktop  PCs,  and  mobile  phones  were  the  first  products  to  be  made 
 available  in  2000.  563  Analysts  expect  Bluetooth-  enabled  products  to  hit  the  market  en  masse  in  late  2001.  564  As  of  December  2000,  chips  cost  about  $20  each.  565  However,  analysts  believe  that  chip  prices 


 will  likely  decrease  to  $5,  which  will  increase  the  viability  of  Bluetooth-  enabled  devices.  566 
 Another  wireless  networking  technology  sharing  the  2.  4  GHz  frequency  band  with  Bluetooth  is  the  Institute 


 559  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.  On  its  website,  the  Bluetooth  SIG  mentions 
 that  two  other  security  features  available  are  encryption  and  authentication.  Both  features  may  be  employed  on  an 
 application  level.  Bluetooth  Special  Interest  Group,  FAQ    Security  (visited  Oct.  25,  2000) 
 <http://  www.  bluetooth.  com/  bluetoothguide/  faq/  5.  asp>;  Art  Wittmann,  Brush  Up  on  Bluetooth,  NETWORK 
 COMPUTING,  June  28,  1999,  available  in  1999  WL  8445722. 


 560  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. 


 561  Cahners  In-  Stat  Group,  selected  data  from  Bluetooth  2000:  To  Enable  the  Star  Trek  Generation, 
 <http://  www.  instat.  com>;  Cathleen  Moore,  Bluetooth-  enabled  products  finally  hit  market,  INFOWORLD,  Dec.  18, 
 2000,  available  in  2000  WL  26552351. 


 562  Liz  Vaughan-  Adams,  Giving  Bluetooth  a  little  extra  bite,  THE  INDEPENDENT,  Feb.  21,  2001,  available  in 
 2001  WL  2796148. 
 563  See  Appendix  D,  Table  10,  at  D-  12. 


 564  Sarah  L.  Robers-  Witt,  Will  Bluetooth  Bite  Soon?,  PC  MAGAZINE,  Jan.  1,  2001,  available  in  2001  WL 
 4945284.  For  a  list  of  products  available  at  the  end  of  2000  and  those  slated  to  begin  selling  in  2001,  see 
 Appendix  D,  Table  10,  at  D-  12. 


 565  Survey,  Is  Bluetooth  worth  the  wait?,  THE  ECONOMIST,  Dec.  9,  2000,  available  in  2000  WL  8144813;  Dan 
 Meyer,  Bluetooth  At  The  Gate;  Ready  To  Run:  SIG  Works  Through  Testing  Issues,  Standards  Setting  And  Early 
 Hype,  RCR  RADIO  COMMUNICATIONS  REPORT,  Sept.  25,  2000,  available  in  2000  WL  26131159. 


 566  Dan  Meyer,  Bluetooth  At  The  Gate;  Ready  To  Run:  SIG  Works  Through  Testing  Issues,  Standards  Setting 
 And  Early  Hype,  RCR  RADIO  COMMUNICATIONS  REPORT,  Sept.  25,  2000,  available  in  2000  WL  26131159; 
 Bluetooth  Gaining  Speed,  But  Obstacles  Remain,  CT  WIRELESS,  Volume  4  Issue  185,  Sept.  26,  2000,  available  in 
 2000  WL  6392471. 
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 of  Electrical  and  Electronics  Engineers  567  (  IEEE)  802.11b  standard,  also  called  wireless  fidelity 
 (  WiFi).  The  802.11b  standard  is  used  in  devices  to  connect  to  wireless  local  area  networks  (  WLANs), 
 and  allows  a  maximum  throughput  of  11  Mbps.  568  The  technology  is  being  implemented  by  a  number  of 
 vendors  in  public  places  such  as  airports,  hotels  and  Starbucks  stores  569  to  allow  users  wireless  access  via 
 802.11b-  enabled  notebook  computers,  handheld  devices,  smartphones  and  pocket  PCs.  In  addition,  the 
 802.11b  standard  is  being  integrated  into  many  products,  including  notebook  computers,  desktop  PCs  and 
 handheld  devices.  For  example,  Apple  Computer,  Inc.  (  Apple)  introduced  AirPort  in  July  1999  for  use 
 in  schools  and  homes.  570  AirPort,  which  is  designed  to  work  with  Apples  desktop  and  laptop  computers, 
 uses  the  802.11b  standard  to  allow  multiple  users  to  share  an  Internet  connection  wirelessly.  571  HomeRF, 
 developed  by  the  Home  Radio  Frequency  Working  Group,  572  also  operates  in  the  2.  4  GHz  frequency  band, 
 using  a  combination  of  data  networking  technologies  derived  in  part  from  the  802.11b  standard,  and 
 cordless  phone  technologies  adapted  from  DECT.  573 


 Unlicensed  spectrum  is  also  used  to  provide  fixed  wireless  high-  speed  Internet  access  to  homes  and 
 businesses  in  neighborhoods  and  communities  across  the  United  States.  See  Appendix  A,  infra,  for  a 
 discussion  of  these  services. 


 Analysts  have  made  several  predictions  about  the  growth  of  the  wireless  LAN  market  and  802.11b.  Frost 
 &  Sullivan  predicts  that  wireless  LAN  industry  revenues  will  reach  $884  million  by  2002,  compared  to 
 $415  million  in  revenues  forecast  in  1999.  574  Cahners  In-  Stat  Group  expects  that  more  than  10  million 
 802.11b  products  will  be  installed  by  the  end  of  2001,  575  and  Gartner  Group  estimates  95  percent  of 


 567  The  Institute  of  Electrical  and  Electronics  Engineers  (  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,  Newtons  Telecom  Dictionary,  1998,  at  358. 


 568  J.  William  Gurley,  The  next  big  thing?  Try  802.11b,  CNET.  COM,  Feb.  19,  2001;  Curtis  Franklin,  Cut  The 


 Cord,  INTERNETWEEK,  Mar.  12,  2001,  available  in  2001  WL  8007251;  Terry  Sweeney,  802.11B:  One  Standard 
 Worth  Waiting  For,  TECHWEBUK.  COM,  Nov.  16,  2000. 


 569  John  C.  Dvorak,  Wireless  Whale,  FORBES,  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, 
 Mar.  20,  2001.  In  January  2001,  Starbucks  announced  it  will  begin  installing  MobileStar  Network  Corporations 
 wireless  broadband  network  in  stores,  allowing  customers  with  802.11b-  enabled  notebook  computers,  handheld 
 devices,  smartphones  and  pocket  PCs  to  access  broadband  content  and  services  in  Starbucks  stores.  Starbucks  and 
 Microsoft  Blend  Coffee  Retailers  Expertise  With  Technology  Leaders  Software  and  Services  to  Deliver  Wireless 
 Cof,  News  Release,  Starbucks,  Jan.  3,  2001. 


 570  Apple  Introduces  AirPort  Wireless  Networking,  News  Release,  Apple,  Jul.  21,  1999 


 571  AirPort  works  with  Apples  iBook,  iMac,  PowerBook  G4,  Power  Mac  G4  Cube  and  Power  Mac  G4. 
 Apple,  Apple    AirPort  (visited  May  21,  2001)  <http://  www.  apple.  com/  airport/>. 
 572  Members  include  Siemens,  Compaq,  Motorola,  National  Semiconductor,  and  Proxim.  HomeRF, 


 Frequently  Asked  Questions  (visted  June  18,  2001)  <http://  www.  homerf.  org/  about/  faq_  general.  html>. 
 573  Id.  DECT  is  the  Digitally  Enhanced  Cordless  Telephone  standard  that  is  widely  used  across  Europe.  Id. 


 574  Wireless  Ethernet  Compatibility  Alliance,  Wi-  Fi  Value  and  the  Benefit  of  Standards  (visited  Apr.  30, 
 2001)  <http://  www.  wi-  fi.  org/  benefitsfaq.  asp>. 
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 notebook  computers  will  be  802.11b-  enabled  by  2005.  576 
 On  May  11,  2001,  the  Commission  released  a  Further  Notice  of  Proposed  Rulemaking  and  Order, 
 amending  Part  15  of  the  Commissions  rules  for  spread  spectrum  devices.  The  Commission  proposes  the 
 following  changes  to  systems  operating  in  the  2.  4  GHz  band:  to  revise  rules  for  frequency  hopping  spread 
 spectrum  systems;  to  eliminate  the  processing  gain  for  direct  sequence  spread  spectrum  systems;  and  to 
 allow  digital  transmission  technologies  to  operate  pursuant  to  the  same  rules  as  spread  spectrum  systems.  577 


 4.  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.  These 
 systems  were  discussed  in  more  detail  above  in  the  Location-  Based  Services  Section  of  this  report.  578 


 In  addition  to  AMR,  wireless  telemetry  systems  can  also  be  used  to  monitor  health  care  equipment,  HVAC 
 systems,  gas  and  oil  pipelines,  vending  machines,  alarm  systems,  parking  meters,  streetlights,  smoke/  fire 
 detectors,  factory  process  systems,  and  photocopiers.  Moreover,  companies  can  employ  wireless  telemetry 
 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.  579  Over  40,000  stolen  vehicles  equipped  with  LoJack  have  been  recovered  by  U.  S.  law 
 enforcement  agencies.  580 


 The  two  major  AMR  providers  are  Schlumberger  Resource  Management  Services,  Inc.  (  Schlumberger) 
 and  Itron,  Inc  (  Itron).  581  As  mentioned  in  the  Fifth  Report,  Schlumberger  completed  its  acquisition  of 
 CellNet  Data  Systems  in  May  2000  582  and,  since  that  time,  has  continued  to  use  CellNet  as  the  brand  name 


 575  Toni  Kistner,  Small  businesses  warming  to  802.11b,  NETWORK  WORLD,  Apr.  23,  2001. 


 576  J.  William  Gurley,  The  next  big  thing?  Try  802.11b,  CNET.  COM,  Feb.  19,  2001. 
 577  Amendment  of  Part  15  of  the  Commissions  Rules  Regarding  Spread  Spectrum  Devices  and  Wi-  LAN, 
 Inc.  Application  for  Certification  of  an  Intentional  Radiator  Under  Part  15  of  The  Commissions  Rules,  Further 
 Notice  of  Proposed  Rulemaking  And  Order,  DA  00-  2317  (rel.  May  11,  2001). 


 578  See  Section  II.  B.  3.  c,  Location-  Based  Services,  supra. 


 579  LoJack  Corporation,  SEC  Form  10-  K/  A,  Mar.  13,  2000. 
 580  LoJack  Corporation,  Company  Overview  (visited  May  25,  2001) 
 <http://  www.  lojack.  com/  about/  index.  htm>. 
 581  See  Appendix  D,  Table  11,  at  D-  13  for  an  overview  of  their  services. 


 582  See  Fifth  Report,  at  17726. 
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 for  its  wireless  telemetry  services  in  North  America.  In  February  2001,  Schlumberger  announced  that  it 
 had  connected  five  million  consumers  to  its  CellNet  wireless  telemetry  network,  583  a  67  percent  increase 
 over  the  three  million  units  CellNet  had  connected  at  the  end  of  1999.  584  Schlumberger  also  had  contracts 
 to  connect  an  additional  three  million  consumers  to  its  network.  585  During  2000,  Schlumberger  acquired  an 
 exclusive  license  to  use  and  sell  Metricoms  UtiliNet  RF  technology.  586  Itron  focuses  exclusively  on 
 providing  AMR  telemetry  equipment  and  is  the  largest  provider  in  that  market.  As  of  the  end  of  2000, 
 Itron  had  connected  over  17  million  AMR  units,  a  10  percent  increase  from  the  previous  year,  for  650 
 utility  companies.  587 


 Many  mobile  data  providers  discussed  above,  including  WebLink,  SkyTel,  Motient,  and  Cingular 
 Interactive,  offer  a  variety  of  telemetry  services,  either  directly  to  end  users  or  through  other  telemetry 
 providers  who  create  and  maintain  telemetry  computers  systems  for  end  users  but  rely  on  the  networks  of 
 mobile  data  providers.  588  As  mentioned  in  the  Fifth  Report,  many  analysts  and  industry  players  believe  that 
 the  telemetry  market  represents  a  significant  business  opportunity  for  paging/  messaging  carriers.  589  In 
 addition,  two  companies,  Aeris.  net  (  Aeris)  and  Cellemetry,  lease  capacity  on  mobile  telephone  networks 
 to  offer  telemetry  products.  Aeris  sells  the  use  of  its  network  to  other  telemetry  service  providers.  During 
 2000,  Aeris  signed  several  contracts  590  with  telemetry  providers  who  offer  services  such  as  AMR,  mobile 
 asset  tracking,  and  the  monitoring  of  petrochemical  assets,  tanks,  and  generators.  591 


 583  Schlumberger  RMS  Reaches  Major  Milestone,  Connects  5  Millionth  Consumer  to  Wireless  Fixed 
 Network,  News  Release,  Schlumberger,  Feb.  26,  2001. 
 584  CellNet  Installs  Three  Millionth  Device  into  Wireless  Network,  NETWORKS  UPDATE,  Dec.  1,  1999, 
 available  in  1999  WL  11391122. 
 585  Schlumberger  RMS  Reaches  Major  Milestone,  Connects  5  Millionth  Consumer  to  Wireless  Fixed 
 Network,  News  Release,  Schlumberger,  Feb.  26,  2001. 
 586  Schlumberger  Ltd,  SEC  Form  10-  Q,  May  12,  2000. 


 587  Itron,  Inc.  Expresses  Confidence  in  Fourth  Quarter  Guidance;  Reports  Strong  Fourth  Quarter  Bookings, 
 News  Release,  Itron,  Dec.  22,  2000;  Itron  and  eMobile  Data  Sign  Exclusive  Development,  License  and 
 Distribution  Agreements,  News  Release,  Itron,  Feb.  6,  2001. 


 588  See  Appendix  D,  Table  11,  at  D-  13  for  the  details  on  the  services  offered  by  these  carriers. 


 589  See  Fifth  Report,  at  17727. 
 590  See  Appendix  D,  Table  11,  at  D-  13  for  details  on  these  contracts. 
 591  Telemetry  Technologies  To  Deploy  Aeris.  Net's  Microburst  Technology,  News  Release,  Aeris,  May  19, 
 2000. 
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 III.  CONCLUSION 
 The  past  year  has  continued  the  positive  trends  of  increased  competition  in  the  CMRS  industry  described  in 
 the  Fifth  Report.  First,  during  2000  mobile  telephone  subscribership  climbed  23.  5  million,  to  109.5 
 million.  That  represents  a  28  percent  increase  over  a  year  earlier  and  is  the  largest  twelve-  month  increase 
 in  total  number  of  subscribers  in  the  history  of  the  sector,  surpassing  even  1999s  record  breaking  16.9 
 million  additional  subscribers.  This  subscriber  growth  brought  the  U.  S.  wireless  penetration  rate  to  39 
 percent.  In  addition,  other  key  metrics  demonstrate  the  increased  demand  for  and  reliance  placed  on  mobile 
 services.  During  2000,  average  MOUs  increased  by  32  percent  and  ARPU  increased  10  percent,  while, 
 according  to  the  Bureau  of  Labor  Statistics,  the  price  of  mobile  telephone  service  fell  by  12.  3  percent. 


 Second,  the  deployment  and  acceptance  of  digital  technology  continued  unabated,  with  95  percent  of  the 
 total  U.  S.  population  living  in  counties  where  operators  offer  digital  mobile  telephone  service  and  62  of  all 
 mobile  telephone  subscribers  using  digital  phones  at  the  end  of  2000.  592  The  widespread  adoption  of  digital 
 technology  is  not  only  increasing  spectral  efficiency  and  lowering  network  costs,  but  causing  a  convergence 
 between  cellular  and  PCS. 


 Third,  mobile  telephony  providers  continued  to  expand  their  nationwide  footprints  and  buildout  their 
 networks.  To  date,  259  million  people,  or  91  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  214  million 
 people,  or  75  percent  of  the  U.  S.  population,  live  in  areas  with  five  or  more  mobile  telephone  operators 
 competing  to  offer  service.  And  133  million  people,  or  almost  47  percent  of  the  population,  can  choose 
 from  among  six  or  more  different  mobile  telephone  operators. 


 Fourth,  competition  has  been  instrumental  in  shaping  the  mobile  data  sector.  A  variety  of  mobile  data 
 services,  ranging  from  paging  to  e-  mail  to  web  access  to  SMS,  are  currently  available  on  a  variety  of 
 devices  from  numerous  providers,  including  mobile  telephone  operators,  paging/  messaging  carriers, 
 handheld  PDA  device  providers,  and  dedicated  data  network  operators.  The  six  nationwide  mobile 
 telephone  carriers  currently  offer  mobile  Internet  access  services  and  had  at  least  2.  5  million  mobile 
 Internet  users  as  of  the  end  of  2000.  593  Paging/  messaging  operators,  who  face  intense  competition  from 
 each  other  as  well  as  other  mobile  data  providers,  have  continued  to  diversify  their  services  by  offering 
 their  customers  a  variety  of  advanced  messaging  and  Internet-  based  services.  In  addition  to  mobile 
 telephone  and  paging/  messaging  carriers,  increased  competition  in  the  mobile  data  sector  has  come  from 
 handheld  devices  with  wireless  Internet  connections,  as  well  as  the  mobile  data  services  offered  by 
 dedicated  data  network  operators. 


 The  evolution  of  mobile  data  services  and  technologies  is  proceeding  rapidly.  Mobile  telephone  carriers  are 
 planning  to  deploy  3G  technologies  over  the  next  few  years  in  order  to  offer  mobile  Internet  access  at 
 higher  speeds,  ultimately  up  to  2  Mbps.  At  least  six  major  carriers  currently  plan  to  roll  out  technologies 
 during  2001  that  will  allow  them  to  increase  data  transfer  speeds  from  9.  6  to  19.  2  kbps  to  up  to  144  kbps. 
 A  number  of  mobile  data  technologies  and  services,  including  WAP,  Bluetooth,  location-  based  services, 
 and  m-  commerce,  are  currently  being  developed  and  will  likely  facilitate  growth  in  the  mobile  data  industry 
 as  it  evolves. 


 592  See  Section  II.  A.  1.  c,  Continued  Rise  of  Digital,  supra. 
 593  See  Section  II.  B.  2.a,  Paging/  Messaging,  supra. 
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 Finally,  mobile  services  are  changing  the  way  Americans  communicate.  Initially  a  business  tool,  mobile 
 phones  have  become  a  mass-  market  consumer  device.  One  survey  found  that  the  overwhelming  majority  of 
 mobile  telephone  customers  use  their  phones  primarily  for  personal  calls.  594  And  for  some,  particularly 
 younger  Americans,  wireless  service  is  no  longer  a  compliment  to  wireline  service,  but  has  become  the 
 preferred  method  of  communication. 


 IV.  ADMINISTRATIVE  MATTERS 
 This  Sixth  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 


 Magalie  Roman  Salas 
 Secretary 


 594  See  Section  II.  A.  1.  e,  Wireless/  Wireline  Competition,  supra. 
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 A-  1 
 APPENDIX  A:  FIXED  WIRELESS  VOICE  AND  DATA  SERVICES 
 I.  INTRODUCTION 
 In  this  section,  the  Commission  reviews  the  state  of  competition  provided  by  fixed  wireless  595  operators  for 
 voice  and  data  services  in  both  residential  and  business  markets.  While  some  spectrum  traditionally  used 
 for  CMRS  is  also  being  used  for  fixed  wireless  service,  596  other  spectrum  bands,  including  Multipoint 
 Distribution  Service  (  MDS),  Wireless  Communications  Service  (  WCS),  unlicensed  spectrum  bands, 
 24  GHz,  Local  Multipoint  Distribution  Service  (  LMDS),  and  39  GHz,  are  also  being  used  to  provide 
 such  service.  For  discussion  purposes,  operators  are  divided  into  two  categories:  lowerband  providers  (800 
 MHz  to  5.8  GHz)  and  upperband  providers  (24  GHz  to  39  GHz). 


 A.  Fixed  Wireless  Access 
 In  a  fixed  wireless  access  system,  a  provider  attaches  a  radio  transmitter  to  a  customers  premises  that 
 communicates  with  the  providers  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,  thus  allowing  a  wireless 
 provider  to  compete  with  a  traditional  wireline  service  provider.  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  customers  building,  thereby 
 lessening  their  reliance  on  the  facilities  of  local  exchange  carriers  (  LECs).  In  addition  to  providing  new 
 competition  in  existing  markets,  fixed  wireless  systems  can  provide  new  services  and  expand  capacity  into 
 areas  considered  too  expensive  to  serve  with  available  wireline  technologies.  Fixed  wireless  technology  can 
 provide  broadband,  or  high-  speed,  services  faster  and  for  less  money  than  wireline  technologies.  The 
 Commission  has  used  the  term  broadband  services  to  refer  to  a  larger  set  of  services  that  end  users  can 
 access  with  asymmetric  capabilities  and  speeds  that  are  less  than  200  kbps,  but  are  generally  considered 
 high-  speed  (i.  e.,  greater  than  128  kbps  in  a  wireless  environment  or  144  kbps  in  a  wireline  environment.  597 


 Lower  Network  Deployment  Costs.  Fixed  wireless  operators  claim  that  their  networks  have  a  significantly 


 595  Fixed  wireless  services  are  also  sometimes  referred  to  as  wireless  broadband  or  wireless  DSL.  The 
 Commission  endeavors  to  make  its  information  as  up-  to-  date  as  possible,  and,  unless  otherwise  noted,  the  data  in 
 this  section  of  the  report  covers  the  period  through  May  2001.  Because  the  fixed  wireless  sector  changes  so 
 rapidly,  some  of  the  information  may  not  be  current  as  you  are  reading  it. 


 596  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). 


 597  In  contrast,  in  its  first  report  on  the  deployment  of  advanced  telecommunication  services,  the  Commission 


 defined  advanced  telecommunications  capability  as  upstream  and  downstream  communications  paths  having 
 the  capability  of  supporting  .  .  .  a  speed  .  .  .  in  excess  of  200  kilobits  per  second  (kbps)  in  the  last  mile.  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,  Report,  14  FCC  Rcd  2398,  2406,  at    20  (1999).  See  also,  Local  Competition 
 and  Broadband  Reporting,  Report  and  Order,  15  FCC  Rcd  7717,  7720,  at  note  8  (2000). 
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 lower  cost  structure  than  wireline  systems  for  two  primary  reasons.  598  First,  wireless  networks  are  free  of 
 many  of  the  installation  and  maintenance  costs  incurred  with  wiring  a  customers  building  to  a  central 
 office.  Second,  unlike  a  wireline  network,  in  which  an  entire  market  must  be  wired  before  initiating  service, 
 a  wireless  network  can  be  deployed  incrementally  as  more  customers  are  added.  Therefore,  the  capital 
 expenditures  of  a  fixed  wireless  network  are  much  lower. 


 Underserved  Markets.  In  general,  penetration  by  existing  high-  speed  wireline  systems  is  relatively  low. 
 For  example,  only  a  small  percentage  of  office  buildings  have  access  to  fiber  optic  lines.  599  Therefore, 
 many  businesses  with  volume  too  low  for  expensive  fiber  connections  are  potential  customers  for  fixed 
 wireless  carriers.  600  In  addition,  fixed  wireless  access  has  the  potential  to  provide  broadband  services  to 
 residential  customers  in  both  urban  and  rural  markets,  including  those  without  access  to  broadband  services 
 through  cable  modems  or  DSL.  601  Moreover,  fixed  wireless  can  be  an  efficient  means  of  providing  basic 
 telephone  and  data  services  to  isolated  areas  and  other  market  segments  that  are  not  currently  reached  by 
 traditional  telephone  networks. 


 B.  Comparison  of  Lower  and  Upper  Bands 
 As  mentioned  above,  fixed  wireless  operators  use  several  different  spectrum  bands  to  provide  voice  and 
 data  services.  These  bands  are  grouped  into  two  categories    lowerbands  and  upperbands    because  of 
 their  similar  technical  characteristics  and  use  by  carriers.  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. 


 The  lowerbands  can  serve  a  wider  geographic  area  with  a  single  transmitter  than  the  upperbands  (see 
 Figure  1  below).  Lowerbands  have  a  service  radius  of  five  to  35  miles  from  a  central  hub,  depending  on 
 the  particular  band,  the  power  of  the  transmitter,  and  the  terrain.  Upperband  operators,  on  the  other  hand, 
 face  significant  losses  of  signal  strength  due  to  atmospheric  conditions,  most  notably  precipitation  (i.  e., 


 598  See  Fifth  Report,  at  17785. 
 599  Estimates  of  this  market  vary.  Teligent  estimates  3  to  4  percent  of  the  office  buildings  in  the  United 
 States  are  wired  through  fiber;  however,  these  buildings  account  for  30  percent  of  business  phone  lines.  Stan 
 Draenos,  Wireless  Goes  the  Last  Mile,  UPSIDE  TODAY,  Oct.  9,  2000,  available  in  2000  WL  4725953  (quoting 
 Bruce  Wagner,  Senior  VP  for  field  operations  at  Teligent).  The  Strategis  Group  estimates  4  percent  of  all 
 buildings  in  the  United  States  are  connected  by  fiber.  See  Arielle  Emmett,  Alcatels  LMDS  Strategy:  Scars,  Welts 
 and  Staying  Power,  BROADBAND  WIRELESS  BUSINESS,  Mar.  2001,  at  32.  McKinsey  &  Company  and  J.  P.  Morgan 
 Securities  estimate  that  5  percent  of  large  U.  S.  buildings  are  of  sufficient  size  and  relative  proximity  to  be  targeted 
 by  fiber.  Broadband  2001,  McKinsey  &  Company  and  J.  P.  Morgan  Securities,  2001. 


 600  Robertson  Stephens  estimates  that  there  are  8  million  small  and  medium-  sized  businesses  in  the  United 


 States.  Jim  Friedland  and  Amy  Roth,  Broadband  Wireless  Access:  Beyond  the  Reach  of  Fiber,  Robertson 
 Stephens  Telecom  Services  Research,  Feb.  18,  2000,  at  1.  Lehman  Brothers  estimates  that  mid-  sized  businesses 
 use  25  to  35  million  access  lines.  Tim  Luke,  Introducing  the  Broadband  Wireless  Equipment  Market,  Lehman 
 Brothers,  Aug.  5,  1999,  at  6. 


 601  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,  Report,  14  FCC  Rcd  2398,  2422  (2000). 
85
 Federal  Communications  Commission  FCC  01-  192 
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 rain,  snow,  and  fog).  602  Therefore,  the  range  of  individual  transmitters  in  the  upperbands  is  approximately 
 two  to  five  miles. 


 With  the  exception  of  carriers  that  use  PCS  spectrum,  603  both  upper  and  lower  band  operators  currently 
 require  a  clear  line-  of-  sight  between  their  transmitters  and  their  customers  receivers.  However,  recent 
 technological  developments  may  help  to  overcome  this  line-  of-  sight  restriction.  For  example,  Orthogonal 
 Frequency  Division  Multiplexing  (  OFDM)  is  a  technology  standard  currently  being  developed  for  use  in 
 multiple  wireless  products,  including  wireless  LANs,  mobile  wireless  systems,  and  broadband  fixed 
 wireless  access.  604  OFDM  has  the  potential  to  overcome  the  line-  of-  sight  restriction  that  fixed  wireless 
 operators  face  by  redirecting  signals  as  they  bounce  off  buildings  and  other  objects.  605  OFDM  is  also 
 expected  to  increase  the  speeds  of  wireless  networks.  606  Fixed  wireless  equipment  vendors,  such  as  Cisco 


 Systems,  NextNet  Wireless,  and  Hybrid  Networks,  Inc.  (  Hybrid  Networks),  are  developing  non-  line-  of- 
 602  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  9s. 


 603  Gerry  Blackwell,  Project  Angel:  Very  Much  Alive  and  Kicking,  BROADBAND  WIRELESS  BUSINESS,  Mar. 


 2001,  at  44  (  Blackwell  Project  Angel  Article) 
 604  Steve  Stroh,  OFDM  Forum  Grinds  On  With  Mission,  BROADBAND  WIRELESS  BUSINESS,  Jan.  2001,  at  8 


 (  Stroh  OFDM  Article);  Jim  Grier,  Enabling  Fast  Networks  with  OFDM,  COMMUNICATION  SYSTEMS  DESIGN,  Feb. 
 1,  2001,  <http://  www.  csdmag.  com/  story/  OEG20010122S0078>.  OFDM  is  sometimes  referred  to  as  multi-  carrier 
 or  discrete  multi-  tone  modulation.  See  Jim  Grier,  Enabling  Fast  Networks  with  OFDM,  COMMUNICATION  SYSTEMS 
 DESIGN,  Feb.  1,  2001,  <http://  www.  csdmag.  com/  story/  OEG20010122S0078>. 


 605  Stroh  OFDM  Article;  See  Fifth  Report,  at  17793. 


 606  Stroh  OFDM  Article;  Jim  Grier,  Enabling  Fast  Networks  with  OFDM,  COMMUNICATION  SYSTEMS  DESIGN, 
 Feb.  1,  2001,  available  at  <http://  www.  csdmag.  com/  story/  OEG20010122S0078>. 


 Unlicensed 
 Spectrum 
 5-  15  miles 


 MDS 
 Spectrum 
 25-  35  miles 


 24  GHz,  LMDS, 
 39  GHz 
 2-  5  miles 


 Figure  1.  Fixed  Wireless  Coverage  Radii 
86
 Federal  Communications  Commission  FCC  01-  192 
 A-  4 
 sight  products  for  fixed  wireless  carriers,  607  and  AT&  T  currently  uses  OFDM  technology  in  its  fixed 
 wireless  service,  as  discussed  below.  608 


 Upperband  operators  can  transfer  data  at  much  higher  speeds  than  lowerband  operators  because  upperband 
 operators  have  much  larger  spectrum  allocations.  The  highest  reported  speed  offered  by  a  lowerband 
 carrier  is  around  25  Mbps,  versus  155  Mbps  for  upperband  providers  (see  Figure  2). 


 The  lower  and  upperband  operators  generally  serve  two  distinct  markets.  Like  many  wireline  competitive 
 local  exchange  carriers  (  CLECs),  upperband  operators  sell  very  high-  speed  broadband  and  data  services, 
 as  well  as  local  and  long  distance  voice  services,  to  business  customers,  mainly  in  urban  areas.  Moreover, 
 many  upperband  carriers  use  wireline  fiber  networks  in  conjuction  with  their  fixed  wireless  technology. 
 Lowerband  operators,  on  the  other  hand,  generally  offer  high-  speed  Internet  access  at  around  1.  5  Mbps  to 
 residential  and  small  office/  home  office  (  SOHO)  customers  in  a  range  of  geographic  areas  that  includes 
 rural  and  underserved  areas.  609  One  analyst  estimated  that  at  the  end  of  2000  there  were  230,000  total 
 fixed  wireless  subscribers  in  the  upper  and  lower  bands,  including  80,000  residential  customers.  610 


 Both  upperband  and  lowerband  carriers  use  multiple  spectrum  bands  to  offer  identical  services.  For 
 example,  AT&  T  uses  both  PCS  and  WCS  spectrum  for  its  Digital  Broadband  product.  611  And  Winstar 
 Communications,  Inc.  (  Winstar)  has  used  both  39  GHz  and  LMDS  spectrum  to  offer  its  package  of 
 voice  and  broadband  services. 


 607  See  Fifth  Report,  at  17793;  Hybrid  Networks  to  Develop  Non-  Line-  of-  Sight  Wireless  Broadband  Router, 
 BROADBAND  WIRELESS  BUSINESS,  Jan.  2001,  at  9. 
 608  Blackwell  Project  Angel  Article.  See  Section  II.  D,  Major  Lowerband  Operators,  infra,  for  a  discussion  of 


 AT&  Ts  Digital  Broadband  service. 
 609  See  Section  II.  D,  Major  Lowerband  Operators,  infra.  See  also  Appendix  E,  Map  7,  p.  E-  8. 


 610  Elizabeth  Douglas,  Putting  Broadband  on  the  Air  Wireless  Technology  is  Speeding  the  Spread  of 
 Residential  Service,  LOS  ANGELES  TIMES,  Oct.  19,  2000,  available  in  2000  WL  25909045  (quoting  Brian  Gilman, 
 senior  analyst  at  eMarketer  Inc.)  (  Douglas  Broadband  Article);  Joan  Van  Tassel,  Fixed  Wireless  Coming 
 Despite  AT&  T  Restructuring,  LOS  ANGELES  BUSINESS  JOURNAL,  Nov.  6,  2000,  available  in  2000  WL  27194905 
 (quoting  eMarketer). 


 611  See  Section  II.  D,  Major  Lowerband  Operators,  infra. 


 Figure  2.  Fixed  Wireless  Downstream  Speeds 
 155 
 25 
 10 
 0.5 


 0  25  50  75  100  125  150  175  200  225 
 Megabytes  per  Second 


 Cellular,  PCS 
 MDS 


 Upperbands 
 Unlicensed 
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 Most  fixed  wireless  carriers  use  either  point-  to-  point  (  PTP)  or  point-  to-  multipoint  (  PTMP) 
 transmission  technologies,  or  a  mix  of  the  two,  in  their  systems.  In  a  PTP  network,  at  the  hub,  612  there  is  a 
 single  transmitting  dish  for  each  customer  on  the  network.  In  a  PTMP  network,  multiple  customers  can  be 
 serviced  by  a  single  specialized  transmitter  at  the  hub.  PTMP  has  a  number  of  advantages  over  PTP.  613 
 PTMP  allows  for  the  cost  of  the  hub  site  antenna  to  be  allocated  over  numerous  customer  building  sites, 
 rather  than  just  one,  and  reduces  the  capital  expenditures  necessary  to  bring  service  to  a  particular  building.  614  In  addition,  the  use  of  PTMP  allows  fixed  wireless  operators  to  allocate  and  share  network 


 capacity  on  an  as-  needed  basis  and  supply  customers  with  bandwidth-  on-  demand  to  address  their  dynamic 
 capacity  needs.  615 


 II.  LOWERBANDS 
 A.  Introduction 
 The  following  spectrum  bands  below  6  GHz  are  used  to  offer  commercial  fixed  wireless  services: 
 Cellular/  PCS,  MDS,  WCS,  and  Unlicensed.  In  previous  CMRS  Reports,  these  bands  and  the  operators 
 that  use  them  were  discussed  separately.  However,  because  these  bands  have  similar  technical 
 characteristics,  because  they  are  used  to  offer  similar  services,  and  because  many  lowerband  operators 
 employ  more  than  one  of  these  bands  to  offer  these  services,  they  are  now  discussed  in  one  cohesive 
 lowerbands  section.  Yet,  in  order  to  provide  background  on  these  four  bands  before  discussing  trends  and 
 individual  lowerband  operators,  a  brief  description  of  each  band  follows. 


 Cellular/  PCS:  In  the  United  States,  WLL  in  the  cellular  and  broadband  PCS  bands  is  still  in  an  early  stage 
 of  development,  is  currently  targeted  at  residential  subscribers,  and  is  secondary  to  the  use  of  the  spectrum 
 for  mobile  products.  AT&  T  is  currently  the  only  carrier  to  use  PCS  spectrum  to  offer  high-  speed  Internet 
 access.  616  A  handful  of  other  operators  are  using  their  existing  cellular  or  PCS  infrastructure  to  offer  fixed 
 wireless  voice  services,  but  none  offers  those  services  at  higher  speeds.  617  In  order  to  receive  universal 


 612  A  hub  is  the  point  on  a  network  where  circuits  or  lines  are  connected.  See  Harry  Newton,  Newtons 
 Telecom  Dictionary,  16  th  Ed.,  at  430. 
 613  Fixed  wireless  equipment  maker  P-  Com  believes  that  PTP  technology  offers  a  better  solution  than  PTMP 


 for  customer  requirements  above  45  Mbps.  John  Hodulik,  Broadband  Wireless  Conference  Call  Series  #  4  with  P-Com, 
 PaineWebber,  Apr.  12,  2000. 


 614  Winstar  Communications,  Inc.,  SEC  Form  10-  K405,  Dec.  31,  1999,  at  3-  4. 


 615  Id. 
 616  See  Section  II.  D,  Major  Lowerband  Operators,  infra. 
 617  Centennial  Communications  has  been  operating  a  WLL  system  in  Puerto  Rico  since  1997  using  its 
 broadband  PCS  spectrum.  Its  offering  involves  restricting  the  use  of  a  mobile  phone  to  one  location,  and  many  of 
 its  WLL  customers  use  their  handsets  for  their  primary  telecommunications  line.  Bringing  Local  Loop  to  Puerto 
 Rico,  WIRELESS  BUSINESS  &  TECHNOLOGY,  Jan.  1998,  at  27;  Elizabeth  V.  Mooney,  Wireless  Is  Foundation  To 
 Launch  Other  Services,  RCR  RADIO  COMMUNICATIONS  REPORT,  Nov.  8,  1999;  Hargray  Wireless,  WLL  offerings 
 (visited  Feb.  23,  2000)  <http://  www.  hargraywireless.  com/  products/  plans.  html>. 
88
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 service  funds  to  offset  high-  cost  residential  telephone  service,  618  wireless  carriers,  like  local  wireline 
 carriers,  must  be  granted  Eligible  Telecommunications  Carrier  (  ETC)  status  by  the  state  in  which  they 
 plan  to  operate.  619  A  few  operators  in  the  cellular  and  PCS  bands  have  been  granted  ETC  status  and  have 
 become  eligible  for  universal  service  funds,  including  Sprint  PCS  in  California  and  Arkansas,  United  States 
 Cellular  Corp.  in  Washington,  and  Centennial  Communications  in  Puerto  Rico.  620  As  of  year-  end  2000, 
 Western  Wireless  had  received  ETC  approval  in  10  states  and  had  applications  pending  in  three  additional 
 states.  621  At  that  time,  the  company  was  offering  service  to  2,500  customers  in  100  communities  in  five 
 states.  622 


 MDS:  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,  and  often  hold  licenses  for  spectrum  in  different  markets. 
 MDS  has  become  a  new  vehicle  for  offering  high-  speed  Internet  access  and  broadband  services  to 
 residential  and  SOHO  customers.  MDS  companies  were  originally  licensed  to  provide  analog  television 
 programming  to  homes.  However,  since  1997,  they  have  instead  refocused  their  business  operations  on 
 offering  high-  speed  Internet  access. 


 WCS:  WCS  spectrum  is  located  in  the  2.  3  GHz  band.  There  are  two  10  megahertz  blocks  of  WCS 
 spectrum  covering  the  52  Major  Economic  Areas  (MEAs)  of  the  United  States,  and  two  5  megahertz 
 blocks  covering  the  12  Regional  Economic  Area  Groupings  (REAGs).  The  spectrum  was  auctioned  in 
 April  1997  with  flexible  rules  for  its  use  by  licensees.  623  AT&  T  and  WorldCom  are  currently  using  WCS 
 spectrum  to  offer  fixed  wireless  services  in  a  few  markets.  624 


 Unlicensed:  Unlicensed  spectrum  consisting  of  26  megahertz  in  the  900  MHz  band,  83.5  megahertz  in  the 


 618  According  to  Western  Wireless  Chairman  and  CEO  John  Stanton,  If  our  competitor  has  the  subsidies 
 and  we  do  not,  then  we  cant  compete  on  equal  footing.  Western  Wireless  Breaks  ETC  Barrier  For  Wireless 
 Providers,  COMMUNICATIONS  TODAY,  Oct.  5,  1999,  available  in  1999  WL  28525915. 


 619  47  U.  S.  C.    214(  e)(  2). 


 620  See  Fifth  Report  at  17788;  Marcia  Martinek,  No  Place  Like  Home,  WIRELESS  REVIEW,  Oct.  1,  2000, 
 available  in  2000  WL  7119421;  Universal  Service  Administrative  Company,  Federal  Universal  Service  Support 
 Mechanisms  Fund  Size  Projections  and  Contribution  Base  for  the  First  Quarter  2001,  Appendix  LI2,  available  at 
 Quarterly  Administrative  Filings,  High  Cost  &  Low  Income,  Schools  &  Libraries,  and  Rural  Health  Care, 
 <http://  www.  fcc.  gov/  ccb/  universal_  service/  quarter.  html#  2001>. 


 621  Western  Wireless  Corp.,  SEC  Form  10-  K405,  Mar.  30,  2001,  at  7. 


 622  Ric  Prentiss,  et.  al.,  WWCA  Reports  4Q00:  Revenues  and  EBITDA  Beat  Our  Expectations,  Higher  Churn, 
 RAYMOND  JAMES  &  ASSOCIATES,  INC.,  Feb.  13,  2001,  at  1. 
 623  See  FCC  Auctions  website  (visited  Jan.  24,  2001)  http://  www.  fcc.  gov/  wtb/  auctions/  (  WCS  spectrum  may 


 be  used  for  any  fixed,  mobile,  radiolocation  or  broadcast-  satellite  (sound)  use  consistent  with  the  international 
 agreements  concerning  spectrum  allocations,  and  subject  to  the  technical  rules  of  Part  27,  Title  47  of  the  Code  of 
 Federal  Regulations.) 


 624  See  Section  II.  D,  Major  Lowerband  Operators,  infra. 
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 2.4  GHz  band,  and  300  megahertz  in  the  5  GHz  band  is  also  used  for  fixed  wireless  communications.  625 
 Operators  can  use  these  bands  without  an  FCC  license  for  a  variety  of  radio  transmissions,  but  are  not 
 protected  from  interference  and  may  not  cause  interference  to  licensed  users  in  the  spectrum.  Unlicensed 
 fixed  applications  primarily  use  spread  spectrum  technology  for  long  range  transmissions  in  order  to 
 minimize  the  risk  of  interference  with  other  operators.  Unlicensed  spectrum  is  used  for  many  purposes, 
 including  short-  range  data  transmissions,  626  cordless  phones,  microwave  ovens,  and  amateur  radio; 
 however,  Appendix  A  focuses  on  its  use  for  high-  speed  Internet  access  and  other  commercial  broadband 
 services.  627 


 B.  Recent  Developments 
 During  2000,  fixed  wireless  carriers  took  advantage  of  the  Commissions  increased  flexibility  regarding  the 
 use  of  MDS  licenses.  In  September  1998,  the  Commission  issued  an  order  authorizing  the  use  of  MDS 
 spectrum  for  two-  way  services.  628  During  August  2000,  MDS  licensees  submitted  approximately  2,300 
 applications  to  offer  two-  way  services  during  a  two-  week  filing  window.  629  On  February  1,  2001,  the 
 Commission  listed  the  applications  that  had  been  accepted  for  filing,  and  if  no  petitions  to  deny  were  filed 
 on  these  applications  within  60  days,  they  would  be  automatically  granted. 


 In  addition,  as  mentioned  in  Section  II.  B.  1.  c.,  supra,  the  Commission  began  the  process  of  allocating 
 spectrum  for  advanced  wireless  services,  including  3G,  during  2000.  One  of  the  bands  under  consideration 
 for  3G  services  is  the  2500-  2690  MHz  band,  which  is  currently  used  by  MDS  and  ITFS  operators.  630  In 
 March  2001,  the  Commission  and  NTIA  released  final  studies  of  how  this  band  is  used  and  its  potential  for 
 accommodating  3G  mobile  systems.  631 


 C.  Rollout 
 Over  the  past  year,  the  Commission  has  begun  tracking  the  rollout  of  fixed  wireless  services  on  a 
 county-  by-  county  basis.  632  Based  on  its  analysis,  the  Commission  estimates  that  there  are  at  least 


 625  See,  generally,  47  CFR  Part  15. 


 626  See  Section  II.  B.  3.  d.,  Short-  Range  Data  Transmission,  supra. 
 627  See  Section  II.  D,  Major  Lowerband  Operators,  infra. 
 628  See  Fifth  Report,  at  17789. 
 629  Prior  to  August  2000,  several  companies  offered  two-  way  MDS  services  pursuant  to  waivers  granted  by 
 the  Commission. 
 630  See  Section  II.  B.  1.c.,  3G  Developments,  supra. 


 631  Federal  Communications  Commission,  Spectrum  Study  of  the  2500-  2690  MHz  Band  The  Potential  for 
 Accommodating  Third  Generation  Mobile  Systems,  Final  Report,  Mar.  30,  2001.  Department  of  Commerce,  The 
 Potential  for  Accommodating  Third  Generation  Mobile  Systems  in  the  1710-  1850  MHz  Band:  Federal  Operations, 
 Relocation  Costs,  and  Operational  Impacts,  Final  Report,  Mar.  2001. 


 632  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  2000  Census  estimates.  Fourth, 
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 276  different  lowerband  operators  providing  fixed  wireless  services  in  526  different  counties.  633 
 These  counties  contain  150  million  people,  or  53  percent  of  the  U.  S.  population.  634 


 D.  Major  Lowerband  Operators 
 AT&  T  Digital  Broadband.  At  the  writing  of  the  Fifth  Report,  AT&  T  was  serving  2,800  residential 
 customers  in  the  Dallas-  Fort  Worth,  TX  area  with  its  fixed  wireless  Digital  Broadband  service.  635  Since 
 then,  it  has  launched  the  service  in  San  Diego  and  Los  Angeles,  CA;  Houston,  TX;  and  Anchorage,  AK.  636 
 As  of  January  2001,  it  had  sold  a  total  of  20,000  lines  to  12,000  households.  637  AT&  T  plans  to  deploy  the 
 service  to  10  additional  markets  by  the  end  of  2001,  when  the  company  expects  it  will  cover  about  3.  5 
 million  homes  and  have  100,000  customers.  638  AT&  T  uses  broadband  PCS  spectrum  for  Digital 
 Broadband  in  Dallas,  Anchorage,  and  San  Diego,  but  uses  WCS  spectrum  in  Los  Angeles  and  Houston  and 
 plans  to  use  WCS  spectrum  in  all  of  its  subsequent  fixed  wireless  rollouts.  639  Using  WCS  for  fixed 
 wireless  allows  AT&  T  to  allocate  all  of  its  broadband  PCS  spectrum  for  mobile  service.  640 


 For  $34.95  per  month,  AT&  Ts  Digital  Broadband  service  gives  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.  641  AT&  T  is 


 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  in  the 
 lowerbands.  Therefore,  the  analysis  may  not  include  certain  companies  that  do  not  make  the  information  on  their 
 fixed  wireless  offerings  easily  obtainable  or  publicly  available. 


 633  See  Appendix  E,  Map  7,  p.  E-  8. 


 634  Many  of  these  lowerband  providers  serve  only  business  customers.  Residential  fixed  wireless  Internet 
 access  is  available  in  at  least  333  different  counties.  These  counties  contain  approximately  100  million  people  or 
 35  percent  of  the  U.  S.  population. 


 635  Digital  Broadband  is  also  referred  to  as  Project  Angel.  See  Fifth  Report,  at  17787. 


 636  Blackwell  Project  Angel  Article;  Marcia  Martinek,  Angel  in  the  Outfield,  WIRELESS  REVIEW,  Sept.  30, 
 2000,  available  in  2000  WL  7119396  (  Angel  in  the  Outfield);  Douglas  Broadband  Article. 
 637  Sue  Marek,  AT&  T  Wireless  Trims  Angels  Wings,  WIRELESS  WEEK,  Feb.  5,  2001,  at  6. 


 638  Id.  AT&  T  initially  planned  to  serve  40  markets  and  1.5  million  potential  customers  by  the  end  of  2001, 
 but  scaled  back  its  plans  in  January  2001.  Id.;  Angel  in  the  Outfield. 
 639  Blackwell  Project  Angel  Article;  AT&  T  Names  Next  Fixed  Wireless  Cities,  Selects  Spectrum, 
 WASHINGTON  TELECOM  NEWSWIRE,  July  25,  2000,  available  in  2000  WL  6837556  (quoting  John  Zeglis,  Chairman 
 of  AT&  T  Wireless  Group) 


 640  Blackwell  Project  Angel  Article.  AT&  T  also  holds  39  GHz  and  LMDS  licenses,  although  the  company 


 has  released  little  public  information  on  how  it  is  using  this  spectrum.  See  Fifth  Report,  at  17801. 
 641  Blackwell  Project  Angel  Article;  AT&  T,  Digital  Broadband  Services  California  (visited  Apr.  4,  2001) 


 <http://  www.  iatt.  com/  local/  ca/  local/  local_  services.  html>.  Digital  Broadband  costs  AT&  T  $700-$  750  per  customer 
 to  deploy,  and  about  two-  thirds  of  that  expense  is  for  end-  user  equipment.  AT&  T  expects  prices  to  fall  to  around 
91
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 planning  to  boost  its  downstream  speeds  to  one  Mbps  in  the  future.  642  Furthermore,  AT&  T  reports  that  60 
 percent  of  its  customers  sign  up  for  voice,  as  well  as  data,  service.  643 


 AT&  T  reports  that,  in  Dallas,  it  is  using  the  same  towers  to  provide  both  fixed  and  mobile  services  and  that 
 only  five  additional  towers  had  to  be  erected  for  Digital  Broadband.  644  In  Anchorage,  AT&  T  reportedly 
 uses  20  towers  for  Digital  Broadband,  most  of  which  are  already  used  for  mobile  telephone  service.  645 


 AT&  T  originally  planned  to  deploy  Digital  Broadband  to  homes  and  small  businesses  in  markets  not 
 covered  by  its  wireline  broadband  properties,  namely  its  cable  systems  or  arrangements  with  cable 
 operators,  which  cover  about  50  percent  of  U.  S.  markets.  646  However,  because  AT&  T  is  planning  to  split 
 itself  into  four  separate  companies,  its  fixed  wireless  assets  will  become  part  of  AT&  T  Wireless,  while  its 
 cable  properties  will  become  part  of  AT&  T  Broadband.  647  AT&  T  has  attempted  to  avoid  potential 
 competition  between  its  two  spin-  offs  by  prohibiting  AT&  T  Wireless  from  offering  fixed  wireless  service 
 under  the  AT&  T  brand  name  in  markets  where  AT&  T  Broadband  is  offering  cable  modem  service.  648 


 Sprint.  As  of  April  2001,  Sprint  had  launched  Broadband  Direct,  its  commercial  MDS-  based  high-  speed 
 Internet  access  service,  in  16  cities  across  the  United  States.  649  As  of  October  2000,  Sprint  had 
 approximately  10,000  customers  in  Phoenix,  its  first  Broadband  Direct  market.  650 


 Sprints  residential  Broadband  Direct  service  costs  $39.95  per  month  for  downstream  speeds  of  one  Mbps  651  and  upstream  speeds  of  512  kbps.  Sprint  also  charges  $299  for  installation,  and  $99  for 


 $500  per  customer  eventually.  Jeff  May,  Out  of  Thin  Air    AT&  Ts  Home-  Grown  Fixed  Wireless  Technology  Has 
 Yet  to  Bear  Fruit,  THE  STAR-  LEDGER,  Sept.  10,  2000,  available  in  2000  WL  26254641. 


 642  Douglas  Broadband  Article. 


 643  Jeff  May,  Out  of  Thin  Air    AT&  Ts  Home-  Grown  Fixed  Wireless  Technology  Has  Yet  to  Bear  Fruit, 
 THE  STAR-  LEDGER,  Sept.  10,  2000,  available  in  2000  WL  26254641. 
 644  Angel  in  the  Outfield. 


 645  Wireless  Internet  Gets  Early  Test  in  Alaska,  ASSOCIATED  PRESS,  Sept.  16,  2000. 
 646  See  Fifth  Report,  at  17787. 
 647  AT&  T  Splits  into  4  Companies,  Spinning  Off  Wireless  Entirely,  MOBILE  COMMUNICATIONS  REPORT,  Oct. 
 30,  2000,  available  in  2000  WL  8763494. 
 648  Id. 


 649  Phonenix  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  Chicagos 
 Residential  and  Small  Business  Customers,  News  Release,  Sprint,  Mar.  26,  2001. 


 650  Douglas  Broadband  Article. 


 651  Sprint  Rolls  Out  Wireless  DSL  in  Phoenix,  COMMUNICATIONS  DAILY,  May  9,  2000. 
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 equipment  with  a  two-  year  contract  or  $299  for  equipment  for  service  on  a  monthly  basis.  652  As  mentioned 
 in  the  Fifth  Report,  Sprint  completed  a  major  investment  in  MDS  equipment  manufacturer,  Hybrid 
 Networks,  in  1999  and  is  using  Hybrid  Networks  equipment  in  all  of  its  Broadband  Direct  rollouts.  653 


 Sprint  holds  MDS  licenses  covering  30  million  people  in  90  markets  654  and  plans  to  offer  its  fixed  wireless 
 product  in  40  markets  by  the  end  of  2001.  655  Sprint  is  targeting  the  50  million  homes  it  believes  will  not 
 have  access  to  any  other  type  of  broadband  service  over  the  next  few  years.  656  In  August  2000,  Sprint  filed 
 applications  to  offer  two-  way  services  in  45  markets.  657 


 In  July  2000,  Sprint,  WorldCom,  and  Nucentrix  Broadband  Services,  Inc.  (  Nucentrix)  developed 
 technical  agreements  on  spectrum  management  issues.  These  agreements  allow  MDS  carriers  to  serve  their 
 entire  geographic  footprint  without  interference  from  MDS  carriers  in  adjacent  markets.  More  than  12 
 carriers  have  agreed  to  abide  by  the  technical  standards  in  the  agreements.  658 


 WorldCom.  As  the  result  of  a  series  of  acquisitions  in  1999,  WorldCom  holds  MDS  licenses  covering  45 
 million  households  in  78  markets.  659  WorldCom  is  using  these  licenses  to  offer  fixed  wireless  high-  speed 
 Internet  access  to  residential  and  SOHO  customers.  As  of  January  2001,  the  company  had  launched 
 service  in  three  markets,  Memphis,  TN;  Baton  Rouge,  LA;  and  Jackson,  MS,  and  was  running  service 
 trials  in  two  additional  markets:  Boston,  MA;  and  Dallas-  Fort  Worth,  TX.  In  all  of  these  cities  except 
 Boston,  WorldCom  is  using  both  MDS  and  WCS  spectrum.  660  In  August,  WorldCom  filed  applications  to 
 offer  two-  way  service  in  60  markets  661  and,  at  that  time,  planned  to  roll  out  fixed  wireless  service  to  30 
 metropolitan  areas  by  the  end  of  2001.  662 


 652  This  is  in  Denver.  Erika  Stutzman,  Sprint  Wireless  Comes  to  Boulder,  Colo.,  Area,  KNIGHT-  RIDDER 
 TRIBUNE  BUSINESS  NEWS:  DAILY  CAMERA    BOULDER,  COLORADO,  Nov.  14,  2000,  available  in  2000  WL 
 29453622. 


 653  Sprint  Selects  Hybrid  Networks  Fixed  Broadband  Wireless  System  For  Deployment  of  Sprint  Broadband 


 Direct  in  Fresno,  Calif.,  News  Release,  Hybrid  Networks,  Jan.  23,  2001. 
 654  Douglas  Broadband  Article. 


 655  Id. 
 656  Id.  (quoting  Timothy  Sutton,  president  of  Sprints  broadband  wireless  group). 
 657  Sprint  Files  for  Two-  Way  MMMDS  Licenses  in  45  Major  Markets;  Services  Area  Covers  Nearly  25 
 Million  Households,  Plus  Small  Businesses,  PR  NEWSWIRE,  Aug.  22,  2000. 
 658  Nucentrix,  Sprint,  and  WorldCom  Announce  Spectrum  Management  Plans,  News  Release,  Sprint,  July  10, 


 2000. 
 659  See  Fifth  Report,  at  17789. 


 660  Id.,  at  17790. 
 661  Matt  Moore,  WorldCom  Seeking  Licenses  for  Fixed-  Wireless  Services,  ASSOCIATED  PRESS  NEWSWIRES, 
 Aug.  15,  2000. 
 662  Greg  Keizer,  E-  Goals  for  01,  SMALL  BUSINESS  ADVISOR  FROM  ZDWIRE,  Dec.  28,  2000,  available  in  2000 


 WL  31553911. 
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 WorldCom  is  charging  its  residential  customers  $39.95  per  month  for  two-  way  speeds  of  up  to  310  kbps 
 and  businesses  $300-$  600  per  month  for  speeds  ranging  from  128  kbps  to  8  Mbps.  663 


 In  addition  to  its  commercial  rollout  plans,  WorldCom  announced  in  April  2000  that  it  would  use  MDS  to 
 deliver  high-  speed  Internet  access  to  schools,  libraries,  and  community  centers  in  four  communities   
 Raleigh,  NC;  Houma,  LA;  Dothan,  AL;  and  Hattiesburg,  MS    beginning  in  August  2000  for  the 
 2000/  2001  school  year.  664 


 Nucentrix.  Nucentrix  currently  offers  two-  way  high-  speed  MDS-  based  Internet  access  service  in  Austin 
 and  Sherman-  Denison,  TX,  665  and  is  conducting  a  trial  of  the  service  in  Amarillo,  TX.  In  February  2001, 
 Nucentrix  announced  it  would  extend  its  trial  in  Amarillo,  where  it  is  testing  Ciscos  VOFDM  technology 
 with  over  125  customers,  until  April  2001.  666  Nucentrix  holds  MDS  licenses  that  cover  90  small  and 
 medium  markets  across  Texas  and  the  Midwest.  667  In  August  2000,  Nucentrix  filed  applications  to  offer 
 two-  way  service  in  70  markets.  668 


 Other  MDS  Operators.  In  addition  to  the  three  companies  discussed  above,  at  least  23  other  companies 
 offer  fixed  wireless  services  using  MDS  spectrum  in  approximately  28  different  counties.  669  These 
 companies  are  generally  small,  independent  MDS  licensees  offering  Internet  access  at  speeds  of  up  to  11 
 Mbps  downstream  to  a  limited  number  of  residential  and  small  business  customers  in  one  to  three  markets 
 apiece.  These  markets  are  generally  smaller  towns  and  cities.  For  example,  LMA  Systems  offers  two-  way 
 Internet  access  at  1.54  Mbps  downstream  and  768  kbps  upstream  in  Wilkes-  Barre  and  Sunbury,  PA.  670  In 
 addition,  Alaska  Wireless  offers  two-  way  MDS-  based  Internet  access  in  Fairbanks,  AK.  671  Some  MDS 
 carriers    including  QuadraVision  in  Carson  City  and  Reno,  NV  and  American  Rural  TV  in  La  Junta,  CO 
   offer  fixed  wireless  Internet  access  on  a  one-  way  basis  and  use  a  telephone  line  for  the  return  path. 


 Providers  in  the  Unlicensed  Band.  As  mentioned  above,  Metricom  uses  unlicensed,  as  well  as  WCS, 
 663  Paul  Kagan  Associates,  Inc.,  WIRELESS/  PRIVATE  CABLE  INVESTOR,  Mar.  9,  2000,  at  1.  WorldCom  has 
 stated  that  its  capital  expenditures  for  rolling  out  MMDS  services  are  approximately  $2000  per  square  mile. 
 Telephony,  COMMUNICATIONS  DAILY,  Mar.  8,  2000. 


 664  MCI  WorldComs  Wireless  Internet  to  Help  Bridge  the  Digital  Divide,  News  Release,  WorldCom,  Apr. 


 26,  2000. 
 665  Nucentrix  Broadband  Networks  Announces  Effectiveness  of  Shelf,  BUSINESS  WIRE,  Dec.  17,  1999. 


 666  Nucentix  and  Cisco  Extend  Broadband  Wireless  Trial  in  Amarillo,  News  Release,  Nucentrix,  Feb.  2, 
 2001. 
 667  Id. 


 668  Nucentrix  Broadband  Networks  Announces  FCC  Notice  of  Fixed  Wireless  Applications,  News  Release, 
 Nucentrix,  Nov.  30,  2000. 
 669  See  Table  1,  p.  A-  20. 


 670  LMA  Systems,  Coverage  Areas  (visited  Mar.  6,  2001)  <http://  www.  lmasys.  com/  homepage.  htm>. 
 671  Regional  Wireless  Operators  Select  Hybrid  Networks  2-  Way  Today  Solution  to  Launch  Multiple  Markets, 
 PR  NEWSWIRE,  Jan  10,  2000. 
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 spectrum  for  Ricochet,  its  wireless  Internet  access  service  provided  by  modem  devices  attached  to  laptop 
 computers.  672  Ricochet  offers  users  mobile  Internet  access  speeds  of  128  kbps  in  13  markets,  673  including 
 Atlanta,  Baltimore,  Denver,  Los  Angeles,  Minneapolis,  New  York  City,  and  San  Francisco.  674  Metricom 
 continues  to  operate  its  28.  8  kbps  speed  service  in  portions  of  San  Francisco  and  in  the  Seattle  and 
 Washington,  D.  C.  metropolitan  areas  while  these  markets  are  converted  to  128  kbps  service.  675 


 Most  of  the  other  companies  that  use  unlicensed  spectrum  to  offer  Internet  access  are  local  and  regional 
 ISPs  that  offer  the  service  on  a  fixed,  not  mobile,  basis  in  an  average  of  three  markets  apiece.  Many  of 
 these  companies  offer  traditional  wireline  dial-  up  Internet  access  as  well.  In  part  because  companies 
 operate  in  these  bands  without  a  license  from  the  Commission,  it  is  difficult  to  track  who  is  operating 
 where.  Estimates  of  the  number  of  companies  using  unlicensed  spectrum  to  provide  Internet  access  vary. 
 One  equipment  manufacturer  estimates  there  are  around  800,  676  while  another  believes  there  are  50  to  100.  677  One  industry  analyst  estimates  there  are  just  under  200.  678  Based  on  obtainable,  publicly-  available 


 information,  the  Commission  estimates  there  are  at  least  241  different  companies  using  unlicensed 
 spectrum  to  provide  high-  speed  fixed  wireless  Internet  access  in  approximately  503  different  counties.  679 
 Approximately  143  million  people  (or  50  percent  of  the  U.  S.  population)  live  in  counties  with  at  least 
 unlicensed  fixed  wireless  Internet  provider. 


 Most  unlicensed  operators  offer  Internet  access  speeds  ranging  from  384  kbps  to  15  Mbps,  with  some 
 advertising  speeds  as  high  as  100  Mbps.  Many  of  the  carriers  are  targeting  business  customers,  while 
 others  serve  both  businesses  and  residences.  Furthermore,  many  operators  offer  unlicensed  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.  680 


 Unlicensed  spectrum  is  also  used  for  short-  range  data  transmissions  and  wireless  LAN/  WAN  connections. 
 672  See  Section  II.  B.  2.  d(  iii),  Metricom,  supra. 
 673  Metricom,  Coverage  Maps  (visited  Feb.  19,  2001) 
 <http://  www.  metricom.  com/  about_  us/  coverage_  maps/  index.  html>. 
 674  Metricom,  Inc.,  SEC  Form  10-  K,  Apr.  30,  2001,  at  1. 


 675  Id. 
 676  Unlicensed  Update    The  Service  Providers,  BROADBAND  WIRELESS  BUSINESS,  June/  July  2000,  at  25 
 (citing  Tom  Walusek,  BreezeCOM).  According  to  Walusek,  the  800  includes  ISPs  with  only  one  functioning  link. 
 Id. 


 677  Id.  (citing  Scott  Plumlee,  C-  Spec). 


 678  Unlicensed  Update    The  Service  Providers,  BROADBAND  WIRELESS  BUSINESS,  June/  July  2000,  at  25 
 (citing  Andy  Fuertes,  Allied  Business  Intelligence). 
 679  See  Appendix  E,  Map  8,  p.  E-  9.  This  does  not  include  Metricom,  as  its  service  is  mobile.  In  addition, 


 many  of  these  companies  offer  only  business  service.  Residential  fixed  wireless  Internet  access  via  unlicensed 
 spectrum  is  offered  in  at  least  309  different  counties.  These  counties  contain  approximately  83  million  people  or 
 29  percent  of  the  U.  S.  population. 


 680  See  note  632,  supra. 
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 For  example,  MobileStar  Networking  Corp.  (  MobileStar)  uses  unlicensed  spectrum  to  provide  WLAN 
 service  in  over  370  locations  across  the  United  States,  including  airports,  hotels,  restaurants,  and  multi-tenant 
 office  buildings.  681  Bluetooth  and  802.11b,  as  discussed  above,  are  two  short  range  data 
 transmission  technology  standards  that  operate  using  unlicensed  spectrum.  682  Bluetooth  is  currently  being 
 integrated  into  numerous  electronic  devices,  such  as  mobile  phones,  handheld  devices,  and  personal 
 computers,  in  order  to  allow  users  to  transfer  data  among  the  devices  without  using  wires  or  cables. 
 802.11b  is  a  technology  that  is  used  to  connect  multiple  computers  to  servers  in  wireless  LANs.  683 


 III.  UPPERBANDS 


 The  upperband  carriers  use  three  different  bands    the  24  GHz  band,  the  28  GHz  (LMDS)  band,  and  the 
 39  GHz  band    to  offer  business  customers  a  variety  of  voice  and  broadband  services,  such  as  video 
 programming  distribution,  video  teleconferencing,  and  wireless  local  loop  telephony,  as  well  as  Internet 
 access  and  other  high-  speed  data  transmission  services.  684  Upperband  carriers  operate  in  83  counties 
 across  the  United  States.  685  As  is  the  case  with  lowerband  operators,  many  upperband  operators  use 
 multiple  spectrum  bands  to  offer  nearly  identical  services.  Recent  developments  in  the  upperband  fixed 
 wireless  sector,  as  well  as  the  major  upperband  operators,  are  discussed  in  detail  below. 


 A.  Recent  Developments 
 Auctions.  As  discussed  in  the  Fifth  Report,  the  Commission  completed  the  auction  of  2,450  39-  GHz 
 licenses  in  May  2000.  686  During  2000  and  2001,  the  Commission  adopted  rules  for  auctioning  and 
 licensing  24  GHz  spectrum.  687  24  GHz  licenses  will  consist  of  80  megahertz  of  spectrum  in  each  of  the 
 172  Economic  Areas  (  EAs)  in  the  United  States,  and  licensees  will  be  permitted  to  offer  a  variety  of 
 fixed  wireless  services.  688  As  with  the  39  GHz  band,  the  24  GHz  band  is  encumbered  by  existing  fixed 
 wireless  operators,  in  this  case,  mainly  Teligent,  Inc.  (  Teligent). 


 Bankruptcies.  During  2000  and  early  2001,  financing  for  all  CLECs,  including  upperband  fixed  wireless 
 681  MobileStar,  Locations  (visited  May  28,  2001)  <http://  www.  mobilestar.  net/  locations/  page5.  asp>.  Mobile 
 professionals  who  subscribe  to  MobileStars  service  can  bring  their  handheld  devices  and  laptop  computers  to  these 
 locations  and  obtain  high-  speed  Internet  access  without  attaching  a  cord  or  cable.  The  buildings  may  then  connect 
 to  the  Internet  using  wireline  technology. 


 682  See  Section  II.  B.  3.  d.,  Short  Range  Data  Transmissions,  supra,  for  a  detailed  discussion. 


 683  Id. 
 684  24  GHz  spans  24.  25  -  25.  25  GHz;  LMDS  spans  27.  5  -  31.  3  GHz;  39  GHz  spans  38.  6  -  40.  0  GHz.  39 
 GHz  is  often  referred  to  as  38  GHz. 
 685  See  Appendix  E,  Map  9,  at  E-  10. 


 686  See  Fifth  Report,  at  17795. 
 687  Amendments  To  Parts  1,  2,  87  and  101  of  the  Commissions  Rules  To  License  Fixed  Services  at  24  GHz, 
 Report  and  Order,  15  FCC  Rcd  16934  (2000);  Amendments  To  Parts  1,  2,  87  and  101  of  the  Commissions  Rules 
 To  License  Fixed  Services  at  24  GHz,  Order  on  Reconsideration,  FCC  01-  151  (rel.  May  17,  2001). 


 688  Id. 
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 carriers,  dropped  significantly  from  its  1999  levels.  CLECs  have  traditionally  required  large  investments  to 
 deploy  their  networks  and  build  their  businesses.  Analysts  believe  that  the  slowing  economy  and  declining 
 stock  values  in  2000,  as  well  as  the  substantial  debt  incurred  by  major  upperband  carriers  and  their 
 inability  to  show  a  profit,  have  made  it  difficult  for  these  companies  to  acquire  additional  financing.  689  The 
 result  of  these  financial  difficulties  has  been  that  three  major  upperband  carriers,  Winstar,  Advanced  Radio 
 Telecom  Corp.  (  ART),  and  Teligent,  declared  bankruptcy  during  the  first  half  of  2001. 


 On  April  18,  2001,  Winstar  filed  for  Chapter  11  bankruptcy  protection.  690  At  the  same  time,  the  company 
 filed  a  $10  billion  lawsuit  against  Lucent  alleging  that  Lucent  had  violated  its  vendor  financing  agreement 
 with  Winstar  and  had  thereby  forced  Winstar  into  bankruptcy.  691  At  the  time  of  its  bankruptcy,  Winstar 
 obtained  $75  million  in  debtor-  in-  possession  (  DIP)  financing  from  several  investment  banks  and  planned 
 to  continue  operating  and  serving  its  existing  customers.  692 


 On  March  30,  2001,  ART  announced  its  plans  to  file  a  petition  for  Chapter  11  bankruptcy  due  to 
 distressed  capital  markets  and  its  inability  to  obtain  financing.  693  The  company  stated  it  would  continue  to 
 serve  its  existing  customers  for  30  days  in  order  to  enable  them  to  transition  to  other  service  providers.  694 
 Prior  to  its  bankruptcy,  ART  sold  fixed  wireless  broadband  services  wholesale  and  to  business  customers 
 in  nine  U.  S.  markets.  695  The  company  held  39  GHz  licenses  covering  the  entire  United  States.  696  In 
 August  2000,  ART  completed  the  acquisition  of  366  39  GHz  licenses  from  Broadstream  Communications 


 689  Scott  Moritz,  Funding  Crunch  Threatens  Winstar,  Networking  Backers,  THESTREET.  COM,  Feb.  27,  2001; 
 Eileen  Kinsella,  Sector  Spotlight:  Banks  Wince  at  Looming  Telecom  Debt  Worries,  THESTREET.  COM,  Mar.  5, 
 2001;  Teligent  Posts  Wider  4  th  -Quarter  Loss  on  Aggressive  Network  Expansion,  DOW  JONES  NEWS  SERVICE,  Feb. 
 28,  2001;  Peter  Loftus,  Data-  Equipment  Firms  Trim  Views  as  Spending  Slims,  THE  WALL  STREET  JOURNAL,  Jan. 
 16,  2001,  available  in  2001  WL-  WSJ  2851064. 


 690  Winstar  Files  Voluntary  Chapter  11  Petition,  News  Release,  Winstar,  Apr.  18,  2001. 


 691  Winstar  and  Lucent  had  a  five-  year  supply  agreement,  and  Lucent  had  lent  Winstar  $700  million.  On 
 April  16,  2001,  Lucent  declared  that  Winstar  was  in  default  on  that  agreement.  Jonathan  Stempel,  Winstar  Files 
 for  Bankruptcy,  Blames  Lucent,  Reuters,  Apr.  18,  2001.  Winstar  is  suing  Lucent  for  breach  on  contract  on  its 
 strategic  partnership  agreement  with  Winstar.  Winstar  is  also  seeking  $90  million  in  immediate  injunctive  relief, 
 which  Winstar  claims  Lucent  failed  to  pay  to  Winstar  on  March  30,  2001  as  part  of  their  agreement.  However, 
 Winstar  claims  that  its  ability  to  emerge  from  bankruptcy  is  not  contingent  on  the  receipt  of  any  damage  award  in 
 this  lawsuit.  Winstar  Files  $10  Billion  Suit  Against  Lucent  Technologies,  News  Release,  Winstar,  Apr.  18,  2001. 


 692  Winstar  Files  Voluntary  Chapter  11  Petition,  News  Release,  Winstar,  Apr.  18,  2001. 


 693  Advanced  Radio  Telecom  to  File  Petition  for  Chapter  11  Bankruptcy  Protection,  News  Release,  ART, 
 Mar.  30,  2001. 
 694  Id. 


 695  See  Fifth  Report,  at  17800;  Advanced  Radio  Telecom  Announces  New  Customers,  News  Release,  ART, 
 Dec.  8,  2000;  Advanced  Radio  Telecom  Announces  Third  Quarter  2000  Financial  Results,  News  Release,  ART, 
 Nov.  13,  2000  (San  Jose,  Los  Angeles,  Washington  DC,  Houston,  Seattle,  Phoenix,  Portland,  Dallas/  Ft.  Worth, 
 and  San  Diego). 


 696  Advanced  Radio  Telecom  Announces  Third  Quarter  2000  Financial  Results,  News  Release,  ART,  Nov. 


 13,  2000.  Qwest  Communications  International  Inc.  (  Qwest)  has  a  19  percent  stake  in  ART.  See  Fifth  Report,  at 
 17800. 
97
 Federal  Communications  Commission  FCC  01-  192 
 A-  15 
 Corporation  and  its  affiliates,  and  14  39  GHz  licenses  from  Bachow  Communications  Incorporated.  697 
 On  May  21,  2001,  Teligent  filed  for  Chapter  11  bankruptcy  protection  after  the  company  failed  to  come  up 
 with  additional  financing  and  faced  default  on  its  credit  agreement.  698  During  the  month  prior  to  its 
 bankruptcy,  IDT  Corp.  (  IDT),  a  wholesale  long  distance  and  prepaid  calling  card  provider  that  also 
 purchases  telecommunications  assets  at  a  discount,  became  the  largest  shareholder  in  Teligent.  699 
 Coincident  with  that,  Teligent  announced  its  plans  to  scale  back  operations  of  the  company.  700  Teligent 
 plans  to  reorganize  and  has  received  funding  in  order  to  continue  its  operations  in  the  near  term.  701 


 Flat  Rate  Pricing  Plans.  During  2000  and  early  2001,  four  upperband  carriers    Winstar,  Teligent,  XO 
 Communications,  Inc.  (  XO,  formerly  Nextlink  Communications),  and  ART    began  offering  flat  rate 
 pricing  plans  designed  for  small  and  medium  sized  businesses.  For  example,  Teligent  announced  the 
 launch  of  its  Integrated  Access  service  in  its  top  21  markets  during  February  2001.  702  With  Integrated 
 Access,  businesses  can  receive  a  bundle  of  digital  and  analog  voice  and  data  services  over  a  single  high-capacity 
 link  for  a  low  flat  monthly  rate.  703  Teligent  has  been  targeting  businesses  with  around  25 
 employees  for  the  service.  704  In  September  2000,  XO  introduced  XOptions  in  all  of  its  markets.  XOptions 
 is  a  group  of  flat-  rate  service  packages  combining  local,  long  distance,  Internet  access,  and  web-  hosting 
 services.  705 


 B.  Major  Operators 
 Teligent.  Since  1998,  Teligent  has  provided  a  bundle  of  broadband  fixed  wireless  telecommunications 
 services  to  small  and  medium  sized  businesses  using  a  combination  of  its  24  GHz  licenses,  which  cover  74 
 markets  nationwide,  706  and  leased  wireline  networks.  At  the  end  of  2000,  Teligents  customer  base  had 


 697  See  Fifth  Report,  at  17800;  Advanced  Radio  Telecom  Closes  Major  Acquisitions,  News  Release,  ART, 
 Aug.  28,  2000. 
 698  Teligent  Files  for  Chapter  11  Bankruptcy  Protection,  REUTERS,  May  21,  2001. 


 699  Shawn  Young,  IDT  Scavenges  for  Bargains  In  Phone-  Upstart  Wreckage,  THE  WALL  STREET  JOURNAL, 
 May  11,  2001,  available  at  www.  wsj.  com;  Yuki  Noguchi,  Teligent  to  Cut  900  Jobs    Sources  Say  Firm  Is  Near 
 Bankruptcy,  WASHINGTON  POST,  May  11,  2001,  at  E-  1. 


 700  Id. 


 701  Teligent  Files  for  Chapter  11  Bankruptcy  Protection,  REUTERS,  May  21,  2001. 
 702  Teligent  Launches  High-  Capacity  Integrated  Access  Solution  for  Businesses,  News  Release,  Teligent, 
 Feb.  21,  2001. 
 703  Id. 


 704  Id. 
 705  Nextlink  and  Concentric  Become  XO  Communications,  News  Release,  XO,  Sept.  25,  2000;  XO 
 Communications  $45O  Mln  Notes  Rated  CCC+  By  S&  P,  CAPITAL  MARKETS  REPORT,  Jan.  9,  2001. 
 706  Teligent  Reports  Third  Quarter  Financial  Results,  Completes  Launch  of  First  15  Markets,  News  Release, 


 Teligent,  Nov.  11,  1998. 
98
 Federal  Communications  Commission  FCC  01-  192 
 A-  16 
 grown  to  35,500,  up  236  percent  from  its  15,000  customers  at  the  end  of  1999.  707  Teligent  had  also 
 installed  490,318  lines,  up  195  percent  from  the  end  of  1999,  and  had  4,469  buildings  on-  net  (i.  e., 
 connected  to  Teligents  network),  up  79  percent  from  2,  500  at  the  end  of  1999.  708  Of  those  4,469  on-  net 
 buildings,  60  percent  had  fixed  wireless  installations.  709  And  90  percent  of  the  327  on-  net  buildings  added 
 during  the  fourth  quarter  of  2000  were  equipped  with  fixed  wireless  connections.  710 


 Despite  this  growth,  Teligents  financial  difficulties,  including  a  heavy  debt  load  and  inability  to  obtain 
 additional  financing,  forced  the  company  into  bankruptcy  in  May  2001.  As  of  April  2001,  Teligent  had 
 been  serving  43  U.  S.  markets.  711  Teligent  recently  announced  its  plan  to  cut  back  operations  in  at  least  11 
 markets.  712 


 Winstar.  As  of  April  2001,  Winstar  was  using  its  28  GHz  and  39  GHz  licenses  to  provide  a  package  of 
 WLL  services  in  60  markets  nationwide.  Winstar  sells  local,  long  distance,  high-  speed  data  and  Internet 
 access,  and  information  services  to  business  customers  and  other  carriers  at  speeds  up  to  155  Mbps.  713 
 Winstar  finished  2000  with  1,040,000  access  lines,  an  increase  of  68  percent  from  the  end  of  1999.  714 
 Approximately  52  percent  of  those  one  million  lines  were  on-  net,  and  85  percent  of  the  120,000  lines  added 
 during  the  fourth  quarter  of  2000  were  on-  net.  715  Winstar  also  had  4,400  buildings  on-  net  at  the  end  of 
 2000,  up  159  percent  from  its  1,700  buildings  on-  net  at  the  end  of  1999.  716  Those  4,400  buildings  contain 
 125,000  businesses.  717  Winstar  also  had  access  rights  to  over  14,700  buildings,  which  contain  400  hub 
 sites.  718  At  the  end  of  2000,  250  of  those  hub  sites  were  operational,  up  from  142  at  the  end  of  1999.  719 
 On  April  5,  2001,  Winstar  announced  that,  due  to  its  financial  difficulties,  it  was  halting  its  plans  for 
 domestic  and  international  expansion,  720  and  on  April  18,  2001,  the  company  filed  for  bankruptcy.  721 


 707  Teligent  Reports  $152  Million  in  2000  Revenue;  Records  Nearly  400  Percent  Growth  in  Second  Full  Year 
 of  Operations,  News  Release,  Teligent,  Feb.  28,  2001. 
 708  Id. 


 709  Id. 
 710  Id. 
 711  See  Teligent,  About  Us  (visited  Apr.  23,  2001)  <http://  www.  teligent.  com/  docs/  aboutus.  html>. 
 712  Yuki  Noguchi,  Teligent  to  Cut  900  Jobs    Sources  Say  Firm  Is  Near  Bankruptcy,  WASHINGTON  POST, 
 May  11,  2001,  at  E-  1. 
 713  See  Fifth  Report,  at  17797. 


 714  Winstar  Reports  Strong  Fourth  Quarter  Results,  News  Release,  Winstar,  Feb.  27,  2001;  See  Fourth 
 Report,  at  E-  13. 
 715  Winstar  Reports  Strong  Fourth  Quarter  Results,  News  Release,  Winstar,  Feb.  27,  2001. 


 716  Id. 
 717  Id. 
 718  Id. 
 719  Id. 
 720  Winstar  Communications  Cuts  2,000  Jobs,  REUTERS,  Apr.  5,  2001. 
99
 Federal  Communications  Commission  FCC  01-  192 
 A-  17 
 XO  Communications  (formerly  Nextlink).  XO  holds  LMDS  and  39  GHz  licenses  covering  95  percent  of 
 the  population  of  the  30  largest  U.  S.  cities  and  offers  fixed  wireless  broadband  services  using  those  licenses 
 to  business  customers  in  27  markets.  722  XO  also  operates  facilities-  based  CLEC  networks  that  provide 
 wireline  telecommunications  services  in  53  markets  across  the  United  States.  723  The  company  uses  both 
 wireline  and  fixed  wireless  technologies  to  connect  its  customers  to  its  network,  and  in  places  where  a  fiber 
 connection  is  not  practical  or  economic,  XO  deploys  fixed  wireless  broadband  connections  between  an 
 antenna  on  its  customers  roof  and  an  antenna  attached  to  XOs  fiber  ring.  724  XO  claimed  that,  as  of 
 February  2001,  it  served  more  than  1,900  buildings  using  its  own  facilities.  725 


 In  June  2000,  XO  completed  its  acquisition  of  DSL  provider,  Concentric  Network  Corporation 
 (  Concentric).  726  Prior  to  the  merger,  XO  had  formed  a  partnership  with  Concentric,  in  which  the 
 companies  jointly  offered  voice,  DSL,  and  dedicated  Internet  services,  with  one  bill  and  one  point  of 
 contact.  727  The  DSL  facilities  give  XO  a  third  facilities-  based  vehicle,  in  addition  to  fiber  and  fixed 
 wireless,  for  accessing  business  customers.  728 


 Touch  America.  Touch  America  holds  LMDS  licenses  covering  significant  portions  of  the  inland  Pacific 
 Northwest,  northern  and  central  Rocky  Mountain  regions  and  the  northern  Plains  states.  729  The  company 
 uses  both  its  fixed  wireless  and  wireline  assets,  which  include  an  18,000-  route-  mile  fiber  network,  to 
 provide  voice  and  data  services  to  business  and  government  customers,  as  well  as  to  other  carriers.  Touch 
 America  currently  offers  voice  and  data  services  using  LMDS  spectrum  in  four  locations:  Billings  and 
 Butte,  MT;  Boise,  ID;  and  Spokane,  WA.  730  In  each  city,  Touch  America  has  deployed  one  base  station 
 with  a  three  mile  radius.  731 


 721  Winstar  Files  Voluntary  Chapter  11  Petition,  News  Release,  Winstar,  Apr.  18,  2001. 
 722  XO  Communications  Reports  Strong  Fourth  Quarter  Results,  News  Release,  XO,  Feb.  5,  2001;  XO 
 Communications,  Inc.,  SEC  Form  10-  K,  Apr.  2,  2001,  at  2. 
 723  XO  Communications  $45O  Mln  Notes  Rated  CCC+  By  S&  P,  CAPITAL  MARKETS  REPORT,  Jan.  9,  2001. 


 XO  operates  35  metropolitan  fiber  networks  in  21  states  and  the  District  of  Columbia.  XO  Communications,  Inc., 
 SEC  Form  10-  K,  Apr.  2,  2001,  at  2. 


 724  XO  Communications,  Inc.,  SEC  Form  10-  K,  Apr.  2,  2001,  at  11. 


 725  XO  Communications  Reports  Strong  Fourth  Quarter  Results,  News  Release,  XO,  Feb.  5,  2001. 
 726  Nextlink  and  Concentric  Close  $2.54  Billion  Equity  Value  Merger  Creating  Broadband  Communications 
 Powerhouse,  BUSINESS  WIRE,  June  19,  2000. 
 727  Id. 


 728  Id. 
 729  See  Fifth  Report,  at  17799. 
 730  Gerry  Blackwell,  Bringing  State-  of-  the-  Art  Broadband  Services  to  Big  Sky  Country,  B  BROADBAND 
 WIRELESS  BUSINESS,  June/  July  2000,  at  14.  See  Table  A-  2,  p.  A-  21. 
 731  Gerry  Blackwell,  Bringing  State-  of-  the-  Art  Broadband  Services  to  Big  Sky  Country,  BROADBAND 
 WIRELESS  BUSINESS,  June/  July  2000,  at  14. 
100
 Federal  Communications  Commission  FCC  01-  192 
 A-  18 
 Touch  America  is  the  wholly  owned  telecommunications  subsidiary  of  the  Montana  Power  Company, 
 which,  in  March  2000,  decided  to  divest  its  energy  businesses  to  focus  exclusively  on  telecommunications.  732  Montana  Power  expects  to  complete  the  divestiture  by  the  second  quarter  of  2001, 


 at  which  time  Touch  America  will  become  the  name  of  the  parent  corporation.  733  In  June  2000,  Touch 
 America  completed  the  acquisition  of  Qwest  Communication  Internationals  long-  distance  business,  which 
 included  250,000  customers  throughout  the  14-  state  territory  of  the  former  US  WEST.  734 


 HighSpeed  Communications.  HighSpeed  Communications  (  HighSpeed,  formerly  HighSpeed.  Com) 
 holds  LMDS  licenses  covering  nearly  14  million  POPs  throughout  Washington,  Oregon,  Idaho,  Hawaii, 
 Colorado  and  Nevada,  as  well  as  a  large  part  of  the  Central  Valley  of  California.  735  HighSpeed  has  begun 
 offering  service  using  its  LMDS  licenses  in  Walla  Walla,  WA;  Bend,  OR;  Bakersfield,  CA  and  Boise,  ID.  736  The  company  targets  small  and  medium-  sized  business  customers  in  tier  1  and  tier  2  markets  in  the 


 western  United  States  and  offers  only  data,  not  voice,  services  at  speeds  ranging  from  1.54  to  155  Mbps.  737 
 In  two  of  its  markets,  HighSpeed  has  deployed  service  by  purchasing  or  partnering  with  a  local  ISP.  738  In 
 1999,  XO  (then  Nextlink)  acquired  a  15  percent  equity  position  in  HighSpeed.  739 


 e-  xpedient/  CAVU  Inc.  (  e-  xpedient).  E-  xpedient  holds  39  GHz  licenses  and  offers  fixed  wireless 
 broadband  services  to  businesses  in  multi-  tenant  buildings  in  six  cities:  Salt  Lake  City,  UT;  Cleveland, 
 OH;  Oklahoma  City,  OK;  Jacksonville,  FL;  Orlando,  FL;  and  Miami,  FL.  740  In  Miami,  e-  pedient  also  uses 
 60  GHz  spectrum  and  free-  space  optics  technology.  741  E-  xpedient  has  set  up  its  network  in  a  ring 


 732  Montana  Power  to  Divest  Energy  Businesses,  Company  to  Become  Touch  America,  News  Release,  Touch 
 America,  Mar.  28,  2000. 
 733  Earnings  up  as  Montana  Power  Becomes  Touch  America,  ASSOCIATED  PRESS  NEWSWIRES,  Jan.  30,  2001; 


 Montana  Power  Reports  2000  Annual  and  Fourth-  Quarter  Earnings,  News  Release,  Montana  Power  Company, 
 Jan.  30,  2001. 


 734  Earnings  up  as  Montana  Power  Becomes  Touch  America,  ASSOCIATED  PRESS  NEWSWIRES,  Jan.  30,  2001; 


 Touch  America  Completes  Acquisition  of  Qwest  Communications'  14-  State  Long  Distance  Business,  News  Release, 
 Touch  America,  June  30,  2000.  See  Fifth  Report,  at  17799. 


 735  HighSpeed.  Com  Completes  Acquisition  of  LMDS  Licenses  in  Nevada,  News  Release,  Highspeed,  Oct.  27, 


 2000. 
 736  Timothy  Downs,  Speed  to  Market  the  Calling  Card  of  LMDS  Licensee  HighSpeed.  Com,  BROADBAND 
 WIRELESS  BUSINESS,  June/  July  2000,  at  13,  32. 
 737  Id. 


 738  Id. 
 739  Id. 
 740  Charles  F.  Mason,  Can  a  Broadband  Wireless  Carrier  Provide  Both  Quality  Service  and  Profits?, 
 BROADBAND  WIRELESS  BUSINESS,  Jan.  2001,  at  1,  16;  e-  xpedient,  Markets  (visited  Apr.  23,  2001)  <http://  www.  e-xpedient. 
 com/  customer/  markets.  html>. 


 741  e-  xpedient  Launches  First  Commercial  Network  to  Use  60  GHz  and  Free-  Space  Optics  to  Deliver  100 


 Mbps  Internet  Access  to  Businesses  in  Miami,  News  Release,  e-  xpedient,  Apr.  17,  2001. 
101
 Federal  Communications  Commission  FCC  01-  192 
 A-  19 
 configuration  by  linking  10  to  20  buildings  in  a  ring  with  fixed  wireless  connections  and  creating  a  100 
 Mbps  IP-  based  path  in  each  direction.  The  company  offers  100  Mbps  Internet  access  starting  at  $100  per 
 month  to  all  of  the  customers  located  in  its  networked  buildings.  742 


 742  Steve  Stroh,  Going  Wireless  with  Invisible  Fiber,  BOARDWATCH,  Feb.  2001. 
102
 Federal  Communications  Commission  FCC  01-  192 
 A-  20 
 Table  1:  Fixed  Wireless  Internet  Access  Offerings  with  MDS/  ITFS  Spectrum 
 Company  Location  Reported  Speed 
 Advanced  Wireless  Systems,  Inc.  Reading,  PA 
 Clarksville,  TN 
 Shreveport,  LA 
 Mobile,  AL 
 Baton  Rouge,  LA 


 N/  A 


 Alaska  Wireless  Cable  Fairbanks,  AK  N/  A 
 American  Rural  TV  La  Junta,  CO  N/  A 
 Bay  Junction  Technology/  iSpeed  Santa  Clara,  CA  1.  5  Mbps 
 Cache  Valley  AIRNET  Cache  Valley,  UT  5  Mbps 
 CFW  Communications  (formerly  R&  B 
 Telephone) 
 Daleville,  VA  10  Mbps 


 Digital  Broadcast  Corp.  Roanoke,  VA  N/  A 
 HiWAAY  Information  Services  Huntsville,  AL  256  kbps 
 IJNT.  net,  Inc.  Salt  Lake  City,  UT 
 Beaumont,  TX 
 10  Mbps 


 LMA  Systems  Sunbury,  PA 
 Wilkes-  Barre,  PA 
 768  kbps-  1.54  Mbps 


 NextNet  (equipment  trials)  Olympia,  WA 
 Waseca,  MN 
 N/  A 


 Nucentrix  Broadband  Networks,  Inc.  Austin,  TX 
 Sherman,  TX 
 Amarillo,  TX  (trial) 


 1.54  Mbps 


 Ohio  Valley  Wireless  -  Cable  Evansville,  IN  1.  5  Mbps 
 Oxford  Telecom  Portland,  ME  N/  A 
 QuadraVision  Reno/  Sparks,  NV 
 Carson  City,  NV 
 1.5  Mbps 


 Rocky  Mountain  Internet  Denver,  CO  750  kbps 
 Sioux  Valley  Wireless  Sioux  Falls,  SD  4  Mbps 
 SkyLynx  Communications  Fresno,  CA 
 Sarasota,  FL 
 11  Mbps 


 SoFast  Internet  Services  Great  Falls,  MT  128  kbps-  1.5  Mbps 
 Sprint  16  markets  nationwide  512  kbps  -  1  Mbps 
 Telecom  Wireless  Corp./  TCOM  Ventures  Key  West,  FL  N/  A 
 Third  Rail  Communications  Nashua,  NH  N/  A 
 Universal  Rapid  Access  Logan,  UT  N/  A 
 U.  S.  Interactive  dba  AccelerNet  Houston,  TX  10  Mbps 
 Virginia  Communications/  eSpeed  Prescott  Valley,  AZ  768  kbps 
 WatchTV  Lima,  OH  N/  A 
 Wireless  First  Traverse  City,  MI  256  kbps 
 World  Wide  Wireless  Communications  Concord,  CA  9  Mbps 
 Baton  Rouge,  LA 
 Jackson,  MI 
 Memphis,  TN 


 310  kbps  (residential) 
 8  Mbps  (business) 
 WorldCom 


 Dallas-  Ft.  Worth,  TX  (trial) 
 Boston,  MA  (trial) 
 310  kbps  (residential) 
 8  Mbps  (business) 


 Source:  Information  is  based  on  publicly  available  documents  such  as  news  releases,  newspaper  and  periodical 
 articles,  company  web  pages,  and  SEC  filings  through  April  2001. 
103
 Federal  Communications  Commission  FCC  01-  192 
 A-  21 
 Table  2:  LMDS  Launches 
 Company  Location  Status 
 XO  Communications  27  markets  nationwide  Launched  commercial  service  after 
 field  tests 
 Winstar  Holds  9  LMDS  A-  block  licenses, 
 including  the  San  Francisco-Oakland 
 BTA 


 Uses  LMDS  licenses  in  conjunction 
 with  39  GHz  licenses  to  offer 
 package  of  WLL  services  to 
 businesses;  declared  bankruptcy  in 
 April  2001 
 South  Central  Telecom  Medicine  Lodge,  KS  Offers  telemedicine,  distance 
 learning,  and  leased  line  services 
 Virginia  Tech  University  Blacksburg,  VA  Uses  4  LMDS  licenses  to  provide 
 two-  way  high-  speed  data,  voice,  and 
 video  from  an  on-  campus  to  three  off-campus 
 office  buildings 
 Touch  America  Billings  and  Butte,  MT  Full  voice  and  data  service  to 
 business  and  government 
 SpeedUS.  com  (formerly 
 CellularVision) 
 New  York  metro  Facilities-  based  high-  speed  Internet 
 service 
 Central  Texas  Communications  San  Angelo  and  Goldthwaite,  TX  Offers  voice  and  high-  speed  Internet 
 access  to  businesses  at  128  kbps  to 
 10  Mbps 
 PVT  Networks  (subsidiary  of 
 Penasco  Valley  Telephone) 
 Artesia,  NM  Testing  LMDS 


 US  Unwired  Lake  Charles,  LA  Voice  and  data  trials 
 Liberty  Cellular  (acquired  by 
 Alltel) 
 Salina,  KS  Service  trial  started  in  mid-  1999 


 Home  Telephone,  Inc.  Charleston,  SC  Trials 
 HighSpeed  Communications  Walla  Walla,  WA 
 Bend,  OR 
 Boise,  ID 
 Bakersfield,  CA 


 data  services  to  small  and  medium- 
 sized  businesses  at  speeds  ranging 
 from  1.54  to  155  Mbps 


 Prime  Companies,  Inc.  8  LMDS  licenses  cover  one  million 
 people  and  35,000  businesses  in 
 western  Pennsylvania  and  southern 
 New  York 


 Offers  broadband  service  to 
 businesses  in  New  Castle  and  Oil 
 City,  PA;  also  uses  unlicensed 
 spectrum  to  serve  residential 
 customers 
 Frazier/  King  Media  Irving,  TX  LMDS  demonstration  to  deliver 
 voice,  data,  and  video  services  to 
 residences  and  businesses 


 Source:  Rulemaking  to  Amend  Parts  1,  2,  21,  and  25  of  the  Commissions  Rules  to  Redesignate  the  27.5-  29.5  GHz 
 Frequency  Band,  to  Reallocate  the  29.5-  30.0  GHz  Frequency  Band,  to  Establish  Rules  and  Policies  for  Local 
 Multipoint  Distribution  Service  and  for  Fixed  Satellite  Services,  Third  Report  and  Order  and  Memorandum  Opinion 
 and  Order,  FCC  00-  223,  Appendix  B,  released  June  27,  2000;  Information  is  also  based  on  publicly  available 
 documents  through  April  2001  such  as  news  releases,  newspaper  and  periodical  articles,  company  web  pages,  and 
 SEC  filings. 
104
 Federal  Communications  Commission  FCC  01-  192 
 B-  1 
 APPENDIX  B:  SPECTRUM  AUCTIONS 
 Table  of  Contents 
 Table  1A:  FCC  Auctions  Summary  -  Service  Design  ........................................................................................  B-  2 
 Table  1B:  FCC  Auctions  Summary  -  Auction  Results  .......................................................................................  B-  4 
 Table  2:  700  MHz  Guard  Band  Auction  #33  Results  ..........................................................................................  B-  5 
 Table  3:  SMR  800  MHz  General  Category  Auction  #34  Results  ........................................................................  B-  5 
 Table  4:  PCS  C  &  F  Block  Auction  #35  Results  .................................................................................................  B-  6 
 Table  5:  SMR  800  MHz  Lower  80  Channels  Auction  #36  Results  .....................................................................  B-  7 
 Table  6:  700  MHz  Guard  Band  Auction  #38  Results  .........................................................................................  B-  7 
105
 Federal  Communications  Commission  FCC  01-  192 
 B-  2 
 Table  1A:  FCC  Auctions  Summary  -  Service  Design 
 Auction  Number  and  Name  Number  of 
 Licenses  (1) 
 Geographic 
 License 
 Scheme  (2) 


 Spectrum  per  license  Total  Spectrum 
 per  Market 
 Service 
 Description 


 1  Nationwide  Narrowband 
 PCS 
 11  (3)  Nationwide  11  blocks:  5  =  50/  50  kHz,  3  = 
 50/  12.5  kHz,  2  =  50  kHz 
 0.7875  MHz  Advanced 
 paging/  data 


 2  Interactive  Video  and  Data 
 Service 
 594  MSA  2  blocks  of  500  kHz  1  MHz  Interactive  data 


 3  Regional  Narrowband  PCS  30  Regional  6  blocks:  2  =  50/  50  kHz,  4  = 
 50/  12.5  kHz 
 0.45  MHz  Advanced 
 paging/  data 


 4  A  &  B  block  Broadband 
 PCS 
 102  (4)  MTA  2  blocks  of  30  MHz  60  MHz  Mobile  voice  and 
 data 


 5/  10 
 /22 
 C  block  Broadband  PCS 
 (5) 
 493  BTA  1  block  of  30  MHz  or  2  blocks 
 of  15  MHz 
 30  MHz  Mobile  voice  and 
 data 


 6  Multichannel  Distribution 
 Service 
 493  BTA  Max  of  13  channels  of  6  MHz  78  MHz  (6)  Wireless  cable 


 7  900  MHz  Specialized 
 Mobile  Radio 
 1020  MTA  20  blocks  of  .25  MHz  5  MHz  Mobile  voice  and 
 data 


 8  Digital  Broadcast  Service 
 (7) 
 1  Full  US 
 Coverage 
 500  MHz  437.5  MHz  Multichannel 
 video 


 9  Digital  Broadcast  Service 
 (7) 
 1  Partial  US 
 Coverage 
 Uses  same  spectrum  as  full 
 coverage  license 
 375  MHz  Multichannel 
 video 


 11/ 
 22 
 D,  E,  &  F  block  Broadband 
 PCS  (8) 
 1479  BTA  3  blocks  of  10  MHz  30  MHz  Mobile  voice  and 
 data 


 12  Cellular  Unserved  14  MSA/  RSA  2  blocks  of  25  MHz  50  MHz  Mobile  voice  and 
 data 


 13  Interactive  Video  and  Data 
 Service 
 981  MSA/  RSA  2  blocks  of  500  kHz  1  MHz  Interactive  data 


 14  Wireless  Communications 
 Service 
 128  MEA/  REAG  4  blocks:  2  =  10  MHz,  2  =  5 
 MHz 
 30  MHz  (9) 


 15  Digital  Audio  Radio 
 Service 
 2  Full  US 
 Coverage 
 2  blocks  of  12.  5  MHz  25  MHz  Multichannel 
 audio 


 16  Upper  800  MHz 
 Specialized  Mobile  Radio 
 525  EA  3  blocks:  1  MHz,  3  MHz  ,  and 
 6  MHz 
 10  MHz  Mobile  voice  and 
 data 


 17/ 
 23 
 Local  Multipoint 
 Distribution  Service 
 986  (10)  BTA  2  blocks:  1150  MHz  and  150 
 MHz 
 1300  MHz  Fixed  voice,  data 
 and  video 


 18/ 
 24 
 220  MHz  908  National, 
 EAG,  EA 
 13  blocks:  3  =  100  kHz,  5  = 
 100  kHz,  5  =  150  kHz 
 1.55  MHz  Voice,  data, 
 paging,  fixed 


 20  VHF  Public  Coast  42  Pub.  Coast 
 Station  Areas 
 1  block  between  350  and  500 
 kHz 
 350  to  500  kHz  Fixed  and  mobile 


 21  Location  and  Monitoring 
 Service 
 528  EA  3  blocks:  2  =  6  MHz,  1  =  2.25 
 MHz 
 14.  25  MHz  Mobile  telemetry 


 25/ 
 27/ 
 28 


 "Closed"  Broadcast  118  n/  a  (11)  (11)  Broadcast  TV 
 and  radio 


 26  929  and  931  MHz  Paging 
 Service 
 2,499  MEA  49  blocks  of  20  kHz:  12  in  929 
 Band,  37  in  931  band. 
 790  kHz  Paging  and 
 messaging 


 30  39  GHz  2,450  EA  14  Blocks  of  100  MHz  1400  MHz  Fixed  (12) 


 33/ 
 38 
 700  MHz  Guard  Band  104  MEA  2  Blocks:  1=  4  MHz,  1  =  2 
 MHz 
 6  MHz  (13) 


 34  SMR  800  MHz  General 
 Category 
 1,050  EA  6  Blocks  of  1.25  MHz  (14)  7.5  MHz  Mobile  voice  and 
 data 
 35  PCS  C  &  F  Block  (5)  422  (15)  BTA  Up  to  4  blocks  of  10  MHz;  Up 
 to  2  blocks  of  15  MHz 
 10  to  40  MHz  Mobile  voice  and 
 data 
 36  SMR  800  MHz  Lower  80 
 Channels 
 2,800  EA  16  Blocks  of  .25  MHz  4  MHz  Mobile  voice  and 
 data 


 Source:  Federal  Communications  Commission 
106
 Federal  Communications  Commission  FCC  01-  192 
 B-  3 
 (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. 
107
 Federal  Communications  Commission  FCC  01-  192 
 B-  4 
 Table  1B:  FCC  Auctions  Summary  Auction  Results 
 Auction  Number(  s)  and  Name  Total  Winning  Bids 
 (1) 
 Auction 
 Began 
 Auction 
 Ended 
 # 
 Rounds 
 Number  of 
 Winning 
 Bidders 
 1  Nationwide  Narrowband  PCS  $650,306,674  7/  25/  94  7/  29/  94  47  6 
 2  Interactive  Video  and  Data  Service  $213,892,375  7/  28/  94  7/  29/  94  Oral 
 Outcry 
 178 


 3  Regional  Narrowband  PCS  $392,706,797  10/  26/  94  11/  8/  94  105  9 
 4  A  &  B  block  Broadband  PCS  $7,721,184,171  12/  5/  94  3/  13/  95  112  18 
 5/ 
 10/ 
 22 


 C  block  Broadband  PCS  (2)  $10,071,708,841.50 
 $904,607,466.75 
 $409,936,425.00 


 12/  18/  95 
 7/  3/  96 
 3/  23/  99 


 5/  6/  96 
 7/  16/  96 
 4/  15/  99 


 184 
 25 
 78 


 89 
 7 
 57 
 6  Multichannel  Distribution  Service  $216,239,603  11/  13/  95  3/  28/  96  181  67 
 7  900  MHz  Specialized  Mobile  Radio  $204,267,144  12/  5/  95  4/  15/  96  168  80 
 8  Digital  Broadcast  Service  $682,500,000  1/  24/  96  1/  25/  96  19  1 
 9  Digital  Broadcast  Service  $52,295,000  1/  25/  96  1/  26/  96  25  1 
 11/ 
 22 
 D,  E,  &  F  block  Broadband  PCS  (3)  $2,517,439,565 
 $2,904,520 
 8/  26/  96 
 3/  23/  99 
 1/  14/  97 
 4/  15/  99 
 276 
 78 
 125 
 6 
 12  Cellular  Unserved  $1,842,533  1/  13/  97  1/  21/  97  36  10 
 14  Wireless  Communications  Service  $13,638,940  4/  15/  97  4/  25/  97  29  17 
 15  Digital  Audio  Radio  Service  $173,234,888  4/  1/  97  4/  2/  97  25  2 
 16  Upper  800  MHz  Specialized  Mobile 
 Radio 
 $96,232,060  10/  28/  97  12/  8/  98  235  14 


 17/ 
 23 
 Local  Multipoint  Distribution 
 Service 
 $578,663,029 
 $45,064,450 
 2/  18/  98 
 4/  27/  99 
 3/  25/  98 
 5/  12/  99 
 127 
 43 
 104 
 40 
 18/ 
 24 
 220  MHz  $21,650,301 
 $1,924,950 
 9/  15/  98 
 6/  8/  99 
 10/  22/  98 
 6/  30/  99 
 173 
 71 
 44 
 16 
 20  VHF  Public  Coast  $7,459,200  12/  3/  98  12/  14/  98  44  4 
 21  Location  and  Monitoring  Service  $3,438,294  2/  23/  99  3/  5/  99  54  4 
 25/ 
 27/ 
 28 


 Closed  Broadcast  Auction  $57,820,350 
 $172,250 
 $1,210,000 


 9/  28/  99 
 10/  6/  99 
 3/  21/  00 


 10/  8/  99 
 10/  8/  99 
 3/  24/  00 


 35 
 15 
 26 


 91 
 1 
 2 


 26  929  and  931  MHz  Paging  Service  $4,122,500  2/  24/  00  3/  2/  00  28  78 
 30  39  GHz  $410,649,085  4/  12/  00  5/  8/  00  73  29 
 33/ 
 38 
 700  MHz  Guard  Band  $519,892,575 
 $20,961,500 
 9/  6/  00 
 2/  13/  01 
 9/  21/  00 
 2/  21/  01 
 66 
 38 
 9 
 3 
 34  SMR  800  MHz  General  Category  $319,451,810  8/  16/  00  9/  1/  00  76  14 
 35  PCS  C  &  F  Block  $16,857,046,150  12/  12/  00  1/  26/  01  101  35 
 36  SMR  800  MHz  Lower  80  Channels  $28,978,385  11/  1/  00  12/  5/  00  151  22 


 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. 
108
 Federal  Communications  Commission  FCC  01-  192 
 B-  5 
 Table  2:  700  MHz  Guard  Band  Auction  #33  Results 
 Bidder  Name  Total  High  Bids  POPs  Net  High  Bids  (1) 
 Nextel  Spectrum  Acquisition  Corp.  37  226,892,282  $337,862,000 
 Pegasus  Guard  Band,  LLC  31  147,056,258  $91,498,300 
 Access  Spectrum,  LLC  19  93,171,133  $69,065,775 
 PTPMS  II  Communications,  L.  L.  C.  3  6,  377,407  $6,279,000 
 Black  Rock  Partners,  LP  2  5,  787,033  $2,547,750 
 Dominion  700,  Inc.  1  7,  745,433  $6,320,000 
 Motorola  Spectrum,  Inc.  1  4,  310,367  $6,235,000 
 Harbor  Wireless  LLC  1  550,043  $42,750 
 Radiofone  Nationwide  PCS,  L.  L.  C.  1  0  $42,000 
 Source:  Federal  Communications  Commission 
 Notes:  (1)  As  of  the  close  of  the  auction. 


 Table  3:  SMR  800  MHz  General  Category  Auction  #34  Results 
 Bidder  Name  Total  High  Bids  POPs  Net  High  Bids  (1) 
 Nextel  Spectrum  Acquisition  Corp.  800  1,260,351,563  $231,567,200 


 Southern  Communications  Services,  Inc  89  90,834,191  $50,855,000 
 Preferred  Acquisitions  Inc  38  81,157,644  $31,670,600 
 Nevada  Wireless  LLC  37  17,066,215  $774,020 
 Motient  Communications  Company  33  28,406,946  $3,361,300 
 Silver  Palm  Communications,  Inc.  10  6,373,807  $393,000 
 A.  R.  C.,  Inc.  6  5,  051,115  $487,500 
 Communications  Equipment,  Inc.  6  3,  370,315  $56,420 
 Western  Communications,  Inc.  3  640,391  $75,985 
 Choice  Phone  LLC  2  352,994  $106,600 
 Mobile  Relay  Associates  2  2,  315,083  $26,250 
 Winsome  Paging  Inc.  2  1,  101,512  $7,800 
 Communication  Specialists  Inc.  1  176,497  $64,350 
 Linda  Sue  and  Herschel  Bruce  Williamson  1  285,955  $5,785 
 Source:  Federal  Communications  Commission 
 Notes:  (1)  As  of  the  close  of  the  auction. 
109
 Federal  Communications  Commission  FCC  01-  192 
 B-  6 
 Table  4:  PCS  C  &  F  Block  Auction  #35  Results 
 Bidder  Name  Total  High  Bids  POPs  Net  High  Bids  (1) 
 Cellco  Partnership,  d/  b/  a  Verizon  Wireless  113  150,682,267  $8,781,393,000 
 Alaska  Native  Wireless,  L.  L.  C.  44  64,718,725  $2,893,144,250 
 Salmon  PCS,  LLC  79  71,921,921  $2,348,774,750 
 DCC  PCS,  Inc.  14  17,709,151  $546,074,000 
 Cook  Inlet/  VS  GSM  V  PCS,  LLC  22  17,685,514  $506,376,000 
 VoiceStream  PCS  BTA  I  License  Corporation  19  11,304,761  $482,653,000 
 Leap  Wireless  International,  Inc.  22  20,025,113  $350,060,750 
 Black  Crow  Wireless,  LP  17  10,185,736  $283,885,000 
 SVC  BidCo,  LP  5  8,  339,270  $281,944,000 
 Lafayette  Communications  Company  L.  L.  C.  14  6,141,572  $170,340,150 
 NORTHCOAST  COMMUNICATIONS,  L.  L.  C.  11  6,292,576  $112,705,000 
 Summit  Wireless,  LLC  13  1,962,700  $34,992,250 
 3DL  Wireless,  LLC  3  1,  701,084  $15,597,000 
 TPS  Utilicom,  Inc.  4  1,  097,971  $13,817,000 
 MCG  PCS  II,  Inc.  3  1,  310,634  $7,378,000 
 Unbound  PCS,  LLC  1  816,101  $6,952,000 
 Theta  Communications,  LLC  1  260,538  $4,017,000 
 NTCH,  Inc.  7  1,  104,500  $2,591,250 
 LastWave  Partners  1  424,766  $1,864,000 
 SLO  Cellular,  Inc.  1  247,523  $1,563,000 
 VINCENT  D.  McBRIDE  1  504,859  $1,534,000 
 Purchase  Communications  2  434,164  $1,522,000 
 3G  PCS,  LLC  3  364,024  $1,270,000 
 Mint  GSM  Services  Inc.  2  325,532  $1,053,500 
 Scott  Reiter  4  362,871  $971,250 
 Commnet  PCS,  Inc.  2  246,369  $899,250 
 DEVTEL,  LLC  2  332,618  $768,000 
 Polycell  Communications,  Inc.  2  332,618  $730,500 
 Poplar  PCS-  Central,  LLC  2  282,260  $600,750 
 Global  Telecommunications,  Inc.  2  176,000  $369,750 
 Coloma  Spectrum,  LLC  2  173,872  $338,250 
 ALPINE  PCS,  INC.  1  118,558  $323,000 
 T.  K.  O.  Communications,  LLC  1  52,677  $281,250 
 PCS  Partners,  L.  P.  1  123,121  $144,750 
 Citifone  PCS,  LLC  1  67,  165  $118,500 
 Source:  Federal  Communications  Commission 
 Notes:  (1)  As  of  the  close  of  the  auction. 
110
 Federal  Communications  Commission  FCC  01-  192 
 B-  7 
 Table  5:  SMR  800  MHz  Lower  80  Channels  Auction  #36  Results 
 Bidder  Name  Total  High  Bids  POPs  Net  High  Bids  (1) 
 Nextel  Spectrum  Acquisition  Corp.  2579  3,794,345,853  $27,149,100 
 Southern  Communications  Services,  Inc  90  75,489,735  $817,500 
 Nevada  Wireless  29  32,479,461  $95,485 
 A.  R.  C.,  Inc.  21  20,965,725  $303,745 
 Silver  Palm  Communications,  Inc.  14  10,817,023  $53,625 
 NextMobile  Inc.  13  59,724,080  $130,845 
 Skitronics,  Inc.  8  6,  591,930  $90,610 
 L.  P.  Ganacias  Enterprises,  Inc.  8  1,  411,976  $5,395 
 Scott  C.  MacIntyre  7  16,772,902  $223,860 
 Western  Communications,  Inc.  6  1,  822,969  $4,745 
 TOTAL  COM  INC.  4  4,  594,811  $24,505 
 GALESBURG  COMMUNICATIONS,  INC.  4  2,  143,952  $2,665 
 SR  Communications  Associates  DBA  COMMUNICATIONS  AS  3  1,  658,569  $1,950 
 Reisenweaver  Communications,  Inc.  2  3,  208,646  $49,500 
 Gateway  Wireless  Services,  L.  C.  2  2,  188,426  $2,470 
 Motient  Communications  Company  2  2,049,563  $4,800 
 CENTRE  COMMUNICATIONS,  INC  2  1,597,652  $1,495 
 Ragan  Communications,  Inc.  2  1,  047,438  $13,000 
 Michael  A.  Wolf  dba  W  S  Electronics  1  1,  125,936  $715 
 UNITED  COMMUNICATIONS  CO.  1  499,681  $845 
 Redi-  Call  Communications  Company  1  290,800  $780 
 Valley  Cable  &  Satellite  Communications,  Inc.  1  84,  696  $750 
 Source:  Federal  Communications  Commission 
 Notes:  (1)  As  of  the  close  of  the  auction. 


 Table  6:  700  MHz  Guard  Band  Auction  #38  Results 
 Bidder  Name  Total  High  Bids  POPs  Net  High  Bids  (1) 
 Access  Spectrum,  LLC  2  3,  947,695.00  $9,271,500 
 Nextel  Spectrum  Acquisition  Corp.  3  4,904,414.00  $7,849,000 
 Pegasus  Guard  Band,  LLC  3  4,  371,373.00  $3,841,000 
 Source:  Federal  Communications  Commission 
 Notes:  (1)  As  of  the  close  of  the  auction. 
111
 Federal  Communications  Commission  FCC  01-  192 
 C-  1 
 APPENDIX  C:  MOBILE  TELEPHONY 
 Table  of  Contents 
 Table  1:  CTIAs  Semi-  Annual  Mobile  Telephone  Industry  Survey  ...................................................................  C-  2 
 Table  2:  FCCs  Semi-  Annual  Local  Telephone  Competition  Survey  ...................................................................  C-  3 
 Table  3:  Top  25  Mobile  Telephone  Operators  by  Subscribers  ............................................................................  C-  4 
 Table  4:  Estimated  Mobile  Telephone  Rollouts  by  Number  of  Launches  by  County  ............................................  C-  5 
 Table  5:  County  Quartiles  with  Estimated  Rollout  by  at  least  3  Mobile  Telephone  Providers  ............................  C-  5 
 Table  6:  Estimated  U.  S  Digital  Mobile  Telephone  Subscribers  .........................................................................  C-  6 
 Table  7:  Mobile  Telephone  Digital  Coverage  .....................................................................................................  C-  7 
 Table  8:  Change  in  CPI  ....................................................................................................................................  C-  7 
 Table  9:  Top  20  Mobile  Telephone  Resellers  ....................................................................................................  C-  8 
 Table  10:  Foreign  Holdings  of  U.  S.  Mobile  Telephone  Operators  ......................................................................  C-  9 
112
 Federal  Communications  Commission  FCC  01-  192 
 C-  2 
 Table  1:  CTIAs  Semi-  Annual  Mobile  Telephone  Industry  Survey 
 Date  Estimated 
 Subscribers 
 Total  Six-Month 
 Service 
 Revenues 
 (000s) 


 Roamer 
 Services 
 Revenues 


 Cell  Sites  Employees  Cumulative 
 Capital 
 Investment 
 (000s) 


 Average 
 Local 
 Monthly 
 Bill 
 Jan  85  91,600  $178,085  346  1,404  $354,760 


 June  85  203,600  $176,231  599  1,697  $588,751 
 Dec  85  340,213  $306,197  913  2,727  $911,167 
 June  86  500,000  $360,585  1,194  3,556  $1,140,163 
 Dec  86  681,825  $462,467  1,531  4,334  $1,436,753 
 June  87  883,778  $479,514  1,732  5,656  $1,724,348 
 Dec  87  1,230,855  $672,005  2,305  7,147  $2,234,635  $96.83 
 June  88  1,608,697  $886,075  2,789  9,154  $2,589,589  $95.00 
 Dec  88  2,069,441  $1,073,473  $89,331  3,209  11,400  $3,274,105  $98.02 
 June  89  2,691,793  $1,406,463  $121,368  3,577  13,719  $3,675,473  $85.52 
 Dec  89  3,508,944  $1,934,132  $173,199  4,169  15,927  $4,480,141  $83.94 
 June  90  4,368,686  $2,126,362  $192,350  4,768  18,973  $5,211,765  $83.94 
 Dec  90  5,283,055  $2,422,458  $263,660  5,616  21,382  $6,281,596  $80.90 
 June  91  6,380,053  $2,653,505  $302,329  6,685  25,545  $7,429,739  $74.56 
 Dec  91  7,557,148  $3,055,017  $401,325  7,847  26,327  $8,671,544  $72.74 
 June  92  8,892,535  $3,633,285  $436,725  8,901  30,595  $9,276,139  $68.51 
 Dec  92  11,032,753  $4,189,441  $537,146  10,307  34,348  $11,262,070  $68.68 
 June  93  13,067,318  $4,819,259  $587,347  11,551  36,501  $12,775,967  $67.31 
 Dec  93  16,009,461  $6,072,906  $774,266  12,805  39,775  $13,946,406  $61.48 
 June  94  19,283,306  $6,519,030  $778,116  14,740  45,606  $16,107,920  $58.65 
 Dec  94  24,134,421  $7,710,890  $1,052,666  17,920  53,902  $18,938,677  $56.21 
 June  95  28,154,415  $8,740,352  $1,120,337  19,833  60,624  $21,709,286  $52.45 
 Dec  95  33,785,661  $10,331,614  $1,422,233  22,663  68,165  $24,080,466  $51.00 
 June  96  38,195,466  $11,194,247  $1,314,943  24,802  73,365  $26,707,046  $48.84 
 Dec  96  44,042,992  $12,440,724  $1,465,992  30,045  84,161  $32,573,522  $47.70 
 June  97  48,705,553  $13,134,551  $1,392,440  38,650  97,039  $37,454,294  $43.86 
 Dec  97  55,312,293  $14,351,082  $1,581,765  51,600  109,387  $46,057,911  $42.78 
 June  98  60,831,431  $15,286,660  $1,584,891  57,674  113,111  $50,178,812  $39.88 
 Dec  98  69,209,321  $17,846,515  $1,915,578  65,887  134,754  $60,542,774  $39.43 
 June  99  76,284,753  $19,368,304  $1,922,416  74,157  141,929  $66,782,827  $40.24 
 Dec  99  86,047,003  $20,650,185  $2,163,001  81,698  155,817  $71,264,865  $41.24 
 June  00  97,035,925  $24,645,365  $1,971,625  95,733  159,645  $76,652,358  $45.15 
 Dec  00  109,478,031  $27,820,655  $1,911,356  104,288  184,449  $89,624,387  $45.27 


 Source:  Cellular  Telecommunications  and  Internet  Association,  Semi-  Annual  Mobile  Telephone  Industry  Survey  <.  http://  www.  wow-com. 
 com/  wirelesssurvey/>. 
113
 Federal  Communications  Commission  FCC  01-  192 
 C-  3 
 Table  2:  FCCs  Semi-  Annual  Local  Telephone  Competition  Survey 
 Mobile  Wireless  Telephone  Subscribers  (as  of  Dec.  31,  2000) 
 State  Dec  2000 
 Reporting 
 Carriers  1/ 


 Dec  2000 
 Percent 
 Resold  2/ 


 Subscribers 
 Dec  1999 
 Subscribers 
 June  2000 
 Subscribers 
 Dec  2000 
 Percent  Change 
 Dec  99    Dec  00 


 Alabama  9  1%  1,080,410  1,253,084  1,386,294  28% 
 Alaska  *  *  165,221  169,892  *  * 
 Arizona  11  7  1,  125,321  1,624,668  1,829,695  63 
 Arkansas  5  2  719,919  715,467  743,928  3 
 California  10  5  8,544,941  12,283,369  12,649,508  48 
 Colorado  8  4  1,552,718  1,654,989  1,856,075  20 
 Connecticut  6  7  1,077,089  1,136,618  1,277,123  19 
 Delaware  6  0  270,848  275,219  371,014  37 
 DistrictofColumbia  6  10  910,116  333,815  928,962  2 
 Florida  9  6  5,  158,079  4,983,478  6,369,985  23 
 Georgia  11  6  2,538,983  2,687,238  2,739,000  8 
 Hawaii  7  0  288,425  454,364  524,291  82 
 Idaho  4  23  271,436  296,066  344,564  27 
 Illinois  10  10  3,  922,482  4,309,660  5,143,767  31 
 Indiana  10  6  1,318,975  1,717,378  1,715,074  30 
 Iowa  7  62  774,773  975,629  832,106  7 
 Kansas  10  4  669,472  724,024  801,293  20 
 Kentucky  9  2  911,700  999,544  942,545  3 
 Louisiana  11  4  1,227,106  1,294,693  1,306,457  6 
 Maine  5  32  187,003  283,640  359,786  92 
 Maryland  7  6  1,473,494  2,013,058  1,894,251  29 
 Massachusetts  6  4  1,892,014  2,228,169  2,649,130  40 
 Michigan  11  9  3,  512,813  3,423,535  3,488,826  -1 
 Minnesota  12  2  1,  550,411  1,595,560  1,740,654  12 
 Mississippi  7  0  673,355  509,038  786,577  17 
 Missouri  8  8  1,  855,452  1,848,775  1,767,411  -5 
 Montana  *  12  *  *  *  * 
 Nebraska  5  1  576,296  600,885  659,380  14 
 Nevada  6  3  750,335  825,163  684,752  -9 
 NewHampshire  8  35  280,508  309,263  387,264  38 
 NewJersey  6  2  2,  289,181  2,750,024  3,575,130  56 
 NewMexico  5  41  363,827  395,111  443,343  22 
 NewYork  6  11  4,833,816  5,016,524  5,736,660  19 
 NorthCarolina  11  13  2,  536,068  2,730,178  3,105,811  22 
 NorthDakota  *  2  *  *  *  * 
 Ohio  11  6  3,  237,786  3,278,960  3,987,192  23 
 Oklahoma  13  10  826,637  979,513  2,271,755  175 
 Oregon  8  11  914,848  1,082,425  1,201,207  31 
 Pennsylvania  10  6  2,767,474  3,850,372  4,014,894  45 
 PuertoRico  4  27  *  1,090,005  926,448  * 
 RhodeIsland  6  39  279,304  313,550  355,889  27 
 SouthCarolina  9  7  1,  137,232  1,236,338  1,392,586  22 
 SouthDakota  *  3  *  *  *  * 
 Tennessee  10  11  1,  529,054  1,876,444  1,962,568  28 
 Texas  19  8  5,792,453  6,705,423  7,489,180  29 
 Utah  8  5  643,824  692,006  750,244  17 
 Vermont  *  13  *  *  *  * 
 VirginIslands  0  NA  *  0  0  NA 
 Virginia  12  8  1,  860,262  2,447,687  2,450,289  32 
 Washington  9  8  1,873,475  2,144,767  2,286,082  22 
 WestVirginia  6  25  241,265  347,916  355,989  48 
 Wisconsin  10  45  1,525,818  1,342,908  1,595,728  5 
 Wyoming  4  1  127,634  *  *  * 


 Nationwide  77  9%  79,696,083  90,643,058  101,212,054  27% 


 *  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  wireless  lines  resold  to  other  wireless  carriers. 
 Source:  Local  Telephone  Competition:  Status  as  of  December  31,  2000,  Federal  Communications  Commission,  May  2001  (Table  9:  Mobile 
 Wireless  Telephone  Subscribers). 
114
 Federal  Communications  Commission  FCC  01-  192 
 C-  4 
 Table  3:  Top  25  Mobile  Telephone  Operators  by  Subscribers  (in  thousands) 
 Year-  End  1999  Pro  Forma  Year-  End  1999  Year-  End  2000 
 Operator  Total  Operator  Total  Operator  Total 
 1  SBC  11,151  Verizon  Wireless  (3)  25,790  Verizon  Wireless  27,505 
 2  AT&  T  Wireless  9,600  SBC-  BellSouth  16,488  Cingular  19,681 
 3  Vodafone-  AirT  9,133  AT&  T  Wireless  9,987  AT&  T  15,163 
 4  Bell  Atlantic  7,688  Sprint  PCS  5,  727  Sprint  PCS  9,  543 
 5  GTE  7,146  ALLTEL  5,019  Nextel  6,678 
 6  Sprint  PCS  5,  727  Nextel  4,516  ALLTEL  6,300 
 7  BellSouth  5,  337  US  Cellular  2,  602  VoiceStream  3,  879 
 8  ALLTEL  5,019  VoiceStream  2,204  US  Cellular  3,  061 
 9  Nextel  4,  516  Western  Wireless  835  Western  Wireless  1,050 
 10  US  Cellular  2,  602  CenturyTel  707  Powertel  908 
 11  PrimeCo  1,  400  Dobson  Comm.  660  Qwest  805 
 12  Omnipoint  935  Powertel  546  CenturyTel  751 
 13  VoiceStream  846  Centennial  503  TeleCorp  666 
 14  Western  Wirlss  835  US  West  466  Dobson  Comm.  654 
 15  CenturyTel  707  Rural  Cellular  466  Rural  Cellular  552 
 16  Powertel  546  Price  Comm.  454  Price  Comm  528 
 17  Centennial  503  PR  Tel.  Co.  (1)  254  Centennial  665 
 18  US  West  466  Triton  PCS  195  Triton  PCS  446 
 19  Dobson  Comm.  445  Cincinnati  Bell  162  Cincinnati  Bell  339 
 20  American  431  Midwest  Wireless  150  PR  Tel.  Co.  335 
 21  Price  Comm.  454  TeleCorp  142  Nextel  Partners  227 
 22  Aerial  423  Cellcom  (NE  Comm.  of  WI.)  130  Midwest 
 Wireless 
 208 


 23  CommNet  423  US  Unwired  93  Cellcom  190 
 24  PR  Tel.  Co.  (1)  254  Bluegrass  Cellular  75  Leap  Wireless  190 
 25  Rural  Cellular  242  PCS  One  (2)  50  Ntelos  168 


 Sources:  For  1999,  see  Fifth  Report,  at  17749.  For  2000,  except  for  Cellcom  and  Midwest  Wireless,  publicly  available  company  documents  such  as 
 operators  news  releases  and  filings  made  with  the  Securities  and  Exchange  Commission.  For  2000,  Cellcom  and  Midwest  Wireless  results  are  from 
 Cellular  Carriers,  RCR  WIRELESS,  Mar.  5,  2001. 


 Notes: 
 (1)  Puerto  Rico  Telephone  Co.  Inc.  s  subscribers  are  as  of  June  30,  1999. 
 (2)  PCS  One  is  a  joint  venture  between  a  subsidiary  of  VoiceStream  and  D&  E  Communications,  Inc. 
 (3)  In  Verizons  2000  10-  K,  the  company  reported  1999  Pro  Forma  subscribers  as  23,791,000. 
115
 Federal  Communications  Commission  FCC  01-  192 
 C-  5 
 Table  4:  Estimated  Mobile  Telephone  Rollouts  by  Number  of  Launches  by  County 
 Total  Number  of 
 Providers  in  a 
 County 


 Number  of 
 Counties 
 POPs  Contained 
 in  Those 
 Counties  (1) 


 %  of  Total 
 US  POPs 
 Square  Miles 
 Contained  in 
 Those 
 Counties 


 %  of  Total 
 US  Square 
 Miles 


 3  or  More  1812  259,008,748  90.8%  1,420,596  40.3% 
 4  or  More  1273  240,652,202  84.4%  960,596  27.3% 
 5  or  More  906  214,143,935  75.1%  676,621  19.2% 
 6  or  More  485  133,133,133  46.7%  364,547  10.4% 
 7  or  More  138  33,845,568  11.9%  112,353  3.2% 


 Table  5:  County  Quartiles  with  Estimated  Rollout  by  at  least  3  Mobile 
 Telephone  Providers 


 County  Quartile 
 Based  on 
 Population 


 Total 
 Number  of 
 Counties  (2) 


 Number  of 
 Counties  with  at 
 least  3  Providers 


 Percent  of  Counties 
 in  Quartile  with  at 
 least  3  Providers 


 POPs  in  Those 
 Counties  (1) 
 Percent  of  Quartile 
 POPs  with  at  least  3 
 Providers 


 1st  Quartile  805  750  93.2%  229,657,015  97.9% 
 2nd  Quartile  805  530  65.8%  21,118,979  67.2% 
 3rd  Quartile  805  387  48.1%  7,099,963  50.2% 
 4th  Quartile  804  145  18.0%  1,132,791  22.6% 


 Source:  Federal  Communications  Commission  estimates  based  on  publicly  available  information. 
 Notes: 
 (1)  POPs  from  the  2000  Census. 
 (2)  United  States  and  Puerto  Rico 
116
 Federal  Communications  Commission  FCC  01-  192 
 C-  6 
 Table  6:  Estimated  U.  S.  Digital  Mobile  Telephone  Subscribers 
 Technology  1997 
 Subscribers 
 1998 
 Subscribers 
 97/  98 
 Percent 
 Change 


 1999 
 Subscribers 
 98/  99 
 Percent 
 Change 


 2000 
 Subscribers 
 99/  00 
 Percent 
 Change 


 Percent  of 
 Total  Digital 
 Subs 
 GSM  Subs  1,200,000  2,700,000  125%  5,200,000  93%  7,900,000  52%  12% 
 TDMA  Subs  3,800,000  8,700,000  129%  18,000,000  107%  25,900,000  44%  38% 
 CDMA  Subs  1,400,000  6,400,000  357%  15,600,000  144%  26,800,000  72%  40% 
 iDEN  Subs  1,300,000  2,900,000  123%  4,800,000  66%  7,100,000  48%  10% 
 Total  Digital  Subs  7,700,000  20,700,000  169%  43,600,000  111%  67,700,000  55% 
 Percent  of  Total  14%  30%  115%  51%  69%  62%  22% 
 Analog  Cellular  Subs  47,600,000  48,500,000  2%  42,400,000  -13%  41,800,000  -1% 
 Percent  of  Total  86%  70%  -19%  49%  -30%  38%  -23% 
 Total  Mobile  Phone  Subs  (1)  55,300,000  69,200,000  25%  86,000,000  24%  109,500,000  27% 


 Sources: 
 CDMA:  1997-  1999    Fifth  Report,  at  17752.  2000  -  CDMA  Development  Group,  CDMA  Worldwide  Subscribers  (visited  May  17,  2001)  < 
 http://  www.  cdg.  org/  world/  cdma_  world_  subscriber.  asp>.  The  figure  was  reported  for  North  America  as  a  whole  and  was  adjusted  for  the  United 
 States  by  removing  the  estimated  Canadian  CDMA  subscriber  of  BCE  Mobile  Communications,  Inc.,  Telus  Corp.,  and  Aliant  Inc. 
 TDMA:  1997-  1999    Fifth  Report,  at  17752.  2000  -  Conversation  with  Ben  Harvey,  Director  for  North  America  &  Membership,  Universal  Wireless 
 Communications  Consortium,  Mar.  2001.  The  figure  was  reported  for  North  America  as  a  whole  and  was  adjusted  for  the  United  States  by  removing 
 the  estimated  TDMA  subscriber  of  Rogers  Cantel  Mobile  Communications,  Inc.  and  American  Movil,  S.  A.  de  C.  Vs  Mexican  wireless  unit,  Telcel. 
 GSM:  1997-  1999  Fifth  Report,  at  17752.  2000  -  GSM  North  American  Customers  Top  10  Million  Mark,  News  Release,  GSM  North  American, 
 Mar.  27,  2001.  The  figure  was  reported  for  North  America  as  a  whole  and  was  adjusted  for  the  United  States  by  removing  the  estimated  GSM 
 subscribers  of  Microcell  Telecommunications,  Inc. 
 iDEN:  1997-  1999    Fifth  Report,  at  17752.  2000  -  The  iDEN  figures  are  the  combined  estimated  digital  SMR  subscribers  for  Nextel,  Nextel 
 Partners,  Southern  LINC,  and  Pacific  Wireless  Technologies,  Inc. 


 Notes: 
 (1)  Total  Mobile  Phone  Subs:  Appendix  C,  Table  1,  at  C-  2. 
117
 Federal  Communications  Commission  FCC  01-  192 
 C-  7 
 Table  7:  Mobile  Telephone  Digital  Coverage 
 Technology  POPs  in  Those 
 Areas  (1) 
 %  of 
 Total 
 POPs  (2) 


 Square  Miles 
 Contained  in 
 Those 
 Counties 


 %  of  Total 
 Square 
 Miles 


 TDMA  237,706,818  83.3%  1,471,170.0  41.8% 
 CDMA  241,997,667  84.8%  1,236,939.5  35.1% 
 GSM  196,851,329  69.0%  787,255.0  22.4% 
 iDEN  231,573,819  81.2%  960,801.2  27.3% 
 Total  Digital  271,077,680  95.0%  2,015,882.7  57.2% 


 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  CPI  All  Telephone  CPI  Local  Telephone  CPI  Long  Distance 
 Telephone  CPI 
 Index 
 Value 
 Annual 
 Change 
 Index 
 Value 
 Annual 
 Change 
 Index 
 Value 
 Annual 
 Change 
 Index 
 Value 
 Annual 
 Change 
 Index 
 Value 
 Annual 
 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-  97  to 
 Dec-  00 
 7.9%  -28.9%  -1.6%  10.0%  -10.5% 


 Source:  Bureau  of  Labor  Statistics 
118
 Federal  Communications  Commission  FCC  01-  192 
 C-  8 
 Table  9:  Top  20  Mobile  Telephone  Resellers:  1999  -  2000 
 1999  2000 
 Operator  Resale 
 Subscribers 
 Operator  Resale 
 Subscribers 


 MCI  WorldCom  950,000  MCI  WorldCom  2,  000,000 
 Progressive  Concepts  77,500  PageTel  Wireless  185,000 
 CellNet  Communications  55,000  Areawide  Cellular  118,000 
 Discount  Cellular  Inc.  46,079  Page  Plus  Cellular  100,000 
 Prime  Matrix  Wireless  46,  000  Direct  Communications  93,  000 
 DCN  Wireless/  Robo  Wireless  41,  896  AirPage  80,  146 
 Select  Wireless  40,000  Progressive  Concepts  80,000 
 Anything  Wireless  28,  000  Locus  Telecommunications  75,  000 
 Fox  Communications  26,  000  Cellnet  Communications  53,  000 
 Cellular  Plus  Systems  23,000  DCN  Wireless  41,775 
 Marathon  Communications  20,  000  PreCell  Cellular  40,  000 
 Cellnet  of  Ohio  Inc.  17,650  Discount  Cellular  36,546 
 SkyNet  17,609  Consumer  Cellular  25,000 
 Car  Phones  Express  14,863  Page  Express  24,182 
 The  Mobile  Phone  Co.  11,500  Cellular  Plus  Systems,  Inc  20,000 
 Pacific  Cellular  10,500  Car  Phones  Express  Inc.  20,000 
 San  Diego  Wireless  10,162  SkyNet  16,846 
 Apex  Wireless  8,500  Cellnet  of  Ohio  Inc.  16,750 
 Personal  Cellular  Service  3,  700  Aircell  Communications  15,  000 
 Phase  2  Cellular  3,500  Central  Cellular  15,000 
 Total  1,451,459  3,055,245 
 MCI  WorldComs  Percentage  of  top  20  65.5%  65.5% 


 Sources: 
 1999:  RCR  Top  20  Resellers,  RCR  RADIO  COMMUNICATIONS,  Jan.  10,  2000,  at  16. 
 2000:  RCR  Top  20  Resellers,  RCR  WIRELESS  NEWS,  Jan.  8,  2001,  at  18. 


 Note: 
 Resellers  are  defined  as  those  companies  that  do  not  own  a  mobile  phone  network  or  license  and  resell  wireless  airtime 
 from  a  licenses  carriers  mobile  switching  center 
119
 Federal  Communications  Commission  FCC  01-  192 
 C-  9 
 Table  10:  U.  S.  Mobile  Telephone  Operators 
 Holdings  in  Foreign  Mobile  Operators 


 Operator  Country  Subscribers 
 (Brand  name) 
 Venture  Ownership  (%) 


 France  9.319  million  Cegetel  (owns  80%  of 
 cellular  company 
 Societe  Francaise  de 
 Radiotelephone) 


 15  (through  JV  with 
 Vivendi) 


 Denmark  1.  741  million  Tele  Danmark  41.  6 
 Belgium  3.  062  million 
 (Proximus) 
 Belgacom  17.5  (controls  24.36% 
 through  investment  in 
 Tele  Danmark,  which 
 owns  16.  5%  of 
 Belgacom) 
 South  Africa  3.619  million 
 (Vodacom) 
 Telkom  SA(  owns  50% 
 of  Vodacom) 
 18 


 Canada  2.  22  million 
 (Bell  Mobility) 
 Bell  Canada  20 


 Mexico  9.775  million 
 (Telcel) 
 Telmex  8.  5 


 Taiwan  605,000  TransAsia  Tele- 
 communications 
 19.4 


 Brazil  1.  450  million  Algar  Telecom  Leste 
 S.  A. 
 25  (through  Telecom 
 Americas  consortium 
 with  Bell  Canada 
 International  and 
 Telmex) 


 SBC 


 Brazil  (Sao  Paulo  state)  940,000  Tess  S.  A.  62  (through  Telecom 
 Americas  consortium 
 with  Bell  Canada 
 International  and 
 Telmex) 
 Uruguay  126,748 
 (Movicom) 
 Abiatar  46 


 Guatemala  Mid-  2000  Launch  BellSouth  Guatemala  60 
 Nicaragua  90,  294  Nicacell  89 
 Ecuador  225,180  Otecel  89.  4 
 Panama  205,564  BellSouth  Panama  43.7 
 Brazil  (Sao  Paulo) 
 Brazil  (northeast) 
 BCP/  BSE  46 


 Brazil  (central  western  & 
 northern  regions) 


 3,708,090 
 Tele  Centro  Oeste 
 Celular 
 17.3 


 Venezuela  3,  234,972  Telcel  78.2 
 Argentina  1,  606,704  Movicom/ 
 BellSouth 
 65 


 Chile  690,720  BellSouth  Chile  100 
 Columbia  859,366  Celumovil  66 
 Peru  361,367  Tele  2000  96.8 
 Germany  6,  068,224  E-  Plus  22.5  (shares  equal 
 control  of  E-  Plus  with 
 KPN  through  ownership 
 in  BellSouth  GmbH) 
 Denmark  810,251  Sonofon  46.  5 
 Israel  1,856,488  Cellcom  34.7 


 BellSouth 


 India  36,899  SkyCell 
 Communications 
 50 


 Canada  3  million  Rogers  Cantel  17 
 India  176,800  Birla  Communications 
 Ltd. 
 49 


 Taiwan  3.211  million  FarEasTone  14 
 Czech  Republic  2.  11  million  EuroTel  Praha  24.  5 


 AT&  T 


 Slovakia  493,030  EuroTel  Bratislava  24.5 
120
 Federal  Communications  Commission  FCC  01-  192 
 C-  10 
 India  606,200 
 (BPL  Mobile) 
 BPL  Cellular  49 


 Italy  15  million  Omnitel  Pronto  Italia  23.  1 
 Mexico  1.  7  million  Iusacell  37.  2 


 Czech  Republic  2.  11  million  EuroTel  Praha  24.  5 
 Slovakia  493,030  EuroTel  Bratislava  24.5 
 Greece  1.  645  million  STET  Hellas  20 
 Indonesia  765,000  Excelcomindo  23.1 
 Japan  3.  84  million  Tu-  Ka  2.  7-  5 
 New  Zealand  1.  2  million  Telecom  New  Zealand  24.  9 
 Philippines  26,000 
 (Extelcom) 
 BayanTel  (owns  46.6% 
 stake  in  wireless 
 provider  Extelcom) 


 19.4 


 Argentina  950,000 
 (CTI  Movil) 
 CTI  Holdings  59.  5 


 Canada  2.156  million  TELUS  Corporation  22 
 Venezuela  1.  7  million  CANTV  28.  5 
 Taiwan  5.  1  million  Taiwan  Cellular 
 Corporation 
 13.5 


 Verizon 


 Dominican  Republic  393,000  CODETEL  100 
 Leap  Wireless 
 International 
 Mexico  536,000  Pegaso  PCS  20.1 


 Sprint  PCS  Mexico  536,000  Pegaso  PCS  25 
 Ireland  Launched 
 2/  01 
 Meteor  78 


 Iceland  55,000  TAL  57.3 
 Slovenia  Licensed 
 11/  00 
 Western  Wireless  100 


 Croatia  470,000  VIPnet  19 
 Georgia  NA  MagtiCom  14.  5 
 Ghana  NA  Western  Telesystems  56.  7 
 Cote  dIvoire  Launched 
 9/  00 
 CORA  de  Comstar  40 


 Bolivia  Launched 
 11/  00 
 NuevaTel  67 


 Western  Wireless 
 International 


 Haiti 
 678,000 
 for  all 
 foreign 
 ventures 


 NA  COMCEL  51 
 Canada  2.156  million  TELUS  Corp.  4.  8 
 Japan  49,000  NEXNET  Co.  32 
 Argentina  134,000  Nextel 
 Communications 
 Argentina 


 100 


 Brazil  322,000  Nextel 
 Telecomunicacoes 
 100 


 Mexico  218,000  Nextel  De  Mexico  100 
 Peru  68,000  Nextel  del  Peru  100 


 Nextel  International 


 Philippines  42,  000  Nextel 
 Communications 
 Philippines,  Inc. 


 51 


 Sources:  Publicly  available  information  such  as  operators  news  releases,  web  sites  and  filings  with  the  Securities  and  Exchange  Commission,  the  web 
 site  of  the  European  Radiocommunications  Office,  and  the  following  sources:  Cellular  Telephone  Subscribers  by  Network,  ASIACOM,  Mar.  6,  2001, 
 at  7-  10;  David  Luhnow,  Telefonica  Unit  in  Talks  to  Buy  Mexican  Stake,  THE  WALL  STREET  JOURNAL,  May  14,  2001,  at  13  and  16. 
121
 Federal  Communications  Commission  FCC  01-  192 
 D-  1 
 APPENDIX  D:  MOBILE  DATA 
 Table  of  Contents 
 Table  1:  Contracts  in  the  United  States  ..............................................................................................................  D-  2 
 Table  2:  Trials  in  the  United  States  ..................................................................................................................  D-  3 
 Table  3:  3G  Spectrum  Licensing  Abroad  ...........................................................................................................  D-  4 
 Table  4:  Mobile  Internet  Access  Services  ...........................................................................................................  D-  6 
 Table  5:  1996    1999  Paging/  Messaging  Industry  Numbers  ...............................................................................  D-  7 
 Table  6:  1996    1999  Number  of  Paging/  Messaging  Units  by  Publicly-  Held  Company  .....................................  D-  8 
 Table  7:  1996    1999  Revenues  by  Publicly-  Held  Company  ..............................................................................  D-  9 
 Table  8:  Advanced  Messaging  Services  ...........................................................................................................  D-  10 
 Table  9:  Handheld  Devices  with  Mobile  Internet  Access  ..................................................................................  D-  11 
 Table  10:  Bluetooth-  Enabled  Devices  ..............................................................................................................  D-  12 
 Table  11:  Telemetry  Services  ...........................................................................................................................  D-  13 
122
 Federal  Communications  Commission  FCC  01-  192 
 D-  2 
 Table  1:  Contracts  in  the  United  States 
 Hardware 
 Company 
 Carrier 
 Company 
 Announcement  Value  Summary 


 Pacific  Bell 
 Wireless 
 February  2000  N/  A  Pacific  Bell  has  selected  Ericsson  to  provide  GPRS  technology 
 on  its  existing  network. 
 VoiceStream  May  2000  $350 
 Million 
 Ericsson  will  provide  GPRS  and  WAP  network  infrastructure 
 equipment  and  handsets. 
 BellSouth  May  2000  $750 
 Million 
 Ericsson  will  upgrade  BellSouth's  networks  so  they  are  ready 
 for  migration  to  3G. 


 Ericsson 


 AT&  T 
 Wireless 
 November  2000  N/  A  Ericsson  will  provide  AT&  T  Wireless  network  equipment  and 
 mobile  phones  for  its  GPRS  network. 
 AT&  T 
 Wireless 
 November  2000  N/  A  GSM  with  GPRS  base  stations;  AT&  T  Wireless  selected 
 Lucent  as  its  major  3G  equipment  provider. 
 Verizon 
 Wireless 
 March  2001  $5  Billion  Lucent  will  provide  Verizon  Wireless  products,  services  and 
 software  for  its  cdma2000  3G1XRTT  network.  Lucent 
 Nextel  March  2001  N/  A  Lucent  will  provide  high-  speed  network  switches  for  Nextels 
 iDEN  network. 


 Motorola  Sprint  PCS  January  2001  N/  A  Motorola  will  provide  Sprint  with  cdma2000  network  upgrades  to  1x  packet  data  capability. 


 Nokia  AT&  T  Wireless  November  2000  N/  A  Nokia  will  provide  AT&  T  Wireless  GPRS,  triple-  mode  base  station  radio  solutions. 
 Nortel  AT&  T  Wireless  November  2000  N/  A  Nortel  will  supply  AT&  T  Wireless  with  3G  infrastructure  equipment. 


 Source:  The  information  provided  above  is  illustrative  of  technology  contracts  and  should  not  be  considered  an  exhaustive  list.  Information  is  based  on 
 publicly  available  documents  such  as  news  releases,  newspaper  and  periodical  articles,  company  web  pages,  and  SEC  filings. 
123
 Federal  Communications  Commission  FCC  01-  192 
 D-  3 
 Table  2:  Tests/  Trials  in  the  United  States 
 Hardware 
 Company 
 Carrier 
 Company 
 Announcement  Summary 


 AT&  T  Wireless  June  2000  Nortel  and  AT&  T  Wireless  will  conduct  non-  commercial 
 trials  of  GPRS.  Nortel 
 Networks  Verizon 
 Wireless 
 November  2000  Nortel  and  Verizon  Wireless  completed  trial  of  cdma2000 
 high-  speed  data  and  voice  transmissions. 
 Symmetry 
 Communication 
 s  Systems 


 January  2000  Symmetry  and  Lucent  have  agreed  to  collaborate  on 
 interoperability  testing  of  2.  5G  wireless  network  elements. 


 QUALCOMM  April  2000  The  companies  have  collaborated  on  3G  wireless  data 
 technology,  resulting  in  the  first  live  transmissions  of  over-the- 
 air  data  using  cdma2000-  1x  technology. 
 Sprint  PCS  June  2000  Will  test  1x  Evolution  (1xEV)  technology  which  is  based  on 
 HDR  and  incorporates  1xRTT. 
 Verizon 
 Wireless 
 July  2000  Verizon  and  Lucent  completed  a  wireless  data  transmission 
 at  ten  times  faster  than  current  CDMA  transmission  speeds. 
 The  wireless  transmission  was  complete  via  a  3G  network 
 installed  by  Lucent. 
 Verizon 
 Wireless 
 November  2000  Lucent  and  Verizon  will  trial  cdma2000  1xEV  for  3G 
 mobile  data  services. 


 Lucent 


 Sprint  April  2001  Lucent  and  Sprint  complete  a  trial  of  the  fastest  3G  data 
 call  at  a  speed  up  to  2.  4  Mbps.  The  test  was  completed 
 using  CDMA2000  1xEV-  DO  technology.  Testing  will 
 continue  through  June  2001. 
 N/  A  February  2000  The  company  announced  the  successful  completion  of  a 
 voice  over  Internet  protocol  (VoIP)  call  on  top  of  a  3G 
 high-  speed  packet  data  call  at  384  Kbps.  Motorola 
 Sprint  PCS  March  2001  Sprint  PCS  will  work  with  Motorola  to  conduct  Java  2 
 Platform,  Micro  Edition  (J2ME)  lab  trials.  J2ME  may  be 
 used  to  deliver  applications  to  customers  over  3G  networks. 
 Sprint  PCS  & 
 Samsung 
 Telecommunicat 
 ions  America 


 March  2000  The  companies  announced  that  they  have  successfully 
 completed  the  first  voice  call  by  a  carrier  using  3G  CDMA 
 1x  technology  in  North  America. 
 QUALCOMM 
 Sprint  PCS  May  2000  The  companies  announced  U.  S.  trials  of  a  3G  CDMA  1x 
 Multi-  Carrier  (MC)  voice  and  data  solutions  began  in  April 
 2000. 


 Sources:  The  information  provided  above  is  illustrative  of  tests  and  trials  and  should  not  be  considered  an  exhaustive  list.  Information  is  based  on 
 publicly  available  documents  such  as  news  releases,  newspaper  and  periodical  articles,  company  web  pages,  and  SEC  filings. 
124
 Federal  Communications  Commission  FCC  01-  192 
 D-  4 
 Table  3:  3G  Licensing  Abroad  Auction  Revenue 
 Or  License  Fee 
 Country 


 (status) 
 Spectrum 
 (MHz) 
 Number  of 
 Licenses 
 Assignment 
 Method 
 Foreign 
 Currency 
 US  Dollars 


 Austria 
 (Awarded 
 November  2000) 


 145  4-  6 
 (6  awarded) 
 Auction 
 (with  pre-  qualification 
 based  on  assessment 
 of  technical  & 
 economic  abilities) 


 ATS  11.443 
 billion 
 $714  million 


 140  in  capital 
 cities 
 4  or  more 
 (6  awarded) 
 110  in 
 Canberra 
 3  or  more 
 (5  awarded) 


 Australia 
 (Awarded 
 March  2001) 
 40  in  regional 
 areas 
 2  or  more 
 (3  awarded) 


 Auction  $1.170  billion  $575  million 


 Belgium 
 (Awarded  March 
 2001) 


 140 
 (105  sold) 
 4 
 (3  awarded) 
 Auction  Euros  450.2 
 million 
 $419  million 


 Denmark 
 (Scheduled  for 
 October  2001) 


 140  4  Auction  To  be  determined 


 Finland 
 (Awarded  March 
 1999) 


 140  4  Beauty  contest  No  charge  for 
 license    Annual 
 spectrum  fee  of 
 Euros  1000  per 
 25  KHz 


 Annual 
 spectrum  fee 
 of  $890  per  25 
 KHz 


 France 
 (2  awarded  May 
 2001) 


 140  4 
 (2  bids 
 received) 


 Beauty  contest  with 
 entrance  fee 
 FFr  32.  5  billion 
 per  license 
 $4.  74  billion 
 per  license 


 Germany 
 (Awarded  August 
 2000) 


 145  4-  6 
 (6  awarded) 
 Auction  99.368  billion 
 DM 
 $46.214 
 billion 


 Greece 
 (Expected  July 
 2001) 


 140  4  Auction  To  be  determined 


 Hong  Kong 
 (Expected  mid- 
 2001) 


 140  4  Combination 
 (pre-  qualification 
 followed  by  auction) 


 Royalty  percentage  of  service 
 revenue  to  be  determined  by 
 auction 


 Italy 
 (Awarded  October 
 2000) 


 145 
 (145  MHz 
 auctioned  & 
 20  MHz  sold 
 at  fixed  price 
 to  two 
 winning 
 entrants) 


 5  Combination  (pre- 
 qualification  beauty 
 contest  followed  by 
 competitive  bids) 


 L  23.55  billion  $10.084 
 billion 
125
 Federal  Communications  Commission  FCC  01-  192 
 D-  5 
 Ireland 
 (Expected  May-June 
 2001) 


 140  4  Beauty  contest  To  be  determined 


 Japan 
 (Awarded  July 
 2000) 


 120  3  Beauty  contest  Not  available 


 Netherlands 
 (Awarded  July 
 2000) 


 145  5  Auction  Fl  5.918  billion  $2.515  billion 


 Norway 
 (Awarded 
 November  2000) 


 140  4  Beauty  contest  Kr  400  million  + 
 annual  fee  of  Kr 
 20  million  per 
 license 


 $43  million  + 
 annual  fee  of 
 $2.  2  million 
 per  license 
 Portugal 


 (Awarded 
 November  2000) 


 140  4  Beauty  contest  80  billion 
 Escudos  + 
 annual  license 
 fee 


 $357  million 
 +  annual 
 license  fee 


 Singapore 
 (Originally 
 scheduled  for  April 
 2001) 


 140  4  Auction 
 (may  not  take  place 
 given  only  4  bidders) 


 To  be  determined 


 South  Korea 
 (2  awarded 
 December  2000;  1 
 more  expected  May 
 2001) 


 Not  available  3 
 (2  awarded) 
 Beauty  contest  Not  available 


 Spain 
 (Awarded  March 
 2000) 


 140  4  Beauty  contest  Euros  520 
 million  +  annual 
 fee  of  Euros  150 
 million  per 
 license 


 $462.8 
 million  + 
 annual  fee  of 
 $133.5 
 million  per 
 license 
 Sweden 


 (Awarded 
 December  2000) 


 140  4  Beauty  contest  SKr  400,000  + 
 annual  fee  of 
 0.15%  of 
 turnover 


 $44,000  + 
 annual  fee  of 
 0.15%  of 
 turnover 
 Switzerland 


 (Awarded 
 December  2000) 


 140  4  Auction  CHF  205  million  $120  million 


 Taiwan 
 (Expected 
 December  2001) 


 170  5  Combination  (pre- 
 qualification  followed 
 by  auction) 


 To  be  determined 


 UK 
 (Awarded  April 
 2000) 


 140  5  Auction  22.4774  billion  $35.411 
 billion 


 Sources:  Publicly  available  information  such  as  web  sites  of  national  regulatory  authorities,  the  EU  Commission,  and  the  ITU. 
126
 Federal  Communications  Commission  FCC  01-  192 
 D-  6 
 Table  4:  Mobile  Internet  Access  Services 
 ISP  Price  per  month  Notes 
 ALLTEL  Free  with  select  Total 
 Freedom  rate  plans 
 $5.95  with  select  digital 
 rate  plans 


 Users  can  customize  their  wireless  web  home  pages  to  include  pertinent 
 information  and  tools,  such  as  a  list  of  bookmarks. 


 AT&  T  Wireless  Free  with  AT&  T  Wireless 
 calling  plan 
 $6.99  to  $14.99  for 
 additional  services 


 Basic  free  service  includes  access  to  over  80  web  sites.  Plus  and  Premium 
 plans  include  access  to  all  web  sites,  email,  calendar,  contact  list,  and  other 
 features. 


 Cingular  Wireless  $6.  99  Available  in  13  cities.  Provides  content  such  as  movie  listings,  stock  quotes, 
 news,  weather  and  yellow  pages. 
 Earthlink  $79.95  unlimited  Ricochet 
 service 
 Service  available  on  Ricochet  devices  in  3  Ricochet  cities:  Atlanta,  Phoenix, 
 and  San  Diego. 
 GoAmerica  $9.95  for  25k 
 $59.95  unlimited 
 $74.95  unlimited  Ricochet 
 services 


 Available  to  users  of  several  different  devices.  Includes  access  to  a  Go.  Web  e-mail 
 account  or  to  an  existing  web-  based  e-  mail  account,  and  to  nearly  any  web 
 site  that  has  been  designed  for  mobile  access.  Users  can  customize  content 
 through  a  MyGo.  Web  portal. 
 Juno  $79.95  unlimited  Ricochet 
 service 
 Service  available  on  Ricochet  devices  in  15  cities  served  by  Ricochet. 


 Nextel  Online  From  $14.95  Partnered  w/  MSN  Mobile.  Allows  Internet  access  via  Nextel  phone  or  utilize 
 phone  as  a  modem  for  full  web  access. 
 OmniSky  $39.95  unlimited  Available  to  users  of  several  different  devices.  Includes  access  to  an  existing 
 web-  based  or  Microsoft  Outlook  e-  mail  account,  and  to  a  variety  of  web  content 
 that  has  been  designed  for  mobile  access.  Users  can  customize  content  with  My 
 OmniSky. 
 Palm.  Net  $9.99  50  KB 
 $24.99  150  KB 
 $44.99  unlimited 


 Available  to  the  Palm  VII  and  VIIx.  Includes  mobile  e-  mail  access  to  a 
 Palm.  Net  account  and  access  to  over  580  web-  clipped  sites. 


 Ricochet  $74.95  or  $75.95 
 unlimited  128  kbps  service 
 Modem  attachment  provides  mobile  Internet  access  for  laptops.  Service 
 available  at  128  kbps  in  13  cities  (Atlanta,  Baltimore,  Dallas,  Denver,  Detroit, 
 Houston,  Los  Angeles,  Minneapolis,  New  York,  Philadelphia,  Phoenix,  San 
 Diego,  and  San  Francisco),  and  at  28  kbps  in  three  cities  (Seattle,  Washington, 
 D.  C.,  and  parts  of  San  Francisco  Bay  Area)  while  it  upgrades  to  128  kbps. 
 Sprint  PCS  From  $9.99  with  Sprint 
 PCS  calling  plan 
 Calling  plan  minutes  can  be  used  for  either  calls  or  Internet.  Includes  access  to 
 over  80  web  sites. 
 Vaultus  (formerly 
 MobileLogic.  web) 
 $70.00  Wireless  web  access  package,  including  software,  wireless  Internet  airtime, 
 wireless  data  modem,  and  technical  support.  MobileLogic.  web  software 
 compresses  and  optimizes  web  pages  to  deliver  a  faster  transmission  over  the 
 wireless  link. 
 Verizon  Wireless  $6.95  Allows  users  to  customize  content,  either  with  a  handset  or  through  a  wired  PC 
 at  MyVZW.  com,  Verizons  portal. 
 VoiceStream  $4.99  Allows  limited  Internet  e-  mail  capacity  and  basic  web  info  in  the  form  of  text 
 messages  for  stock  quotes,  sports  scores,  etc.  Powered  by  InfoStream 
 (Infospace). 
 Wireless  Web  Connect  $74.95  unlimited  Ricochet 
 service 
 Service  available  on  Ricochet  devices  in  15  cities  served  by  Ricochet. 


 WorldCom  $79.95  unlimited  Ricochet 
 service 
 Service  available  in  8  Ricochet  cities:  Atlanta,  Baltimore,  Dallas,  Houston,  New 
 York,  Minneapolis-  St.  Paul,  Phoenix,  and  San  Diego. 


 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. 
127
 Federal  Communications  Commission  FCC  01-  192 
 D-  7 
 Table  5:  1998  2000  Paging/  Messaging  Industry  Numbers 
 Paging/ 
 Messaging 
 Units 


 Percent 
 Growth 
 Advanced 
 Messaging 
 Subscribers 


 Percent 
 Growth 
 Advanced 
 Messaging 
 Revenues 


 Percent 
 Growth 
 Average  Monthly 
 Revenue  Per  Unit 


 1998  45,100,000  4.40%  500,000  150%  $125,000,000  101%  $28.85 
 1999  45,800,000  1.55%  700,000  40%  $176,000,000  41%  $23.62 
 2000  45,300,000  -1.09%  1,200,000  71%  $257,000,000  46%  $22.29 


 Source:  THE  STRATEGIS  GROUP,  U.  S.  PAGING  SUBSCRIBERS  AND  REVENUES:  1995-  2004  (2000). 
128
 Federal  Communications  Commission  FCC  01-  192 
 D-  8 
 Table  6:  1996    2000  Number  of  Paging/  Messaging  Units  by  Publicly-  Held  Company 
 Company  1996  growth  1997  growth  1998  growth  1999  growth  2000 
 Arch  (1)  16,246,574  7.68%  17,494,743  -1.45%  17,240,908  -7.83%  15,891,000  -25.15%  11,894,000 
 Metrocall  (2)  4,576,148  16.50%  5,331,177  6.16%  5,659,550  4.74%  5,927,939  5.51%  6,254,373 
 Vodafone  AirTouch  (3)  2,850,000  8.81%  3,101,000  10.35%  3,422,000  n/  a  n/  a  n/  a  n/  a 
 WebLink  Wireless  1,851,445  35.75%  2,513,337  4.19%  2,618,527  1.70%  2,662,995  -16.70%  2,218,340 
 Ameritech  (4)  1,140,000  31.58%  1,500,000  2.80%  1,542,000  n/  a  n/  a  n/  a  n/  a 
 SkyTel  (5)  907,300  20.90%  1,096,900  29.62%  1,421,800  n/  a  n/  a  n/  a  n/  a 
 American  Paging  (6)  777,400  4.33%  811,100  n/  a  n/  a  n/  a  n/  a  n/  a  n/  a 
 Preferred  Networks  362,481  25.47%  454,795  15.50%  525,274  0.07%  525,622  -14.39%  450,000 
 Teletouch  (7)  195,500  64.25%  321,100  8.91%  349,700  12.73%  394,200  4.43%  411,700 
 Paging  Partners  (8)  83,000  81.93%  151,000  19.87%  181,000  n/  a  n/  a  n/  a  n/  a 
 Aquis  Communications  n/  a  n/  a  n/  a  n/  a  n/  a  n/  a  375,000  -8.8%  342,000 


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


 Notes: 
 (1)  In  June  1999,  Arch  completed  its  acquisition  of  MobileMedia.  The  Arch  figures  for  1996,  1997,  and  1998  include  MobileMedia  subscribers. 
 On  November  10,  2000,  Arch  Wireless  completed  its  merger  with  PageNet.  The  Arch  figures  for  1996,  1997,  1998,  and  1999  include  PageNet 
 subscribers. 
 (2)  On  December  30,  1997,  Metrocall  completed  its  acquisition  of  ProNet.  The  Metrocall  figures  for  1996  include  ProNet  subscribers.  On  October 
 2,  1998,  Metrocall  completed  its  acquisition  of  AT&  T.  Metrocalls  figures  for  1996  and  1997  include  the  AT&  T  subscribers. 
 (3)  Vodafone  AirTouch  does  not  report  paging  subscribers. 
 (4)  Ameritech  was  acquired  by  SBC  in  1999,  which  does  not  report  paging  subscribers. 
 (5)  SkyTel  was  acquired  by  WorldCom,  Inc.  which  does  not  report  paging  subscribers. 
 (6)  American  Paging  was  acquired  by  TSR  Wireless,  LLC,  a  privately  held  company  in  1998. 
 (7)  In  September  2000,  Teletouch  acquired  GTEs  Texarkana  paging  operations.  The  Teletouch  figures  for  2000  include  GTEs  Texarkana 
 subscribers. 


 (8)  Paging  Partners  was  acquired  by  Aquis  Communications  on  March  31,  1999  . 
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 TABLE  7:  1996    2000  REVENUES  BY  PUBLICLY-  HELD  COMPANY 
 Company  1996  growth  1997  growth  1998  growth  1999  growth  2000 
 Arch  (1)  $1,794,567  5.05%  $1,885,209  1.28%  $1,909,343  -14.55  %  $1,631,547  -47.83%  $851,082 
 Metrocall  (2)  $247,101  17.10%  $289,364  60.60%  $464,724  31.30%  $610,187  -7.90%  $561,983 
 Vodafone  AirTouch  (3)  $343,000  7.58%  $369,000  13.55%  $419,000  n/  a  n/  a  n/  a  n/  a 
 WebLink  Wireless  $221,592  25.36%  $277,778  12.19%  $311,652  4.34%  $325,165  -10.82%  $289,976 
 SkyTel  (4)  $330,239  14.27%  $377,366  28.87%  $486,304  n/  a  n/  a  n/  a  n/  a 
 American  Paging  (5)  $104,187  -9.38%  $94,413  n/  a  n/  a  n/  a  n/  a  n/  a  n/  a 
 Preferred  Networks  $11,734  52.67%  $17,914  9.23%  $19,567  n/  a  $17,033  -17.19%  $14,105 
 Teletouch  (6)  $31,725  30.46%  $41,389  9.11%  $45,159  13.24%  $51,138  10.66%  $56,591 
 Paging  Partners  (7)  $6,910  31.24%  $9,069  n/  a  $9,902  n/  a  n/  a  n/  a  n/  a 
 Aquis  Communications  n/  a  n/  a  n/  a  n/  a  n/  a  n/  a  $31,159  -7.95%  $28,683 


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


 Notes: 
 (1)  The  Arch  figures  are  pro  forma  figures  estimated  to  include  MobileMedias  and  PageNets  operations. 
 (2)  The  Metrocall  figures  are  pro  forma  figures  estimated  to  include  ProNets  operations.  AT&  T  did  not  separately  report  paging  figures. 
 (3)  Vodafone  AirTouch  does  not  report  paging  figures. 
 (4)  SkyTel  was  acquired  by  WorldCom,  Inc.  which  does  not  report  paging  figures. 
 (5)  American  Paging  was  acquired  by  TSR  Wireless,  LLC,  a  privately  held  company  in  1998. 
 (6)  In  September  2000,  Teletouch  acquired  GTEs  Texarkana  paging  operations.  The  Teletouch  figures  for  2000  include  GTEs  Texarkana 
 subscribers. 
 (7)  Paging  Partners  was  acquired  by  Aquis  Communications  on  March  31,  1999. 
 (8)  On  June  16,  2000,  Aquis  completed  its  acquisition  of  Suburban  Connect  and  on  February  1,  2000  the  company  completed  its  acquisition  of 
 SourceOne  Paging.  The  Aquis  figures  for  2000  include  Suburban  Connect  and  SourceOne  subscribers. 
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 TABLE  8:  ADVANCED  MESSAGING  SERVICES 
 ISP  Notes  Device  Cost  Monthly  Cost 
 Arch  Offers  mobile  e-  mail,  customized 
 profile  to  personalize  messages,  text 
 messages  up  to  5,000  characters,  and 
 assured  delivery  where  messages  are 
 stored  for  up  to  96  hours  when  the  unit 
 is  turned  off  or  outside  coverage  areas. 
 Also  offers  the  ability  to  download 
 wireless  applications  including  flight 
 updates,  ATM  and  restaurant  locations 
 and  maps. 


 Motorola  T900,  Motorola 
 PageWriter  2000x 
 $179.95  Arch  Webster  100 
 $14.95  to  $39.95 


 Cingular 
 Interactive 
 Offers  quick  response  time,  interactive 
 messaging.  Special  confirmation  feature 
 indicates  messages  are  delivered  and 
 read.  Able  to  retrieve  and  manage  e-mail 
 messages  from  different  sources. 
 Can  use  the  same  e-  mail  address  for 
 handheld  as  used  for  desktop  PC. 
 Offers  access  to  wireless  Web  content 
 including  headlines,  horoscopes  and 
 weather  forecasts. 


 RIM  950  $399  $44.99 


 Motient  Offers  the  eLink  wireless  e-  mail 
 service.  ELink  lets  users  send  and 
 receive  real-  time  e-  mail  messages  from 
 virtually  anywhere  in  the  United  States. 
 It  also  acts  as  an  inbox,  information 
 manager,  pager  and  calendar. 


 RIM  850  $399  $24.95  to  $59.95 


 Metrocall  Offers  interactive  messaging,  and  the 
 ability  to  send  and  receive  e-  mail.  The 
 service  can  be  integrated  with  desktop 
 e-  mail.  Also,  user  can  access  and 
 customize  Internet  content. 


 Motorola  T900, 
 RIM  850 
 $149.95 
 $399 
 $29.95  to  $59.95 


 Motorola  PF1500, 
 Glenayre  AccessMate, 
 $135 
 $150 
 SkyWord  Plus 
 $29.95 


 Glenayre  AccessLink  II, 
 Motorola  Timeport  T935, 
 Motorola  Talkabout  T900 


 $195; 
 $399; 
 $180 


 SkyWriter 
 $24.95 


 SkyTel  Ability  to  send  and  receive  e-  mail 
 messages  of  up  to  2,000  characters. 
 Offers  guaranteed  delivery  for  storage 
 up  to  72  hours  and  nationwide 
 coverage. 


 RIM  850  $395  ELink 
 $59.95 
 WebLink 
 Wireless 
 With  WebLink  Wireless  service,  users 
 are  able  to  send  instant  messages  to 
 other  wireless  devices  or  to  send  e-  mail 
 to  any  Internet  address.  Offers  the 
 ability  to  access  Internet  content 
 including  news,  sports,  and  weather. 


 Motorola  Talkabout  T900; 
 Timeport  P935; 
 PageWriter  2000x, 
 Glenayre  AccessLink  II 


 $99.95 
 $499.95 
 $19.95  to  $29.95 


 Verizon  Offers  interactive  messaging  and  access 
 to  Internet  content  including  news, 
 weather,  stock  reports,  sports  updates 
 and  more. 


 Motorola  Talkabout  T900  $124.95  $12.95  to  $29.95 


 Sources:  Information  is  based  on  publicly  available  documents  through  the  end  of  2000  such  as  news  releases,  newspaper  and  periodical  articles, 
 company  web  pages,  and  SEC  filings. 
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 Table  9:  Handheld  Devices  with  Mobile  Internet  Access 
 Handheld/  PDA  Manufacturer  Wireless  Internet  Connection  Price 
 Casio  E-  125  Casio  Nextcell  Pocket  Spider  Modem  $549.99 
 Compaq  iPAQ  -series  Compaq  PC  Card  Expansion  Pack  and  Sierra 
 Wireless  Aircard  300 
 $599 


 Visor  -series  Handspring  Novatel  Minstrel  S  wireless  modem, 
 VisorPhone,  or  Glenayre  @ctiveLink 
 advanced  messaging  module 


 $149-$  449 


 HP  Jornada  -series  Hewlett-  Packard  Minstrel  540  wireless  modem  $499 
 Palm  VII  and  VIIx  Palm  Built-  In  Wireless  $399  ($  299 
 Palm  III  and  V  Palm  Mobile  phone  or  Novatel  Minstrel 
 wireless  modem 
 $329-$  349 


 Palm  m105  Palm  Mobile  phone  $199 
 RIM  850/  950/  857/  957  Research  in  Motion  Built-  In  Wireless  $399-$  499 


 Sources:  Information  is  based  on  publicly  available  documents  through  the  end  of  2000  such  as  news  releases,  newspaper  and  periodical  articles, 
 company  web  pages,  and  SEC  filings. 
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 Table  10:  Bluetooth-  Enabled  Devices 
 Company  Product  Name  Product  Type 
 R520m/  R520mc  Mobile  phone  Ericsson 
 Bluetooth  Headset  Mobile  phone  accessory 
 Lifebook  C-  6632,  Lifebook  B-  2547,  or 
 FMV  BIBLIO  NE7/#### 
 Mobile  computers 
 Fujitsu 
 Bluetooth  Wireless  Modem  Access  Point  Computer  accessory 
 IBM  Bluetooth  PC-  Card  Computer  accessory 
 Bluetooth  PC-  Card  Computer  accessory  Motorola 
 Timeport  270  Mobile  phone 
 NEC  Corp.  Bluetooth  Printer  Adaptor  Computer  accessory 
 Siemens  Bluetooth  MPI-  Adapter  Mobile  phone  accessory 


 Sony  Notebook  Computers  PCG-  1524  and  PCG-  3314  Mobile  computers 
 Bluetooth  PC-  Card  Computer  accessory  Toshiba 
 Bluetooth  Data  Projector  Kit  Office  equipment 
 WIDCOMM  BlueConnect  Computer  accessory 
 Xircom  RealPort  2  Bluetooth  Adapter  Computer  accessory 


 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/  Template.  cfm?  LinkQualified=  QualifiedProducts>. 
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 Table  11:  Telemetry  Services 
 Company  Status 
 Schlumberger  5  million  wireless  telemetry  customers  in  North  America  connected  as  of  February 
 2001. 
 Itron  Offers  AMR  exclusively;  had  shipped  17  million  AMR  units  at  YE  2000  (10 
 percent  increase  from  YE  1999)  to  over  650  utilities. 
 Aeriss  MicroBurst  Leases  the  control  channel  of  cellular  networks  from  cellular  carriers  covering  98 
 percent  of  United  States.  During  2000,  Aeris  signed  agreements  with  the  following 
 telemetry  providers:  SupplyNet  Communications  for  the  inventory  and  logistics 
 management  of  liquid  and  gas  filled  tanks  (allows  distributors  to  remotely  monitor 
 the  storage  conditions  and  content  levels  of  tanks);  Telemetry  Technologies  for 
 mobile  asset  tracking,  automatic  meter  reading,  and  petrochemical  asset,  tank,  and 
 generator  monitoring;  LoJack  to  pinpoint  the  locations  of  vehicles  and  provide 
 motorists  with  services  such  as  emergency  roadside  assistance,  remote  door  unlock, 
 and  E911;  and  the  DPL  Group  to  provide  telemetry  services  for  DPLs  vending 
 machine  and  vehicle  fleet  monitoring  devices. 
 Cellemetry  Data 
 Service 
 Operating  unit  of  NumereX  Technologies;  leases  capacity  from  cellular  carriers 
 covering  99  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.  Remote  monitoring  equipment 
 manufacturer,  OmniMetrix,  uses  Cellemetry  network  to  provide  Caterpillar  with 
 wireless  remote  status  and  location  monitoring  for  its  fixed  and  mobile  generator 
 sets.  Cellemetry  signed  agreements  with  Advanced  Monitoring  &  Control,  Inc.  to 
 provide  monitoring  of  natural  gas  transport  pipelines,  and  with  Eberwhite  Data 
 Technologies,  Inc.  to  monitor  various  attributes  of  liquid  and  gas  storage  tanks. 
 WebLink  Wireless 
 Inc. 
 Its  telemetry  business  unity,  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  Interactive  Resells  network  to  telemetry  providers,  such  as  alarm,  billboard  sign,  and  vending 
 machine  monitoring  companies.  EverTrac,  Inc.,  a  joint  venture  of  Computer 
 Associates  International,  Inc.  and  United  Microelectronics  Corporation,  will  use 
 Cingular  Interactive  network  to  send  fleet  vehicle  data,  such  as  fuel  consumption, 
 mileage  and  location,  from  vehicles  to  offices. 
 SkyTel  Reflex 
 Telemetry  Services 
 Offers  telemetry  services  for  nearly  any  type  of  machine  measurement  system.  Uses 
 narrowband  PCS  spectrum,  satellite  backhaul,  and  CreataLink2  XT  wireless  data 
 transceiver  devices  to  monitor  and  transmit  remote  data  for  its  customers.  Data 
 transfer  speeds  are  25.6  kbps. 


 Sources:  Information  is  based  on  publicly  available  documents  such  as  news  releases,  newspaper  and  periodical  articles,  company  web  pages,  and  SEC 
 filings. 
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 APPENDIX  E:  MAPS 
 Table  of  Contents 
 Map  1:  Mobile  Telephone  Operator  Coverage  Estimated  by  County  ..................................................................  E-  2 
 Map  2:  Estimated  Rollout  with  Any  Digital  Coverage  ........................................................................................  E-  3 
 Map  3:  Estimated  Rollout  with  CDMA-  Based  Coverage  .....................................................................................  E-  4 
 Map  4:  Estimated  Rollout  with  TDMA-  Based  Coverage  .....................................................................................  E-  5 
 Map  5:  Estimated  Rollout  with  GSM-  Based  Coverage  .......................................................................................  E-  6 
 Map  6:  Estimated  Rollout  with  iDEN-  Based  Coverage  .......................................................................................  E-  7 
 Map  7:  Lowerband  Fixed  Wireless  Internet  Access  Rollout  Estimated  by  County  ...............................................  E-  8 
 Map  8:  Rollout  of  Fixed  Wireless  Internet  Access  via  Unlicensed  Spectrum  .......................................................  E-  9 
 Map  9:  U.  S.  Markets  with  Upperband  Fixed  Wireless  Deployment.  ..................................................................  E-  10 
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