Phoning on the go to get easier New FCC rules will clear the air for handful of wireless networks

September 20, 1993|By Edmund L. Andrews | Edmund L. Andrews,New York Times News Service

WASHINGTON -- America is about to start coming unwired.

A decade after cellular telephones first captured the hearts of the hurried and the well-to-do by letting them stay plugged in without being pinned down, the federal government is about to clear the airwaves for an expansion of wireless offerings more sophisticated than anything available today.

On Thursday, after four years of work, the Federal Communications Commission will adopt rules that will create three to six new wireless networks in every city and town. Bringing stiff new competition and probably a steep plunge in prices, these services are expected to reach millions of new customers and could eventually replace phones anchored by copper wires.

The first of these new wireless networks could be working within two years and could offer prices half those of cellular services.

The networks could be a mixed blessing, freeing people from their desks yet linking them to their jobs. Indeed, cellular companies are already building computerized systems that can automatically track a person's movements anywhere in North America, so the same telephone number will reach a person's desk phone or pocket phone wherever he or she roams.

But more than mere phones are on the horizon. Using the digital electronics of computers, the new "personal communications services" will be capable of sending data, images and perhaps even video to an expanding family of nomadic computing devices -- palm-size computers, electronic notepads and what some people call mutant devices that combine the features of a telephone, computer and pager.

The risks are also huge: no one knows just what consumers will be willing to pay for; the technology is still very new, and it will cost billions to build the new networks nationwide. But virtually every big communications company is angling for position and lining up capital.

The list ranges from media conglomerates such as Time Warner Inc. and newspaper publishers like the Washington Post Co. to long-distance carriers like American Telephone & Telegraph and MCI Communications, all the regional Bell companies and, of course, the current cellular industry.

Companies lining up

"We are about to launch a huge industry in the next week," said Scott Schelle, the vice president of American Personal Communications, a small company that is 70 percent owned by the Washington Post Co. and has built one of the first experimental personal communications services systems in the United States. "The timing is important because communications, computers and media are converging just as the wireless revolution is coming of age."

Indeed, many industry executives and experts said they believed wireless networks might replace much of the current wired phone network, relegating wall jacks to a place alongside the telegraph key and canal barge as antiquities of communications and commerce.

If the rapid growth of the $8 billion cellular business is any gauge, with 11 million subscribers already

using cellular phones and an additional 9,500 signing up each day, the market for new forms of wireless communications could be huge.

Tests of personal communications services, or PCS, in Washington, Pittsburgh, Tampa, Fla., and other cities have indicated that tens of millions of people are eager buyers -- if the prices are right and the services ubiquitous.

Arthur D. Little, a consulting firm in Cambridge, Mass., has estimated that personal communications services will generate 60 million customers in the United States by 2005.

Billions of dollars are on the line. For the first time ever, the FCC will grant radio licenses by auctioning them off to the highest bidders, rather than through lotteries or merit-based comparative hearings.

The first auctions could begin as early as next May. The Clinton administration estimates that these auctions will generate as much as $10.2 billion in revenue for the federal government over the next four years, and Wall Street investment bankers are already beginning to plot bidding strategies.

The technology for advanced wireless services has been tested at considerable length, and computer companies are already rushing to market with handheld devices that communicate over cellular frequencies.

The limiting factor has always been a shortage of free space on the airwaves, because almost all of the radio frequencies that can be used easily are already occupied. That is why the FCC's action, which comes after a tortuous effort to reallocate a big chunk of the spectrum, is so central.

Auctioning frequencies

At the meeting this week, the commission is to announce its final decision on how many licenses to issue in each market, how much territory each license will cover and how to conduct the auctions.

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