7.9. & 7.10. SR 02-18-1997 - Laserfiche WebLink

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To make cell sites less obtrustive--and more politically acceptable--some firms are choosing stealth locations. Can you find the device on this building? See page 12 for the answer. locate on rooftops or conceal in other ways. Going once Back in 1981, the Federal Communica- tions Commission published a report on implications for economic development of the then very new cellular telephone technology. After a series of hearings, the commission invited providers to ap- pty for licenses to provide cellular ser- vices in 306 metropolitan service areas and 428 rural areas. So many companies applied that the FCC decided simply to assign local tele- phone companies enough radio spectrum (B bloc spectrum) to offer cellular com- munications in their own areas. A lottery was set up to allow nomtelephone com- panies to compete for the remaining A bloc spectrum. By the end of 1984-, nearly every major metropolitan area in the U.S. had been assigned to a carrier. In 1989, similar lotteries were held for the rural areas. The cellular lotteries exceeded all ex- pectations. Original estimates predicted fewer than a million subscribers by 2000. But by 1990, the cellular industry had attracted over 10 million customers. Im- pressed by this success, the FCC in 1994 decided to auction off enough radio spec- trum to allow at least two new service providers in every market. The service to be offered was referred to as PCS or personal communications services. The auctions were completed in March 1995 and raised over $7 billion. Yet another auction ,,vas held earlier this year, this time to encourage at least one more nationwide provider. About $10 billion was raised by auctioning off what is known as C bloc spectrum. Then, on August 26, the D and E bloc auctions were initiated. They are expected to be completed by the end of this month. No one is certain how the successful bidders will make use of this additional radio frequency. Auction winners with licenses may simply enhance their cur- rent systems by providing ancillary ser- vices, or they may offer dramatic new communications services. In any case, it is likely that the D and E bloc offerings will result in a need for more cellular towers. As a result of all this activity, local governments have been approached by already operating providers who are seek- ing to expand their coverage area or to supplement service where existing ca- pacity is exhausted. At a time when sub- scriber lists are growing by over 30 per- cent a year, incumbent carriers in major metropolitan areas may seek permission to build 15 to 50 facilities a year. The new PCS licensees and the new paging providers are also seeking sites, and so are the growing numbers of com- panies offering data communications and similar services. However messaging and data delivery services typically can use much smaller sites and often share exist- ing facilities with cellular or PCS provid- ers. The winners of the C bloc auctions (companies like Next Wave and Wireless PCS) are just now beginning to make an appearance. Like the PCS license hold- ers, they will need to build an entire network, with the number of sites de- pending on the type of technology used and the degree to which they can locate" with other providers. Many wire- less companies also use "stealthing" tech- niq~tes (hiding facilities on rooftops or elsewhere) to effectively conceal sites. Local governments can probably use their experiences with PCSs, which typically request permits for 50 to 100 facilities a year, as a guide to determine how many facilities a C bloc carrier might seek. In a hurry A wireless company typically spends be- tween $250',000 ~.d $700,000 to get a cell site up and running. Those A and B bloc providers that received their licenses in the i980s have actually built their sys- tems three times: first to serve customers with three-watt car phones, then to ac- commodate half-watt portables, and fi- nally to convert analog cellular systems to more efficient digital technology. Now come the successful PCS and C bloc bidders, and the soon-to-be-deter- mined winners of the D and E bloc spec- trum. All these companies have a tre- mendous monetary obligation to the federal government and to banks. In addition, stiff industry competition is forcing com- panies to lower access charges and fees for each minute of use--their two main sources of revenue. As a result, wireless service providers will be in a hurry to get construction permits, and they will resist schemes for imposing taxes, auctioning off access to public property, and other assessments.