Will wireless vanish into thin air?

In large part, people in the telecommunications industry and government say, that is because they are having difficulty buying or badgering broadcasters into giving up the frequencies they have long used to transmit analog signals. That space on the broadcast spectrum is needed to accommodate the so-called third generation of wireless communication, which promises to deliver video and other data over cellular phones and handheld devices.

On Monday, the Federal Communications Commission said it would delay a much-anticipated auction of television spectrum, UHF channels 60-69. It moved the auction from September to next March, saying it was accommodating parties that needed more time to prepare for the bidding.

But the reasons may have been more complicated, people in the telecommunications industry said. Television broadcasters currently inhabit the choice spectrum that the FCC had planned to auction. The regulators' assumption was that auction winners would simply negotiate with broadcasters to move them out. But just how that would happen and how much that would cost were unclear. Bidders feared their newly won licenses would wind up being held ransom for huge fees by broadcasters.

Others noted that the FCC didn't even start a rule-making procedure to figure out how to handle the broadcaster issue until July 1, ensuring that the planning process for moving out broadcasters would still be going on well after bidding started in early September. Many would-be bidders found the situation untenable.

"The FCC was worried about a train-wreck embarrassment" if the auction didn't go off well, said Scott Cleland, a regulatory analyst with Precursor Group in Washington, which advises industry and investment groups.

The problems with this first auction of TV airwaves preview a long, bitter fight over the government's ability to retrieve portions of the spectrum used by all television broadcasters. In 1996, broadcasters were allotted extra spectrum to make the transition to digital transmission. But they have made little progress in doing so because of the high cost of digital technology, uncertainty over the services they would offer and consumers' reluctance to buy new digital TV sets because of their steep price tags and the scant digital programming now available.

George Dellinger of Washington Analysis, another regulatory analysis firm, said the delays mean "the U.S. runs the risk of falling farther and farther behind other countries" on deployment of next-generation wireless technologies. Countries in Asia and Europe have been scrambling to clear spectrum for third-generation wireless products. Auctions of licenses for the new spectrum in Europe already have raised tens of billions of dollars.

The FCC has acknowledged the coming airwaves crunch and believes a major problem can be avoided by steps to free up spectrum, but industry leaders are still concerned.

FCC Chairman William Kennard, who has said wireless services are the wave of the future, has outlined plans to help free space, including making more-efficient use of the spectrum and "subleasing" spectrum space from an owner when they are not using it.

"I believe that spectrum management should be at the very top of your public-policy agenda, because government can't prevent a spectrum drought without you," Kennard told the Cellular Telecommunications Industry Association in February.

Denny Strigl, president and chief executive officer of Verizon Wireless, a unit of Verizon Communications, the nation's leading wireless company, said that in 10 years his company would need a little over twice the space it has now to expand into wireless Internet and video services. He said many in the industry are worried about the diminishing space for the third-generation wireless devices, especially when compared to what companies in Europe and Asia are allotted.

FCC officials note, though, that European and Asian countries often give out fewer licenses. This means less competition, but each license holder has more space to expand into next-generation wireless services.

Still, when the U.S. does proceed with auctions, they might pose problems for potential buyers. The broadcasters don't have to leave the channels that are being auctioned next March (2001) until 2006. They also don't have to leave the channels if 85% of the television market they broadcast in isn't transformed to digital yet.

"The bottom line is, the spectrum is not available, and may not be available when promised," said Cleland of the Precursor Group.

Former FCC Chairman Reed Hundt, now an adviser with the consulting firm of McKinsey & Co., studied the issue and suggests making broadcasters on UHF channels 14-69 give them up but guarantee the companies carriage on cable systems.

The National Association of Broadcasters opposes such a plan. The proposal would leave "thousands" of people who only receive UHF channels and can't afford cable or satellite with no free local television, said NAB spokesman Dennis Wharton.

Hundt argues that wireless companies will need a little over double the space they currently have in order to compete in the next five years. Strigl agreed with that estimate and said it may even be a little low. WASHINGTON -- With an explosion in wireless communications under way, U.S. firms and government regulators are growing increasingly concerned that there won't be enough airwaves to satisfy the huge demand.

In large part, people in the telecommunications industry and government say, that is because they are having difficulty buying or badgering broadcasters into giving up the frequencies they have long used to transmit analog signals. That space on the broadcast spectrum is needed to accommodate the so-called third generation of wireless communication, which promises to deliver video and other data over cellular phones and handheld devices.

On Monday, the Federal Communications Commission said it would delay a much-anticipated auction of television spectrum, UHF channels 60-69. It moved the auction from September to next March, saying it was accommodating parties that needed more time to prepare for the bidding.

But the reasons may have been more complicated, people in the telecommunications industry said. Television broadcasters currently inhabit the choice spectrum that the FCC had planned to auction. The regulators' assumption was that auction winners would simply negotiate with broadcasters to move them out. But just how that would happen and how much that would cost were unclear. Bidders feared their newly won licenses would wind up being held ransom for huge fees by broadcasters.

Others noted that the FCC didn't even start a rule-making procedure to figure out how to handle the broadcaster issue until July 1, ensuring that the planning process for moving out broadcasters would still be going on well after bidding started in early September. Many would-be bidders found the situation untenable.

"The FCC was worried about a train-wreck embarrassment" if the auction didn't go off well, said Scott Cleland, a regulatory analyst with Precursor Group in Washington, which advises industry and investment groups.

The problems with this first auction of TV airwaves preview a long, bitter fight over the government's ability to retrieve portions of the spectrum used by all television broadcasters. In 1996, broadcasters were allotted extra spectrum to make the transition to digital transmission. But they have made little progress in doing so because of the high cost of digital technology, uncertainty over the services they would offer and consumers' reluctance to buy new digital TV sets because of their steep price tags and the scant digital programming now available.

George Dellinger of Washington Analysis, another regulatory analysis firm, said the delays mean "the U.S. runs the risk of falling farther and farther behind other countries" on deployment of next-generation wireless technologies. Countries in Asia and Europe have been scrambling to clear spectrum for third-generation wireless products. Auctions of licenses for the new spectrum in Europe already have raised tens of billions of dollars.

The FCC has acknowledged the coming airwaves crunch and believes a major problem can be avoided by steps to free up spectrum, but industry leaders are still concerned.

FCC Chairman William Kennard, who has said wireless services are the wave of the future, has outlined plans to help free space, including making more-efficient use of the spectrum and "subleasing" spectrum space from an owner when they are not using it.

"I believe that spectrum management should be at the very top of your public-policy agenda, because government can't prevent a spectrum drought without you," Kennard told the Cellular Telecommunications Industry Association in February.

Denny Strigl, president and chief executive officer of Verizon Wireless, a unit of Verizon Communications, the nation's leading wireless company, said that in 10 years his company would need a little over twice the space it has now to expand into wireless Internet and video services. He said many in the industry are worried about the diminishing space for the third-generation wireless devices, especially when compared to what companies in Europe and Asia are allotted.

FCC officials note, though, that European and Asian countries often give out fewer licenses. This means less competition, but each license holder has more space to expand into next-generation wireless services.

Still, when the U.S. does proceed with auctions, they might pose problems for potential buyers. The broadcasters don't have to leave the channels that are being auctioned next March (2001) until 2006. They also don't have to leave the channels if 85% of the television market they broadcast in isn't transformed to digital yet.

"The bottom line is, the spectrum is not available, and may not be available when promised," said Cleland of the Precursor Group.

Former FCC Chairman Reed Hundt, now an adviser with the consulting firm of McKinsey & Co., studied the issue and suggests making broadcasters on UHF channels 14-69 give them up but guarantee the companies carriage on cable systems.

The National Association of Broadcasters opposes such a plan. The proposal would leave "thousands" of people who only receive UHF channels and can't afford cable or satellite with no free local television, said NAB spokesman Dennis Wharton.

Hundt argues that wireless companies will need a little over double the space they currently have in order to compete in the next five years. Strigl agreed with that estimate and said it may even be a little low.