Washington, D.C.
     A political donation by wireless pioneer Craig McCaw is sparking a 
controversy over wireless licenses awarded to a new Internet access company 
controlled by McCaw and Microsoft Corp. Chairman Bill Gates.
     House Commerce Committee Chairman Thomas Bliley (R-Va.) recently wrote 
Federal Communications Commission Chairman William Kennard asking why the 
McCaw-Gates venture, Teledesic Corp., was given 18-GHz spectrum without 
bidding for it in an auction.
     Teledesics  planned self-named broadband system will involve 288 
low-earth orbit satellites providing global Internet access. It received 
spectrum last March in an FCC ruling requiring it to pay an unspecified sum 
to Teligent Corp., another emerging wireless access carrier that held 
competing 18-GHz licenses.
     The move has raised questions for three reasons:
     A McCaw-controlled holding company gave $50,000 to the Democratic 
National Committee in September 1996, five weeks before the presidential 
election.
     Other carriers have sought space in the 18-GHz band or the 24-GHz 
band, where Teligent relocated under the settlement.
     There were no auctions of the licenses or opportunity for public 
comment before they were awarded.
     Teledesic's operations are just getting ramped up, with no satellites 
launched yet and service not expected to begin until 2002. Still, the 
project promises to provide users far more ubiquitous broadband Internet 
access than typically is available today, with standard connections of up 
to 2M bit/sec (NW, Sept. 8, page 30).
     The FCC has contended it needed to clear space in the 18-GHz band by 
moving Teligent to the 24-GHz range because of national defense 
considerations. Too many competing users in the 18-GHz band would pose 
national security problems because part of the available space is used by 
government earth stations in Denver and Washington, D.C.,  the FCC said.
     But Bliley questioned the FCC's reasoning. In his letter, he asked 
Kennard to cite other instances of moving around large amounts of spectrum 
due to national security considerations. He also asked why the 24-GHz 
spectrum awarded to Teligent was not opened for auction.
     Larry Williams, director of external affairs for Teledesic, said the 
FCC felt that because the spectrum relocation was deemed a matter of 
national security, it did not require a comment period or auction. The FCC 
spent three years in an earlier public rule-making determining what 
frequency bands to place low-earth orbit satellite operations in, Williams 
added.
     Bliley also addressed his questions to Assistant Commerce Secretary 
Larry Irving. The Commerce Department's National Telecommunications and 
Information Administration plays a large role in spectrum licensing.