Bugging The Fcc Over A Cellular Licensing Lottery

Foreigners may buy American office buildings, farmland, and movie studios, but not the airwaves. Investors from Canada, Mexico, Japan, Britain, and elsewhere found that out the hard way when they sought licenses to run cellular phone companies in rural markets such as Hammond, La., and Heflin, Ala. Eighteen partnerships that included foreign investors won license lotteries in 1988 and 1989, only to be disqualified later by the Federal Communications Commission. The reason: In 1990, the FCC declared that in cellular partnerships, aliens could serve only as nonvoting limited partners.

So on Apr. 9, the FCC conducted a new lottery to award licenses in all 18 markets. But the original winners are suing after rejiggering their ownerships to comply with the FCC's new interpretation of the Communications Act of 1934. "The FCC is attempting to retroactively apply a new interpretation of the statute at my clients' expense," says Tom Carroccio, attorney for five partnerships. The clock, meanwhile, ticks on: The new lottery winners could be on the air within 18 months.

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