WASHINGTON (AP) -- Insatiable consumer appetite for wireless phones, pagers, and handheld devices has made the nation's airwaves a dwindling resource. Looking for greater efficiency, federal regulators proposed rules Thursday that would allow companies to sublet frequencies licensed to them by the government.
If approved, the effort to create a secondary market would mark a sea change in how the government manages commercial use of the airwaves. Currently, a company must buy a license from the Federal Communications Commission to use radio spectrum for wireless or broadcast services.
But the booming demand for frequencies has prompted regulators to look at ways to free up more space. Under the FCC's new proposal, companies holding licenses could lease out portions of unused airwaves to third parties without agency approval.
"The tremendous success of wireless communications services has come at a price," said FCC Chairman William Kennard. Mobile phones, wireless computers and two-way pagers "are consuming spectrum faster than we can make it available. The demand for spectrum is simply outstripping supply."
While it is possible for some companies to lease frequencies now, they have to meet extensive requirements. The commission's proposed changes would greatly reduce barriers to create a secondary market for the airwaves.
In a separate action, the commission also voted Thursday to allow companies that make phones, modems and fax machines to certify that their equipment won't harm the phone network once connected. Previously, the commission had to give formal approval, which slowed introduction of these products into the retail market.
On the airwaves matter, companies that hold government licenses would be responsible for ensuring that interference-protection rules are not violated by a user subleasing spectrum.
The agency also encouraged the private sector to look for ways to unite supply with demand better in the market. For example, brokers could coordinate buyers and sellers or World Wide Web sites could be set up to list unused portions of the airwaves held by certain companies.
The FCC probably will vote in the first half of next year on whether to implement the changes.
On the equipment question, companies that make phones, faxes and modems now can show their products won't harm the phone network either by certification from an independent body or by providing their own declarations to customers.
That means companies won't have to turn to the FCC for approval, which can take four or more weeks and puts additional costs on the industry.
The commission originally established its review process in 1975 to create competition in the market for telecommunications products. Under the Bell monopoly system, only phones made by the company typically were allowed to be hooked into the network.
