Scrambling to dispel the first threat to a decade of headlong expansion, the cellular telephone industry yesterday asked the federal government to help prove that cellular phones do not cause cancer.
The call came as investors continued to unload cellular company stocks in the wake of a Florida man's allegation that a hand-held phone had caused his wife to develop a brain tumor. Motorola Inc. and McCaw Cellular Communications Corp. both fell 9 percent in value in the day's trading.
Like former first lady Barbara Bush's taking a commercial flight at the height of the Persian Gulf War to show that such flights were safe from terrorist attacks, industry spokesman Thomas Wheeler yesterday showed himself willing to engage in a supposedly deadly practice.
"This is my phone," said Wheeler, president of the Cellular Telecommunications Industry Association, showing reporters a model similar to the one named by the Florida man. "I'm comfortable using this phone. I'm comfortable telling others to continue using their phones as well. ... Cellular phones are safe."
Wheeler said the industry was feeling the effects of a panic that began a week ago when David Reynard told his story on the CNN talk show "Larry King Live." Reynard is suing three companies in connection with his wife's death.
The man presented no medical evidence of a link but said he believes his wife's tumor, which developed just behind the ear to which she held her phone, was caused by radio waves emitted by the phone. His allegations do not apply to larger car-mounted phones, in which the radio waves come from an antenna outside the car.
For years, researchers have probed possible links between radio waves and various human maladies. But the cellular industry contends that scientists have found no correlation with cancer at the power and frequencies that the hand-held phones use.
Having signed on 10 million subscribers since its genesis in 1984, the cellular phone industry faces the equivalent of the tales of rats coming up from toilets. Regardless of the evidence, the mere thought is abhorrent.
A spokeswoman for Bell Atlantic Mobile, one of two companies providing cellular service in the Washington area, said some customers have called to ask about health implications and a few have expressed a desire to turn in their phones.
Yesterday, Wheeler said the industry would conduct a new medical study, possibly to cost more than $1 million. To assure that the public accepts the results, he asked that federal agencies appoint a special commission to review the methodology and findings.
"The atmosphere of a TV talk show or a product liability lawsuit is not conducive to a cool assessment of complex medical and scientific issues," Wheeler said.
Among industry stocks that felt the effects of the controversy yesterday, Motorola lost $4.87 1/2 to close at $51, McCaw was off $3.37 1/2 to $32.50, Vanguard Cellular Systems Inc. dropped $1.50 to $22.50, Lin Broadcasting Corp. fell $3.75 to $78.25 and Cellular Communications Inc. fell $2.50 to $31.75.
Cellular stocks have from their inception been volatile. This is in part because few of the companies currently show a profit, and people buy and sell based on the day's speculation as to which company will make money in the future.
"The issue is, do investors think that the public will perceive health hazards and act on them," said Susan Kalla, who watches the cellular industry for Fitch Investors Service Inc. Apparently, they do.
Al Mirman, a cellular analyst at securities firm Gruntal & Co., said the depth of the fall of cellular stocks may be because many have been trading at artificially high prices. News in November that AT&T would buy a major stake in McCaw led many investors to buy cellular stocks heavily, raising the price, in the hope of profiting from any future mergers.
Staff writer Kara Swisher contributed to this report.