DIVIDED FCC ADDS MOBILE ALLOCATION TO 2.5 GHZ, SHUNS RELOCATION

Order also turned down petition for reconsideration filed by Satellite Industry Assn. (SIA), which had asked that Commission reconsider its decision to not allocate 2500-2690 and 2670-2690 MHz for mobile satellite service (MSS) use for 3G. Order said reallocating band to MSS was “unwarranted because sharing between terrestrial and satellite systems would present substantial technical challenges in that band and MSS already has access to a significant amount of spectrum below 3 GHz to meet its needs in the foreseeable future.” FCC said SIA’s petition depended on facts not previously presented to agency. Order said SIA provided ITU materials that “do not appear relevant” to 2.5 GHz band or incumbent licensees that used that band. “We also agree with opponents of SIA’s petition for reconsideration that ITFS/MMDS licensees are deploying services in rural, as well as urban areas; thus, in a best-case scenario, the areas in which geographical sharing with MSS could occur would be quite limited,” order said.

“Relying generally on market forces rather than making regulatory judgments about the best use of the band, a more flexible allocation would, for example, allow certain portable data applications to be provided under existing service rules,” order said. Such applications wouldn’t create harmful interference to incumbent one-way and 2-way fixed services. Flexibility also could usher in other advanced fixed and mobile applications, FCC said. Flexibility language earlier sparked concern in mobile wireless community that it could hamper overall 3G decision-making on obtaining additional spectrum because industry said it wasn’t technically feasible to share 2.5 GHz between fixed and mobile users.

In partial dissent, Copps and Tristani said record didn’t support flexible allocation in 2.5 GHz based on “rigorous analysis” required by Sec. 303 of Communications Act. That provision requires certain findings be made before flexible use is allowed in any band, including that such use wouldn’t create harmful interference between existing users and wouldn’t deter investment. Tristani, who voted before leaving Commission Sept. 7, and Copps said costs of undermining services delivered by ITFS licensees “would be high.” They said no educational users of 2.5 GHz had expressed support for adding mobile allocation. “Absent evidence that mobility will assist educational users, we risk the unintentional consequence of undermining the mission of the ITFS.” Tristani and Copps also disputed majority view that parties could begin mobile services in band without causing interference “because incumbent licensees will determine the specific services to be offered.” They wrote: “We believe a more prudent course would have been to not grant a mobile allocation at this time and indicate that, as technological and marketplace developments occur, it may be appropriate to review the 2.5 GHz allocation at a later date.”

In separate statement, Abernathy defended majority’s decision: “I do not believe that government is better positioned than these licensees to assess what is in their interest or how best to deliver their services.” She expressed regret that it took FCC nearly 6 months to come to decision after it released 3G report that concluded MMDS relocation for 3G would be extremely difficult. Statutory requirements compel FCC to reach such decision based on public interest, “not solely the ‘incumbents’ interests,'” she said: “Although I believe our decision in this case is consistent with both, there is an inherent danger in equating the two concepts -- as the dissenters appear to do.” Had FCC followed that line of reasoning 5 years ago, decision might not have been made to allow one-way analog video services to upgrade to 2-way offerings in these bands, she said. “Our interests must be broader than those of any one set of licensees; our interests must encompass the totality of the public interest.” Order itself doesn’t bar incumbents from continuing to offer existing services, but simply provides another option, Abernathy said. “It may well be that 10 years from now there will not be a single mobile use in these bands -- but I will still regard flexibility as the right policy.” While fixed wireless incumbents hadn’t sought mobile allocation, she said that wasn’t surprising because their focus on proceeding had been on staving off possibility of relocation.

Among issues that order has left to future proceedings are service rules that would permit sharing of fixed and mobile services in 2.5 GHz band. “We recognize that, under current technology and service rules, fixed and mobile (other than portable) sharing of the 2500-2690 MHz band does not appear feasible, but we anticipate advances in technology that may permit such sharing.” Order said that in service rules for 746-764 MHz and 776-794 MHz, agency struck balance with rules that would allow licensees flexibility to provide either fixed or mobile services and certain broadcast-type services on noninterference basis. FCC said it would like to achieve same balance for 2.5 GHz so mobile use of band wouldn’t impair fixed services. “We emphasize that if fixed and mobile sharing of the band continues to be infeasible in the long run, our service rules would ensure the protection of fixed operations,” order said. In other areas, it said FCC would address issue of how much additional spectrum from other bands was needed for advanced mobile services, which include 3G offerings.

CTIA Pres. Tom Wheeler expressed disappointment in FCC decision that he said “would limit its flexibility at this time as it seeks a solution to the spectrum shortage.” He said: “This action tries to have it both ways -- removing the 2500-2690 MHz band from consideration for advanced wireless services, while simultaneously suggesting its licensees might someday permit that spectrum to be used for wireless applications.” Wheeler said order didn’t help address continuing need for additional spectrum “for the most spectrum-constrained carriers.” He warned that decision could have “domino effect” on other spectrum decisions that awaited action by Administration and reiterated his call for comprehensive spectrum management plan.

Wireless Communications Assn. (WCA) praised order, with Pres. Andrew Kreig saying that “until now, MDS broadband wireless licensees and their ITFS educational partners have seen their deployment plans stalled by a disagreement that is essentially between licensees in other bands.”

WorldCom shares rose 11.55% Mon. to close at $13.81 on Nasdaq. WorldCom and Sprint are major holders of MMDS spectrum, with Nucentrix largest remaining independent holding licenses in band. Sprint PCS shares rose 8.61% to close at $25.60 on N.Y. Stock Exchange. Neither Sprint nor WorldCom had lobbied for mobile allocation in MMDS/ITFS bands and extent to which order will allow them to use flexibility to add to fixed wireless services in near term wasn’t clear, industry sources said. One source said order came at particularly sensitive time for mobile wireless industry, which is grappling with extent to which DoD spectrum isn’t likely to be easier to obtain for 3G services following Sept. 11 terrorist attacks and renewed emphasis on military readiness. One obstacle barring short-term use of MMDS spectrum for mobile uses is lack of equipment in band. Source said possibility existed in some markets for single operator to deploy both mobile and fixed applications. But several industry observers said barrier to mobile uses posed by potential interference in band was high. Several gave example of proximity of markets such as Baltimore and Washington, in which mobile system at 2.5 GHz in one market would be likely to interfere with fixed system in adjacent market.