Future of Spectrum Sharing Still Open Question Despite White House Push

Obama hasn’t issued an executive order making official PCAST’s suggested goal that the federal government identify 1,000 MHz of spectrum for sharing with industry (CD May 29 p1). At its May meeting, NTIA refocused the Commerce Spectrum Management Advisory Committee to concentrate on sharing (CD May 31 p1). PCAST historically has had significant influence since it was created in its present form by Bush in 2001. But membership of the group is not bipartisan, made up of academics and a few top industry officials, who are supporters of the president. The two industry members under Obama, Google Executive Chairman Eric Schmidt and Craig Mundie, Microsoft chief research and strategy officer, both come from the high-tech sector, which has often not been friendly to carrier arguments about their need for exclusive-use spectrum.

FCC Commissioner Robert McDowell, a Republican, criticized recent administration moves. “There appears to have been a very quick moving away from finding more federal spectrum to trying to find ways to foster spectrum sharing,” he told us. “Unfortunately spectrum sharing is not a panacea and the concept is still ill defined. The focus really needs to be on finding more federal spectrum and effectively implementing the new incentive auction legislation.” McDowell said he’s been “disappointed” in how the issue has been handled by the administration. “All of the signals coming out of the administration for the last several years have been that there would be an aggressive push to bring more federal spectrum to market, and there does seem to be a veering away from that goal and I'm not sure why,” he said.

AT&T CEO Randall Stephenson said at a recent event (CD June 13 p1) that there are still too many unknowns about how sharing would work to make it administration policy. “If we make policy decisions before the industry, the technology or anything is prepared to take advantage of it, then you create a bigger problem than you have today,” he said. “The technology is not ready to utilize this.” Stephenson said he had had no discussions with PCAST members about the sharing report in May urging that sharing effectively become administration policy for federal spectrum. Verizon Wireless and T-Mobile have come closer to at least looking at sharing. Last month, Verizon Communications CEO Lowell McAdam urged the federal government to explore options for spectrum sharing. T-Mobile filed an FCC application for an experimental license to do testing in the 1755 MHz band (CD May 11 p1).

"They need to get on board,” a senior FCC official said of carriers. “They'll eventually have to get into the mindset that it’s a positive thing."

"I can’t disagree with Mr. Stephenson. I think he’s exactly right,” CTIA Vice President Jot Carpenter said in an interview Friday. Cognitive radio solutions and software-defined radio make CTIA the most uncomfortable, Carpenter said. “It sounds great when they discuss it at PCAST or on a panel at one of these events around town,” he said. “The problem is that while it sounds cool, there is not yet a viable commercial, scalable product available that does it. If you're AT&T or Sprint or Verizon or T-Mobile or anybody else in the business, you can’t bring a cognitive radio solution to market and you have no expectation that you'll be able to do that anytime in the next decade. It’s interesting, but it’s still very much in the on-the-drawing board phase.” Sharing “scares the business guys because they don’t know how to build a business around it,” Carpenter said. “In an environment where you don’t control the spectrum it’s very difficult to make quality of service assurances, because you don’t know from one session to the next where in the spectrum you might be delivering service. That, in our view, is really not ready for prime time. It’s distracting. We wish there'd be less focus on it.”

Temporal or geographic sharing offer more possibilities, Carpenter said. “On the temporal side, if you know you've got a band where [the Defense Department] trains in the band four weeks of the year but the other 11 months of the year it lies fallow, there ought to be an opportunity to do some sharing the other 11 months its available for commercial use,” he said. “Similarly, if you know the Navy uses [a band] in Norfolk and San Diego, but they don’t use it anywhere in the interior, that whole band doesn’t need to be allocated to the federal government. A lot of it could be used by the private sector.”

"Before all of the advance in being able to move wireless communications off of your own network and onto Wi-Fi networks, or before the advent of pico cells and microcells … the need for spectrum on an exclusive basis was pretty real, no question,” said a former top FCC official. “But I think now folks are so hard pressed for spectrum they have to realize, ‘what are we going to do.’ Exclusive spectrum is not going to be readily available."

Public Knowledge Senior Vice President Harold Feld said it’s unclear how much changes if Republicans retake the White House, especially in light of resistance from the Defense Department to giving up its exclusive spectrum. “I think carriers are totally focused on getting the 1755-1780 block and do not want to give that up,” he said. “As for sharing elsewhere, I think there are varying degrees of interest. A number of carriers have significant Wi-Fi offload strategy, so they are getting more comfortable with spectrum sharing. At the same time, embracing sharing as a primary goal for federal spectrum is a radical change for the companies and the individuals involved in the discussions.” The Obama administration was “absolutely gung-ho on clearing 1755-1850, but the DOD was too strong,” Feld noted. “Both Democratic and Republican versions of the spectrum legislation required auction of the 1755 band, but DOD allies in Congress got it pulled from the final version despite White House support for it. This is an important point that some in the industry just don’t want to accept. The Obama administration embraced sharing as a co-equal, rather than secondary, way of moving spectrum into commercial use because it proved impossible to clear out enough spectrum over DOD and other agency resistance."

"Spectrum sharing enthusiasts generally overlook the fact that exclusively licensed spectrum is very well shared among millions of users, both wholesale and retail,” said Richard Bennett, Information Technology and Innovation Foundation senior research fellow. “Thirty years of history in both wireless and wireline networks shows that sharing with local management is much more efficient than opportunistic sharing. The appeal of raw spectrum sharing is that it undoes legacy spectrum allocation decisions without a long, drawn out administrative procedure; it’s also the most appropriate way to administer small networks, but it’s not a universal solution. Unfortunately, the debate on spectrum sharing is turning on symbolic issues that don’t have any technical standing."

Medley Global Advisors analyst Jeff Silva said sharing will likely be a fact of life for carriers, whether they like it or not. “In a perfect world, sure, wireless carriers would prefer a clean, linear approach to obtaining spectrum via auction or merger and acquisition as has been largely the case in recent decades past,” he said. “But that is not the real world today. The traditional spectrum allocation/licensing model is coming under increased pressure due to limited airwaves, competitive concerns and surging wireless data demand in the next iteration of the Internet that is mobile broadband. The bottom line is the spectrum challenge is apt to become more acute in coming years, with policymakers likely limited to considering a handful of imperfect options. It is hard to imagine spectrum sharing not being an option on the table in future administrations, regardless of party, especially in view of technological advances being made on that front."

Free State Foundation President Randolph May said sharing may have some potential. “To be sure, transfer of government spectrum with exclusivity rights is preferred because, with exclusivity, a licensee’s incentives to use the spectrum in the most efficient, highest value way are maximized,” he said. “But it seems to me there may be some situations when sharing may be workable and should be considered, at least on an interim basis until such time as an exclusive licensing regime for that spectrum band is established.”