T-Mobile Giving Serious Look at Sharing 1755 MHz Band with Federal Users, Sugrue Say

"Part of it is stimulated by the fact that the government is taking a hard line about the fact that [federal users] can’t move very quickly” from the band, Sugrue said. “Our own studies indicate that their uses are fairly light in the band. That suggests that there may be opportunity to share constructively, at least on a transitional basis.” Sugrue said there are two sites, Yuma, Ariz., and Cherrypoint, N.C., where government users have protections following the clearing of the AWS-1 band. “That’s a form of sharing, in a way,” he said.

The way the government uses the 1755-1850 MHz band would open the door to sharing, Sugrue said. “They're not operating all the time there,” he said. “There are not really that high powered [of uses] unless you're very close to them.” Exclusive use remains “the gold standard” but “we think things can be done” on sharing, he said. “The testing process … should examine that in much more detail and we hope to have preliminary results early next year."

Terry Addington, CEO of small carrier SI Wireless, said he’s not sure sharing is workable. “I'm all for creative solutions and all for out-of-the-box thinking, because that’s the way we have to approach a lot of things,” Addington said. “But the concept of sharing with the federal government, my gut reaction is ‘mmmmh,'” he said, making a face. “I'm not sure how that would work.” Sugrue joked that for federal users, “their gut reaction, actually, is the same thing.”

During a second panel Monday, panelists discussed the two notices of proposed rulemaking on rules for an incentive auction of broadcast spectrum and spectrum aggregation, slated for an FCC vote Friday.

"This auction will represent one great opportunity, and perhaps that last for quite some time, for a number of competitors to have access to low-band spectrum,” said Rick Kaplan, former chief of the Wireless Bureau. “It should be on the forefront of everybody’s mind … that this is a key moment in the history of the development of the wireless industry.”

"The goal of this chairman, I think, has been to strive to create abundance and it’s a lot more fun and a lot more effective than trying to manage scarcity,” said Bryan Tramont of Wilkinson Barker, former chief of staff at the FCC. Tramont said FCC Chairman Julius Genachowski deserves “a lot of credit” for getting Congress to approve an incentive auction as part of the February spectrum law. “Bringing an idea from sort of the innards of the FCC, popularizing it and getting a law passed is no small accomplishment,” he said.

The lack of auctions during Genachowski’s chairmanship shows the “need for long term spectrum planning, which government has historically been terrible at,” Tramont said. “We're right now suffering a bit of the failure to plan. … Some of that is going to be remedied, but we're in a scarcity period because of the failure to plan beyond AWS.” Tramont said he’s not sure if enough is known yet about whether an expected proposal to hold a “concurrent” reverse auction of broadcast spectrum and the forward auction of wireless broadband will work. “This is an NPRM,” he said. “There are real reasons to have these two auction processes run close to one another. The essential element in the incentive auction is that the revenue, at the end of the day, has to be greater than the cost of the reverse auction, $1.75 billion … and the cost of running the auction itself.” Breaking even “is really not what the regulator’s goal is,” he said. “They need to raise money for FirstNet. They have deficit reduction.” If the auction revenue doesn’t exceed the costs “then you effectively have a failed auction,” he said. “Recall that there’s only the ability to have one reverse auction here.”

"It’s going to be a really interesting process,” said James Barker of Latham & Watkins. “The mechanics will be important. There’s so much that’s new here. A lot of it is going to be a matter of getting two industries comfortable with a new methodology.” The notice “will give some pretty detailed ideas about what the commission has got in mind about how this work,” Barker said. “Concurrent doesn’t necessarily have to mean ‘concurrent.’ It could be staged. … One of the things the commission always wrestles with in these auctions is transparency and anti-collusion and anti-gaming. I think there’s a fear that the more gap you put between the auctions the more it could encourage strategic bidding and strategic behavior.”

On concurrent auctions, Michael Lazarus of Telecommunications Law Professionals said “quicker is better,” but concerns remain. “If you have them too close together there’s a lot of concerns,” he said. “I think it’s going to be hard for wireless carriers. If you've ever filled out an auction application or participated in an auction, it’s not a short or easy process. If carriers go through that without knowing what exactly they're going to be bidding on … it’s going to be very difficult for them to prepare."

"For broadcasters, one of the two pieces of the equation is clearly a quick process for them,” Kaplan said. “Otherwise, it’s not worth it for them to participate” in the auction, he said. “The burden is too high. The risk is too high.” Kaplan said the FCC examined in some detail the likelihood that broadcasters would take part in the incentive auction. “Clearly, if they're going to act rationally, there’s a group of stations in every market, especially the major markets where the economic benefits is probably greater … to sell off their spectrum,” he said. “You wouldn’t be looking at network affiliates or anyone like that, but there’s a lot of stations out there.”

"Getting broadcasters comfortable … in all kinds of markets all around the country and allowing them to engage in economically rational transactions that allow them to change their spectrum holdings is incredibly, incredibly important,” Tramont said. “To me, that will be the fundamental difference between whether this works or it doesn’t."

Spectrum sharing between carriers and the federal government is worth further study, but many questions remain, the communications lawyers said. The President’s Council of Advisors on Science and Technology released a report in July which advocated a shift of administration policy toward greater sharing between federal and commercial users, using dynamic sharing technologies.

"The imperative should be licensed and cleared and it shouldn’t be ambiguous,” Tramont said. “But we have shared. We will continue to share. … If you look up and down the table of allocations, the vast majority of spectrum in this country is shared.” Dynamic sharing like that envisioned by the government is “a much more complex exercise. It is a much longer-term effort,” he said. “It is important to engage in that effort. No one is manufacturing new spectrum in a basement. We're going to have to learn to share."

"Carriers want free, licensed spectrum. They want to own it. They want to build what they want to build on it,” Lazarus said. “If you talk too much about sharing, particularly with respect to government spectrum, it sort of gives a number of agencies in government a way out. I don’t think that’s what we should be focusing on just yet, at this point."

"In the short to mid-term, there’s no question that licensed and cleared is better for the carriers,” Barker said. “I think the reason some elements of the industry have been critical of PCAST is that no one sees a realistic way in the near term for this vision to be implemented and yet they're pushing [it] as a realistic option.”

Genachowski taped a message for CCA attendees, which was played at the group’s banquet Sunday. “This month is a big month for spectrum,” he said, citing the two NPRMs. “We know that spectrum is the lifeblood of carriers of all sizes and we're focused on establishing policies that provide predictability and competition.” Genachowski also commented on CCA’s top issue, its push for a mandate that all devices be interoperable across the lower 700 MHz band. He was noncommittal. “On interoperability, I understand the importance of this issue for CCA members, and as you know the commission launched a rulemaking earlier this year to look into this,” he said.