Among the issues with which federal spectrum users are grappling as part of an interagency task force is whether there should be some form of Executive Branch oversight when differences arise on thorny policy issues, acting NTIA Dir. Michael Gallagher said Wed. President Bush in June created a task force to recommend how to stimulate more efficient spectrum use by federal customers. The next step the Bush directive set, which involves private sector input, will begin shortly and use the FCC’s Spectrum Policy Task Force report as a starting point, Gallagher told us.

Legg Mason said in a note to investors Mon. that FCC staffers appeared to be studying a compromise in the 800 MHz proceeding that was examining ways to mitigate interference to public safety users in the band. The firm said the plan under consideration at the agency could give Nextel less than the 10 MHz of spectrum at 1.9 GHz it had sought as part of a “consensus plan” devised by Nextel, public safety groups and some private wireless carriers. One possibility is that Nextel would get 4 or 6 MHz instead, perhaps at 1.9 GHz or maybe elsewhere, Legg Mason said. “In addition to giving Nextel less than the 10 MHz of spectrum that it seeks in the 1.9 GHz band, we believe the Commission is likely to require Nextel to increase its commitment to fund the relocation of public safety and private wireless operators in the 800 MHz band, either by placing a larger amount of money in escrow early on or agreeing to fund additional costs if necessary, or both,” it said. While cautioning that the proceeding still was being finalized, Legg Mason said the “latest staff leanings” would be good news for Nextel and the company probably would accept such a compromise. Nextel had said it submitted its plan to the FCC as a whole package, including the funding portion, but officials in recent weeks haven’t said how they would react if the FCC were to give them something less than what they wanted. One complicating factor for the FCC is that if it were to give Nextel up to 6 MHz at 1.9 GHz as part of a swap arrangement, “this may foreclose auctioning off the so-called G-band, which the wireless industry has sought to supplement its PCS services. This may mean that the FCC will look elsewhere for replacement spectrum for Nextel,” Legg Mason said.

Industry Canada (IC) weighed in at the FCC on an 800 MHz reconfiguration plan backed by Nextel and others, saying it didn’t address how to realign that band effectively along the U.S.-Canada border. IC said some proposed U.S. spectrum relocations under the “consensus plan” submitted to the FCC would “potentially create new reports of harmful interference to our Canadian licensees.” IC cited mutual aid channels shared along the border for public safety, which the plan recognized would need changes. “This will create major disruptions in the operation of systems along the border,” IC said.

Verizon Wireless told the FCC a study it commissioned from a national appraisal firm showed Nextel would receive a net financial gain of $6.5 billion from an 800 MHz rebanding plan backed by Nextel, public safety groups and others. Verizon has been among the opponents of the “consensus plan” for mitigating interference to public safety at 800 MHz, proposing an alternative that would rely on best practices and other interference reduction measures before rebanding was eyed. Nextel has said it would pay up to $850 million to relocate affected private wireless and public safety incumbents. That proposal, whose supporters include the Industrial Telecommunications Assn. and the Assn. of Public Safety Communications Officials, would reconfigure parts of the 700, 800 and 900 MHz bands, with Nextel exchanging its spectrum in each of those bands for spectrum elsewhere, including 10 MHz at 1.9 GHz. Among the thornier policy questions with which the FCC reportedly has been wrestling is how to quantify the value of the spectrum exchanged, particularly bands such as 1.9 GHz. The firm commissioned by Verizon to do an appraisal, Kane Reece Assoc., said in a 156- page report that if the consensus plan were adopted, the value of Nextel’s spectrum holdings would increase $7.2 billion. “Taking into account the amount that Nextel has pledged to pay for relocation, which Kane Reece computes has a net present value of $700 million, the consensus plan represents a windfall to Nextel in the amount of $6.5 billion,” Verizon Wireless told the FCC Mon. Nextel wasn’t available for comment. Kane Reece said it developed an estimate of the “fair market value of the spectrum” Nextel was proposing to give up and what it proposed to acquire. “The spectrum that Nextel would give up is seriously impaired, while the spectrum it proposes to get is not,” Verizon Wireless said. It reiterated arguments that while Nextel had told the FCC it was swapping equivalent amounts of spectrum, “the value of the spectrum it would receive is radically greater than the value of what it will turn in.” The Kane Reece report said the spectrum Nextel proposed to relinquish, including 4 MHz guard band spectrum at 700 MHz and 8.5 MHz of specialized mobile radio spectrum at 800 MHz, was shared with other users and not suitable for wideband, high-speed data services, the report said. The 10 MHz block at 1.9 GHz that Nextel would receive has a “fair market value” of $5.28 billion and the 6 MHz block at 800 MHz is $3.17 billion, the Kane Reece report estimated. Kane Reece said its appraisal used sources such as industry documents, FCC reports and standard appraisal techniques. “We note that our valuation conclusions are probably conservative due to the fact that December 2002 was a relative low point in public wireless equity values and that the FMV [fair market value] of the spectrum derived herein would most likely increase as of a more current date,” Kane Reece said.

The FCC issued rules Thurs. for the 1710-1755 MHz and 2110-2155 MHz spectrum bands, which it determined in Nov. 2002 could be used to offer an array of 3G services, including wireless broadband Internet access. The new rules include provisions for application procedures, licensing, technical operations and competitive bidding. “What we have done in the order is build a creative framework, so we will try to maximize the flexibility available to licensees in these bands,” FCC Wireless Bureau Chief John Muleta said. The FCC said the spectrum would be licensed by geographic areas under the Commission’s flexible, market-oriented Part 27 rules, and would be assigned by competitive bidding.

Several wireless carriers urged the FCC to keep intact its ban on in-flight cellphone use on commercial aircraft, citing the risk of interference to terrestrial wireless networks. In comments at the Commission this week, wireless developers also urged the agency to relax related rules to expand in-flight broadband wireless uses and provide more spectrum. Verizon Airfone argued for “exclusive use” of existing spectrum at 800 MHz for air-ground operations.

Current federal govt. systems for coordinating spectrum management between agencies and private users need to be revamped, said Joel Szabat, Dept. of Transportation (DoT) deputy asst. secy.-transportation policy. DoT is participating with other federal spectrum users in an interagency task force created by President Bush in June to recommend how to stimulate more efficient govt. use. The challenge is how to balance safety-of-life systems such as GPS and public safety while making room for new technology, Szabat said. “We want to protect those needs and still allow for the robust development of new commercial technology,” he told us in an interview.

At the World Radio Conference (WRC) that ended this month in Geneva some of most divisive conceptual debates emerged between N. American and European delegations, with the split based largely on differing regulatory philosophies, WRC-03 Ambassador Janice Obuchowski said. “What you see there is a very profound difference in how one regulates,” she said in an interview, and the differences emerged in areas such as policy on new spectrum for Wi-Fi and similar systems at 5 GHz. “With the U.S., we have a much stronger instinct for technology rather than a regulatory solution.”

The FCC last week considered proposed options for where to relocate federal spectrum users in the 1.7 GHz band to make way for advanced wireless services (AWS). Last fall, the agency adopted a spectrum allocation order and proposed service rules for 2 blocks of 45 MHz spectrum, including the 1710-1755 MHz that the Dept. of Defense agreed to clear for advanced services such as 3G. The other block was 45 MHz of the 2110-2170 MHz now occupied by nongovt. users. In its latest rulemaking, the FCC proposed to: (1) Let DoD use 2025-2110 on a co-equal, co-primary basis with nonfederal govt. operations for earth stations at 11 sites that supported military space operations. (2) Roll back the recent establishment of Wireless Communications Services (WCS) at 2385-2395 MHz, let federal and nonfederal flight test stations operate at 2385-2395 MHz and no longer make 2390-2400 MHz available for use by unlicensed PCS devices. That 2nd change would allow DoD to relocate all aeronautical mobile systems out of 1710-1755 MHz, “which is a major objective for facilitating the introduction of AWS.” The proposal said that over time DoD access to 2025-2110 MHz for uplinks for military space operations -- known as tracking telemetry and command operations -- could make more spectrum available at 1755-1850 MHz for “absorbing certain DoD systems displaced from the band 1710-1755 MHz.” The plan would permit military services to use fixed and mobile stations, except aeronautical mobile services, at 2025-2110 MHz, on a secondary basis at 6 sites in the Southwest. As part of those spectrum relocation possibilities, which look for places to move federal users to in spectrum that’s under the purview of the FCC, the WCS and unlicensed PCS proposals would provide replacement spectrum for DoD and commercial flight test stations, the Commission said. Those stations may lose access to 35 MHz at 1525-1535 MHz and 2320-2345 MHz shortly. The Commission said it licensed 2025-2110 MHz to Broadcast Auxiliary Service (BAS). During the comment period, NAB and MSTV told the FCC they didn’t oppose the idea of relocating some federal operations to the band as long as broadcasters weren’t deprived of essential BAS services. “We believe that this action would provide a reasonable opportunity for clearing the band 1710-1755 MHz for new nationwide AWS uses and that permitting DoD earth stations access to the band 2025-2110 MHz would also provide greater use of the band 2025-2110 MHz without a significant impact on incumbent operations,” the proposal said. The proposal is expected to have a minimal impact on unlicensed PCS use at 2390-2400 MHz, where federal and nonfederal use of 2390-2395 MHz is expected for a “limited” number of aeronautical telemetry ranges in remote areas. “We have reviewed our files and have found that no unlicensed PCS device has been authorized in the band 2390-2400 MHz,” the proposal said.

PanAmSat notified the FCC that it intended to withdraw its 11 applications for the planned fixed satellite service (FSS) system in the 40 and 50 GHz bands (V-band). The company also asked for a full refund of the $935,495 it had paid in filing fees. Citing the new space station licensing rules as the catalyst for its decision, PanAmSat said “it would be subject to financial, business and regulatory risks that did not exist when PanAmSat filed its application… Plainly these changes radically alter the risk and reward considerations that PanAmSat had before it when it filed its applications 6 years ago.”