Only 6 of 27 total applications for participation in the multichannel video distribution & data service (MVDDS) auction were accepted for filing, the FCC said. The accepted applicants, including MDS America subsidiary MDS Operations, will become qualified bidders once they submit upfront auction payments for requested licenses, the Commission said. Five of the 6 applied for licenses in all DMAs. The FCC said applications deemed incomplete could be resubmitted with corrections and upfront payments by the Dec. 8 deadline. Winners of the auction, scheduled for Jan. 14, will get licenses to operate in the 12.2-12.7 GHz with DBS operators.

The FCC opened an inquiry and adopted a proposal on a controversial “interference temperature” model for quantifying and managing interference among different services, potentially paving the way for new licensed and unlicensed services in existing bands. But several commissioners said that concept requires a cautious approach. Comr. Adelstein said he was worried it was “premature” to move forward with proposed rules “when we haven’t even engaged in a preliminary discussion on the interference temperature approach as a whole.” The proposal called for testing the model on a limited basis at 6 GHz and 12 GHz.

The Satellite Industry Assn. (SIA), in a letter to Senate Commerce Committee Chmn. McCain (R-Ariz.), disputed Northpoint Technology statements about its treatment by the FCC. SIA disputed Northpoint’s claim that it was at a regulatory disadvantage to satellite providers. In an Oct. letter to McCain, Northpoint said Multichannel Video Distribution & Data Services (MVDDS) should be exempt from spectrum auctions because they would provide a competing service to satellite DBS providers (CD Oct 30 p14). Northpoint is lobbying for amendments that would grant such an auction exception. One such amendment was added to the Senate Commerce Justice State appropriations bill (S-1585). “Northpoint’s assertion contrasts sharply with the position of the Honorable [FCC] Chairman Michael Powell, who indicated in an October 23, 2003, letter to you that the last decade has seen ‘explosive wireless growth, innovation and competition,'” the Nov. 11 letter said. SIA also said that while the FCC hadn’t held an auction for domestic DBS licenses in more than 6 years, the Commission had auctioned satellite licenses in another domestic satellite service, including the Digital Audio Radio Satellite (DARS). The FCC also will auction several DBS orbital positions soon, the letter said. SIA said Northpoint also was wrong when it said the FCC had given Boeing spectrum without auction. The FCC didn’t give Boeing spectrum in the 12.2-12.7 GHz band, as SIA said Northpoint reported, and the spectrum award was analogous to satellite earth stations, which also aren’t auctioned.

The FCC International Bureau’s recent decision on KaStarCom World Satellite “provides a clear precedent, even in the era of strict enforcement, for reinstating TMI’s 2 GHz [mobile satellite service (MSS)] authorization,” the companies said. The FCC had revoked TMI’s authorization in Feb. after deciding the company hadn’t entered into a noncontingent satellite manufacturing contract (CD Feb 21 p10). A recent order saying KaStarCom had satisfied its construction commencement milestone (CD Oct 29 p10) established that 3rd party contracts satisfied the initial construction milestone, “even though the licensee is not a signatory to the… contract and the assignee is not under common ownership at the time the milestone falls due,” the companies said. ICO also recently challenged the bureau’s KaStarCom decision on its contract with Mobile Communications and Constellation Communications (CD Nov 6 p14).

BOSTON -- “The challenge to policymakers is what all of you are doing,” acting NTIA Dir. Michael Gallagher told a room full of engineers Thurs. Improvements in “computer processing, battery power, nanotechnology -- which leads to miniaturization on an unbelievable scale -- are revolutionizing communications [and] will be the basis of new economic growth,” he said in a keynote at the Next Generation Networks show here.

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.