Verizon and Nextel officials pitched different ways Mon. to fix public safety interference at 800 MHz, in a N.Y. City Council Technology in Govt. Committee hearing. Nextel, with public safety groups and others, backs the “consensus plan” at the FCC, which would entail rebanding at 700, 800 and 900 MHz; Nextel would give up some spectrum in exchange for bands elsewhere, including 10 MHz at 1.9 GHz. Verizon Wireless and others, including CTIA, have criticized the consensus plan as providing a possible spectrum windfall to Nextel. They prefer establishing best practices to fix interference. At a hearing on spectrum for public safety Mon., Verizon Dir.-Spectrum/Wireless Policy Donald Brittingham told the committee the “most offensive part of Nextel’s proposal” was the spectrum swap that would result in a gain to Nextel of $6.5 billion. (Nextel has disputed the figure). “This includes new PCS spectrum in the 1.9 GHz band that could be auctioned to raise more than $5 billion for the U.S. Treasury -- revenues that could be used to provide first responders with state-of-the-art communications systems or to increase funding for critical homeland security needs,” Brittingham said in prepared testimony. “At a time when New York and other great cities around this country are in desperate need of homeland security funding, it is appalling that Nextel would make such a self-serving proposal or that the FCC would even consider its adoption.” Nextel Vp-Govt. Affairs Lawrence Krevor, in written testimony, said the consensus plan created separate spectrum blocks for public safety operators and the technology used by commercial carriers, eliminating the problem of interference caused by bad “spectrum neighbors.” He said: “In other words, the really great news about the consensus plan spectrum realignment is that it eliminates the interference to public safety radios before it occurs, not after it prevents a fire fighter from calling for help in an emergency,” Krevor said.
Wireless Spectrum Auctions
The FCC manages and licenses the electromagnetic spectrum used by wireless, broadcast, satellite and other telecommunications services for government and commercial users. This activity includes organizing specific telecommunications modes to only use specific frequencies and maintaining the licensing systems for each frequency such that communications services and devices using different bands receive as little interference as possible.
What are spectrum auctions?
The FCC will periodically hold auctions of unused or newly available spectrum frequencies, in which potential licensees can bid to acquire the rights to use a specific frequency for a specific purpose. As an example, over the last few years the U.S. government has conducted periodic auctions of different GHz bands to support the growth of 5G services.
FCC Chmn. Powell expressed optimism Mon. technology could address the challenges of providing Enhanced 911 services on broadband networks offering VoIP applications. “We do have that rare opportunity to join hands and develop the solutions early, before our citizens and our consumers are using these services in overwhelming numbers,” he told a National Emergency Number Assn. (NENA) forum in Washington.
The FCC opened a comment cycle on a request by Nucentrix Spectrum Resources to assign certain licenses to Nextel. Petitions to deny are due March 22, oppositions April 1, and replies April 8. The companies are seeking FCC permission on the reassignment of MMDS, Wireless Communications Service, microwave and Cable TV Relay Service licenses from Nucentrix to Nextel. Nucentrix in Sept. filed for Chapter 11 protection in U.S. Bankruptcy Court, Dallas. In a court- supervised auction, Nextel submitted a winning bid of $51 million for certain Nucentrix assets, including spectrum and tower leases. “The applicants assert that grant of the instant applications would serve the public interest by allowing Nextel to increase its spectrum capacity and offer new digital wireless services to customers, including those customers in rural areas,” the FCC public notice said. The companies also argued the deal wouldn’t have an adverse effect on competition because Nucentrix and Nextel compete in different product markets. Nucentrix has told the FCC it plans to end its broadband data service in the 2nd quarter, providing customers with at least 90 days’ notice. Nextel has said that “pending the resolution of the Commission’s MDS and ITFS rulemaking proceeding, it will continue to provide the video programming services currently provided by Nucentrix DIP [Debtor in Possession] and by those ITFS licensees that rely on common links,” the notice said.
SAN FRANCISCO -- A senior FCC staffer indicated the outlook for unlicensed software-defined radio (SDR) using broadcast TV “white space” spectrum probably was closer to that seen by gung-ho Intel than by a highly skeptical broadcaster organization. Peter Pitsch, Intel communications policy dir., “says ‘no problem,'” said Bruce Franca, FCC Office of Engineering & Technology deputy chief, speaking at an Intel Developer Forum panel here late Wed. “Victor [Tawil, MSTV senior vp] says it can’t be done. I'm not going to tell you who’s right, because this is still an ongoing proceeding at the FCC.”
At our deadline Fri., Vodafone and Cingular Wireless were expected to submit bids for AT&T Wireless, with NTT DoCoMo reportedly bowing out of the competition for the carrier. It wasn’t immediately clear when the terms of any proposed offers would be made public, although AT&T Wireless’s board was expected to meet Sat. Legg Mason said in a research note last week that Cingular was the most likely winner. But Legg Mason said if Vodafone weighed in with a bid, Cingular could explore alternatives, such as pursuing T-Mobile USA if it didn’t win the auction for AT&T Wireless. “There have been preliminary discussions with Cingular and T-Mobile in the past so this option is not far- fetched, but the drawback is that T-Mobile has no interest in selling below its book value of approximately $22 billion,” Legg Mason said. It said that sum would be 10 times higher than the company’s projected earnings before interest, taxes, depreciation and amortization, which would be a significant premium to the 7 to 8 times multiple that AT&T Wireless might attain in its own bidding process. As for a Vodafone bid, Legg Mason said the biggest challenge would be the company unwinding its 45% stake in Verizon Wireless, its joint venture with Verizon. Another possibility stirring speculation Fri. was the emergence of Nextel as an AT&T Wireless bidder. Legg Mason said it didn’t expect a Nextel bid, but if it did, it probably would be based on concerns that “another company doesn’t obtain the wireless assets ‘on the cheap,'” it said. Meanwhile, UBS said in a research note Fri. that the sale of AT&T Wireless to either Cingular or Vodafone could affect the ownership of Venezuelan telco CANTV. If Vodafone won AT&T Wireless, Verizon would be likely to buy out Vodafone’s 45% minority stake in their joint venture. That could be financed in part by the sale of Verizon’s 28.5% ownership of CANTV, in which Verizon is the single largest shareholder, UBS said. Potential buyers could include Mexico’s Telmex or Spain’s Telefonica, it said. Medley Global Advisers said in a research note last week that regardless of whether Cingular or another carrier won the AT&T Wireless bidding, a “complicated and time-consuming merger review process” lay ahead at the FCC and Dept. of Justice. “The process will be cumbersome due to the range of technical and political issues that will need to be addressed,” it said, including questions on the appropriate ownership of spectrum in overlapping markets. In general, one scenario on which analysts were speculating last week was that a decision by AT&T Wireless could be announced as early as today (Tues.), although a bidder could still enter the fray beyond the 5 p.m. Feb. 13 deadline that the carrier had set for bids. As of late Fri., Vodafone reportedly was mulling a $34 billion bid for AT&T Wireless.
In its triennial report to Congress on entry barriers for entrepreneurs and small businesses, the FCC outlined 5 legislative proposals: (1) Create a new tax incentive program benefiting small businesses. (2) Establish a spectrum relocation fund for federal incumbents. (3) Clarify the FCC’s authority to conduct innovative spectrum auction designs and to ease the relocation of incumbent licensees. (4) Expand Commission authority to authorize operation of radio stations without individual station licenses. (5) Amend the Telecom Act to address potentially anticompetitive pricing practices used by incumbent cable operators that might impede market entry by competitors. The report also outlined each bureau’s work toward the goal of easing barriers. For example, the Media Bureau has developed procedures to allow small businesses to acquire existing radio and TV stations from other combinations that exceeded the new media ownership limits. The bureau also relaxed initial DTV build-out requirements for smaller-market broadcasters in view of financial concerns, the report said. The Wireless Bureau adopted rules to implement a framework for the development of secondary markets in spectrum usage rights. Comr. Copps dissented from the Commission’s 2003 Small Business Report, calling it a “slapdash catalog of miscellaneous Commission actions” rather than a serious effort to improve the communications climate for small business. He also said the Commission failed to address the challenges faced by small businesses as telecom consumers.” Comr. Martin, who approved in part and concurred in part, said that although the legislative proposals might have merit, he reserved judgment on them because the commissioners “were provided with only limited time to consider” them. Comr. Adelstein, who approved in part and dissented in part, said he supported most of the report but disagreed with suggestions that the Commission’s new broadcast ownership rules would promote diversity of media voices or eliminate entry barriers for newcomers. “Entrepreneurs and small businesses, as well as the general public, are in no way better served by slashing media ownership protections,” he said.
AT&T’s appeal of the FCC’s grant of 8 licenses in the 2 GHz band should be dismissed because the Commission’s decisions were “entirely proper,” 8 satellite companies said in intervening in the case on behalf of the FCC. The agency told the court AT&T lacked standing to claim the FCC should have held an auction for the licenses instead of simply giving authorizations. AT&T suggested that the Commission had violated the Communications Act when it decided not to hold extensive fact-finding proceedings on the viability of mobile satellite service (MSS). ICO was the only one that suggested MSS wouldn’t be viable without an ancillary terrestrial component (ATC), it said, while “other applicants disagreed with ICO about the economic viability of satellite- only MSS.” Five applicants, including ICO, later “sent the Commission a joint letter stating that nothing in the ICO letter seeking authority to provide ancillary terrestrial services ‘reflects a diminished need for MSS spectrum.’ On the contrary, most applicants believe that a terrestrial component is not necessary for the success of the MSS systems.” AT&T also said the agency had attempted to evade an auction by granting the 2 GHz licenses before deciding whether to allow ATC, implying that additional companies would have applied for 2 GHz licenses and an auction would have been required, an argument the intervenors said was wrong: “The Commission routinely accepts spectrum applications first, and then -- based on its review of the applications -- crafts rules on how the spectrum may be used. Even if the Commission had allowed the filing of additional applications… it is not likely that many (if any) additional companies would applied for 2 GHz MSS license. Significantly, the wireless carriers do not allege that… they would have filed applications to construct satellite systems.” The ORBIT Act would have precluded an auction for the 2 GHz spectrum, contrary to AT&T’s claim, they said.
Despite evoking scant interest in their commercial counterparts, public broadcasters are pressing ahead with their proposal for TV stations to embrace a hard date for analog switch-off. The Assn. of Public TV Stations (APTS) will submit a draft plan for stations to adopt a hard date for moving into digital-only operations to its board at public TV’s annual Capitol Hill Day in Washington Feb. 24-25, APTS Pres. John Lawson told us. The public broadcasters are planning to use the offer of an early return of analog spectrum to achieve a long-standing demand for a trust fund for public TV. PTV officials wouldn’t provide estimates of the size of the proposed trust fund, or the cost of set-top boxes.
The Network for Instructional TV (NITV) asked the FCC to consider another option to address whether Instructional TV Fixed Service (ITFS) licensees should be able to sell spectrum to commercial operators. NITV told the FCC in a filing last week that it was caught in a “triangle of unmanageable conflicts” involving the FCC’s interest in encouraging the fullest use of ITFS spectrum, a proposal by EarthLink to open parts of the band for broadband uses and educators who argue ITFS spectrum should be kept intact. NITV proposed a 4th alternative that would: (1) Let educators keep full use of the spectrum or lease options, as is the case under current rules. (2) Give educators the option of selling ITFS spectrum to commercial interests if they could demonstrate to the FCC they would use acquired funds to meet “their educational mission.” (3) Provide that 5% of any spectrum sold to the commercial sector be set aside for the continued use of the educator who held the original ITFS spectrum. “Leaving educators with only midband spectrum, as EarthLink suggests, and leaving educators potentially saddled with the entire cost of operating that spectrum, will not encourage auction participation because this approach is likely to diminish interest by educators fearful that no commercial party will provide operational support if ITFS is left only with the midband,” NITV said. The FCC adopted a proposal last year that asked a wide range of questions on how ITFS spectrum should be regulated. It sought comments on possible changes that would move away from a broadcast-style regulatory approach for ITFS and MMDS spectrum to one that would hasten the rollout of next- generation systems for wireless broadband.
Public safety groups called on President Bush Thurs. to push the FCC to finish the 800 MHz proceeding. They backed a proposal, supported by Nextel, for reducing interference to their systems in that band. Harlin McEwen, retired chief of police of Ithaca, N.Y., and chmn. of the communications & technology committee of the International Assn. of Chiefs of Police, said pending proposals were stalled at the FCC and the issue had become mired in a “corporate battle.”