The Office of Communication of the United Church of Christ (UCC) opposed a recent request to the FCC by WorldCom for a ruling that SkyTel and its other wireless affiliates could participate in May 13 spectrum auctions. At issue is whether SkyTel qualifies to compete in a paging band auction amid questions over the default status of 2 Multipoint Distribution Service licenses held by Wireless One, which is another WorldCom affiliate. FCC rules say that bidders are eligible to take part in an auction only if they have satisfied outstanding installment payment defaults. WorldCom sought a ruling that its wireless subsidiaries were in compliance with the auction eligibility rules or a waiver of those rules. UCC told the FCC Fri. that WorldCom “committed massive fraud resulting in the largest bankruptcy in U.S. history. It would be simply unfair to allow WorldCom, a company known to operate fraudulently, to participate in future FCC auctions without fully complying with the FCC’s auction eligibility rules. To do so would eviscerate the purpose of the FCC’s auction eligibility rules, which in part are to deter speculation and insincere bidding as well as to ensure that a particular authorization goes to the auction participant that values the authorization most.”
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.
MONTEREY, Cal. -- The DBS industry is looking to sweeten slightly its position under the Satellite Home Viewer Improvement Act when it comes up for review next year, Satellite Bcstg. & Communications Assn. Pres. Andrew Wright said Wed. “We're looking for reauthorization with just a few little technical improvements, to make us a little more competitive with cable,” he said in an address to a Satellite Entertainment conference here. He said he wasn’t ready to disclose the changes.
The Wireless Communications Assn. (WCA) told the FCC an application freeze in a recent order on changes in the Instructional TV Fixed Service (ITFS) and Multipoint Distribution Service (MDS) could bar 30,000 system operators from rolling out wireless broadband to at least 80 markets in the next year. Most of those 80 are beyond the 100 largest markets “and include homes and businesses that do not have access to cable modem or DSL service,” it said. WCA petitioned the FCC earlier this month to reconsider a recent proposal that would move away from a broadcast-style regulatory approach for ITFS and MDS. The changes are designed to update the regulations for those services in a way that more easily would accommodate the rollout of wireless broadband and other new services. WCA asked the Commission to roll back its decision that immediately froze the filing of applications for new or modified ITFS and MDS facilities. The group urged that the freeze be limited to ITFS stations located outside existing protected service areas that essentially would be seeking licenses for ITFS “white space” or unassigned spectrum. WCA said in a filing Wed. it was responding to an informal inquiry by FCC Wireless Bureau staff on the freeze’s impact. The association said a more limited freeze would let current licensees deploy new wireless broadband system while protecting the FCC’s interest in preserving auctionable ITFS “white space” from encroachment. WCA said it polled its members on the impact of the filing freeze on wireless broadband systems planned in the next year, although it said the freeze could last longer. It said the markets affected by the filing freeze included: (1) 28 where the existing wireless broadband system operator wouldn’t be able to carry out plans to add the cells needed to expand network capacity in its current service area or expand its service area to cover those not now served. (2) Several where MDS/ITFS-based wireless broadband wasn’t publicly available now, although operators already had invested in “preapplication” activities. (3) 2 in which ITFS licensees had been frustrated in plans to deploy noncommercial 2-way broadband systems for their own use. WCA also rejected the idea that liberal grants of waiver requests would get around the problems posed by the broad freeze. “The public interest is not served by requiring licensees to spend resources on preparing waiver requests and suffer the delays in application processing that will inevitably result,” it said.
WorldCom asked the FCC Wireless Bureau to rule that SkyTel and its other wireless affiliates were eligible to participate in Commission auctions. In dispute is whether SkyTel qualifies to compete in a May 13 paging band auction amid questions over the default status of 2 Multipoint Distribution Services (MDS) licenses held by Wireless One, another WorldCom affiliate. FCC rules stipulate bidders are eligible to take part in an auction only if they have satisfied outstanding installment payment defaults.
Wireless carriers urged the FCC, as part of its proposals to reallocate spectrum to make way for advanced wireless services, to consider that potential interference to existing and planned services must be “paramount.” Several commenters this week on a Feb. proposal to reallocate spectrum for advanced wireless services, including 3G, backed plans that would create a significant spectrum block for PCS- like terrestrial services. CTIA backed the creation of a new “G-block” that would pair 1910-1915 MHz with 1990-1995 MHz for a PCS-like terrestrial wireless service.
The international telecom market will grow at 10.1% this year to $1.4 trillion, reversing declines in 2001-2002, the TIA’s “2003 Telecom Market Review & Forecast” said. It predicted the market would grow at a 10.3% compound average growth rate through 2006, encouraged by increases in wireless and support services. TIA said the underlying demand for telecom remained strong, as Internet traffic and the need at the enterprise level for high-speed data transmission continued to grow rapidly, and the demand for mobile connectivity for both voice and data was expanding. The report said spending on landline transport services was beginning to be cannibalized by wireless services. International spending on communications transport services is expected to reach $788 billion in 2003 (up 10.5% over 2002) accompanied by a 2.7% uptick in international spending on telecom equipment to $247 billion in 2003, TIA said. It said the Asia-Pacific market was the largest regional area outside N. America, with total telecom revenue expected to reach $421.6 billion this year from $380 billion in 2002. TIA predicted that market would increase at a 9.1% clip through 2006. The report said the Japanese market continued its modest gains and China and India were growing rapidly with mobile phones subscribership growth in both countries exceeding 80% in recent years. It said revenue in Western Europe, the 2nd largest regional telecom market outside N. America, was expected to reach $362 billion in 2003, up 5.8%. Despite the difficulties faced by many carriers resulting from the 3G spectrum auctions, European operators are beginning to plan their strategies for rolling out advanced wireless networks encouraged by the decision to allow wireless carriers to share infrastructure, TIA said. It also said broadband rollout was beginning to accelerate in Europe and was expected to reach 10% penetration in 2003. Unlike in N. America, the report said, DSL is the most popular broadband access technology there, surpassing cable modems and accounting for 60% of broadband connections. TIA Pres. Matthew Flanigan said broadband and wireless were “the big drivers for the international market for” this year. He said broadband deployment was approaching critical mass in 2003 in many countries, “putting the market on an accelerated growth curve.” He said 3G and unlicensed wireless networks also were taking off this year and had “the potential to be a driver for the entire global market.”
The FCC Wireless Bureau will audit the operating status of certain site-specific licenses at 220-222 MHz. The bureau said the point was “to promote intensive use of the radio spectrum by updating and increasing the accuracy of the Commission’s licensing database” for: (1) Nonnationwide 5- channel trunked systems. (2) Nonnationwide data. (3) Nonnationwide “other.” The bureau said the audit excluded geographic area licenses granted in the 220 MHz auctions or 220 MHz licenses authorized for public safety, mutual aid or emergency medical services. Every covered licensee must certify its station hasn’t discontinued operations for one year or more. The bureau has conducted a similar audit of private land mobile radio station operators to identify licenses no longer in use. That effort involved Part 90 licensees with authorized facilities below 512 MHz and sought similar information on station operating status. The object of the efforts has been to update the FCC’s database of those licenses and return of spectrum in cases of cancellation or notification that the licenses no longer were needed. The bureau said that for the 220 MHz audit it would send letters to all licensees operating in those covered services the week of May 12, outlining information such as call signs. A licensee will receive only one audit letter for all of its covered authorizations if it has verified its address listing in the FCC’s Universal Licensing System by May 9. The bureau stressed that responding to the letters was mandatory, with an electronic submission required within 30 days of the audit letter. “Failure to provide a timely response may result in the Commission presuming that the station has been nonoperational for more than one year, and thus the license may be presumed to have automatically cancelled,” the bureau said. Failure to respond in time also could result in enforcement action, including fines, the bureau said.
FCC Comr. Adelstein voiced support late Wed. for Congress’s giving the Commission the ability to impose spectrum user fees, which also have the backing of the Bush Administration’s latest budget request and the Spectrum Policy Task Force. “While we may not need to impose fees in all situations, the Commission should have the discretion to impose fees to promote efficiency, particularly for those services in which incumbents did not pay for their licenses,” he said at the U. of Colo. at Boulder, in his first major speech on spectrum since he joined the FCC 4 months ago. Adelstein addressed the university’s Silicon Flatirons Telecommunications Program, the same venue in which Chmn. Powell in Oct. had unveiled several spectrum policy shifts under consideration. He stressed the need to make spectrum available to rural areas, use smaller licensing areas in some cases and rethink build-out requirements.
The House Telecom Subcommittee Wed. approved an amended bill by Subcommittee Chairman Upton (R-Mich.) that would create a trust fund from auctioned spectrum to reimburse federal agencies that vacated spectrum. Upton told reporters after the markup that, based on the support of the Bush Administration, “I'm pretty encouraged by the prospects of this bill.” He said Commerce Committee members would rally together to ensure the bill’s passage, given likely opposition by appropriators. He said he had recently discussed the legislation with Senate Communications Subcommittee Chmn. Burns (R-Mont.) and was confident the Senate would act as well.
On the eve of a markup of spectrum relocation trust fund legislation, scheduled for today (Wed.) by the House Telecom Subcommittee, CTIA told Commerce Committee Chmn. Tauzin (R- La.) and ranking Democrat Dingell (Mich.) that it supported recent changes. At a March 25 hearing, Pentagon officials told the subcommittee they had some limited, technical concerns about HR-1320, including timetables in subcommittee Chmn. Upton’s (R-Mich.) bill that would be difficult to meet. The changes made since that hearing address congressional oversight issues -- how reviews are to be integrated into the process to ensure that DoD cost estimates for relocation from spectrum don’t go out of control while guaranteeing that federal users that move are fully reimbursed, an industry source said. The modifications also provide more opportunities for congressional oversight, as well as processes for submitting expenses for General Accounting Office review and subsequent reviews if costs exceed 110% of the govt.’s estimate. CTIA Senior Vp-Governmental Affairs Steven Berry told Tauzin and Dingell that the wireless industry supported the changes “because they remain true to the legislation’s central aim of providing a certain, predictable and accountable relocation process.” CTIA also urged Tauzin and Dingell to “oppose any amendment that would tip the careful balances struck in the legislation. While other ideas may have merit, it is unwise to place government reimbursement at risk.” Berry said Stephen Price, deputy asst. secy. of defense for spectrum, had called for a “trustworthy trust fund” at the March hearing. The measure is considered key to clearing Defense Dept. incumbents from spectrum earmarked for advanced wireless services. Last year, the Pentagon agreed to clear most of 1710-1755 MHz, which is part of 90 MHz being made available for advanced commercial wireless services, including 3G. Current law requires commercial entities to reimburse federal users for the costs of relocating from reallocated spectrum. The proposed spectrum relocation trust fund would change the system to a central relocation fund financed from auction receipts from the current system of direct payments from commercial entities to federal agencies. “The current process is a ‘black hole’ for both government agencies and the private sector -- filled with uncertainty, punctuated by unknown costs and bereft of predictability,” Berry wrote in the letter to Tauzin. “The current process works for no one.” Telecom Subcommittee ranking Democrat Markey (Mass.) at the hearing supported a bill he recently introduced that would create a spectrum commons and would set up trust fund provisions that would include a $5 billion cap and a separate fund for technology training for schools. Both Price and NTIA Dir. Nancy Victory expressed concerns about the Markey proposal, including the idea of a cap on the fund.