Speaking at an OPASTCO conference in Washington Wed., FCC Comr. Adelstein cautioned state regulators to take “great care” in how they determined whether a competitor was eligible for universal service support. In fact, he said, PUCs ought to take “greater care than some have done in the recent past” because universal service funds were becoming scarce.
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.
Wireless Communications Assn. (WCA) petitioned FCC for reconsideration of order that reallocated spectrum for 3G and other advanced wireless services, including part of 2150-2162 MHz now occupied by Multipoint Distribution Service (MDS) licensees. WCA said order would displace MDS operators without earmarking comparable replacement spectrum and without providing assurance relocation costs would be fully reimbursed. Group said decision is arbitrary and capricious, “evisceration of the rights” MDS licensees bought at auction and “a breach of faith with MDS licensees who have made every effort to cooperate with the Commission in this matter for over 2 years.” WCA petition said order “reaffirms the maxim that no good deed goes unpunished.” WCA and MDS spectrum holders have provided details addressing issues such as availability of comparable replacement spectrum and replacement costs while carriers who seek to displace MDS from band “have offered virtually nothing,” petition said. Order reallocated 2150-2155 MHz to advanced wireless services, which effectively displaced MDS from entire 2150- 2162 MHz band, WCA said. But petition said order deferred considering MDS relocation until future notice of proposed rulemaking, “without indicating how or when those issues might be resolved.” WCA called this “cart before the horse” decision-making that provides no foundation for MDS relocation. In other areas, WCA raised concerns about what it said was lack of explanation about how FCC’s “repossession” of MDS spectrum would square with its auction policy. “It should be obvious that repossession of previously auctioned spectrum without the quid pro quo of comparable replacement spectrum and full reimbursement of relocation costs threatens the integrity of the Commission’s entire auction process,” WCA petition said. Citing “property interests” of incumbent licensees, FCC decision also implicates 5th Amendment’s prohibition against takings of property without just compensation, WCA argued. Among issues raised by petition was that if FCC ultimately decides that no replacement spectrum is available or that it can’t reimburse dislocated MDS licensees, it will have to reverse 2150-2155 MHz reallocation decision, throwing broader 3G spectrum plan into uncertainty.
Critics of 800 MHz rebanding proposal crafted by Nextel and public safety and private wireless groups told FCC this week that Nextel’s pledge of $850 million to help relocate displaced incumbents wasn’t likely to be enough. Comments were due Mon. on revised 800 MHz reconfiguration blueprint designed to help mitigate interference to public safety operators. Wireless carriers, some private wireless operators and others stepped up criticism of revamped joint plan submitted late last year to Commission. But Nextel defended plan, saying $850 million commitment was enough to “fund all reasonable relocation costs.”
Thomas Sugrue, who departed last week as longest-running chief of FCC Wireless Bureau, said that during his tenure he had seen debate shift on Enhanced 911 and had come to new appreciation of potential need for receiver performance standards. His successor, John Muleta, joined FCC Mon. Sugrue told Communications Daily he took “satisfaction” in tremendous growth in wireless services and technologies since he became chief in Dec. 1998. “It has changed the communications landscape in the U.S.,” he said, noting he didn’t take credit for rise: “That reminds me of a rooster taking credit for the sunrise.”
FCC should do more to promote access to wireless services by rural customers, Comr. Adelstein told NTCA annual meeting in Phoenix Mon. He also stressed need for continued support from universal service for network build-outs “at levels that are specific, predictable and sufficient.” As for wireless, Adelstein said universal service shouldn’t be used to support “artificial competition from providers that don’t provide the same or better service than what consumers already receive.” He also urged changes in FCC policies that he said didn’t make sense in that area, such as allowing small carriers to get discounts in buying spectrum at auction. “This is a great idea,” Adelstein said, “but the current rule actually attributes the outside business activities of co-op board members in determining the co-ops’ eligibility for bidding credits.” Citing challenge against that pending at FCC, he said he was “taking a good hard look at this… Unfortunately, this is an example of how the FCC doesn’t always understand how co-ops in rural America work. I plan to use the full power of my office to make sure we get this rule fixed as soon as possible.” Reflecting concerns on license area size that rural carriers had raised at FCC, Adelstein said he also was concerned that large wireless license areas raised auction prices so high that rural telcos “can’t even afford to make a first bid.” In future auctions, Adelstein said he would support use of smaller wireless license areas that would better reflect rural customer bases. “In addition, we need to revisit the FCC’s build-out rules. I'm concerned that the current rules can indirectly undercut the ability of rural carriers to get access to spectrum in their own neighborhoods,” he said. On universal service front, he said that although it didn’t directly support advanced services, it was key tool that laid groundwork for creating future broadband networks. “The 2 foundational pillars of the [Telecom] Act are universal service and competition,” he said. “Federal support is intended to promote universal service, not to subsidize artificial competition -- or, for that matter, to keep it at bay.” Neither of those “pillars” should be promoted at expense of other, he said. State PUCs have key role in determining if competitor is eligible for universal service support, he said. “Specifically, states must make sure that the new market entrants receiving universal service meet all the obligations required by the Act. These include providing service throughout the service area and advertising its availability.”
Eldorado Communications last week withdrew its application for review of FCC Wireless Bureau decisions that dismissed obligations of NextWave re-auction winners. Wireless carriers, including Verizon Wireless, had opposed Eldorado’s challenge. Eldorado had asked for reversal of bureau decision that granted NextWave re-auction winners relief on their bid obligations pending conclusion of litigation on those PCS licensees. Eldorado competed with NextWave in original C-block auction, later filing for Chapter 11 bankruptcy and returned spectrum to govt. Eldorado told FCC that Supreme Court’s decision last week in NextWave case made moot its challenges to applications of re- auction winners for any of those licenses. Court sided with NextWave in upholding U.S. Appeals Court, D.C., ruling that reversed Commission decision to cancel NextWave’s licenses for nonpayment.
Mobile satellite service (MSS) providers will have option to use ancillary terrestrial component (ATC) to supplement their satellite services under certain conditions, FCC said Thurs. Text of order wasn’t available by our deadline, but news release outlined key points, which included 8 different gating criteria and covered interference concerns for 2-GHz and L-band. Commission also adopted rulemaking on Big Leo band to address additional spectrum issues. As part of 5 interlocking items released Thurs., Commission reallocated 30 MHz from MSS band at 2 GHz for 3G wireless. CTIA still called actions “split decision for consumers,” saying it was likely to challenge ATC order.
T-Mobile USA, citing “unique” circumstances of NextWave re-auction, asked FCC last week for refund of penalty it paid for one bid withdrawal. T-Mobile, which bid in Jan. 2001 re- auction of NextWave spectrum through subsidiary, had withdrawn bid for one C-block license in Richmond, Va. Salmon PCS, which had financial backing from Cingular Wireless, ultimately was winning bidder for that license in bid that was less than T-Mobile’s withdrawal bid. T-Mobile told FCC in Fri. filing that it paid $4.6 million withdrawal penalty. In petition for declaratory ruling, T-Mobile said it wanted FCC to rule that broad language and public policy underpinnings of recent NextWave refund order “compel the refund of the penalty.” U.S. Supreme Court upheld U.S. Appeals Court, D.C., ruling that overturned FCC decision to cancel NextWave’s licenses for missed payment (CD Jan 28 p1). That D.C. Circuit ruling had thrown results of Jan. 2001 re- auction of those PCS licenses into disarray. Before Supreme Court decision, FCC last fall had issued order that outlined ways re-auction bidders could exit from auction amid continued legal uncertainty. That final refund order “provided complete monetary relief to applicants withdrawing their applications by refunding all monies on deposit and not assessing any default payments,” T-Mobile told FCC. “It would be illogical, inconsistent and inequitable to deny this same complete monetary relief to T-Mobile in the context of its bid withdrawal, and substantial societal costs would flow from continued retention of T-Mobile’s funds,” carrier said. It also argued FCC authority under its rules to impose final penalty was “erased” when Salmon withdrew its winning bid. “Similarly, because the occurrence of a future auction of the Richmond license is uncertain, the Commission’s rules do not authorize the imposition of any interim penalty,” T-Mobile said. All 22 winning bidders in NextWave re-auction had opted to have their pending applications for licenses dismissed. That meant auction was voided and “cannot be resurrected for the sole purpose of assessing some final penalty against T-Mobile in the event that a future auction of the Richmond license does occur.” Penalties for withdrawal in such cases are assessed only during course of auction when withdrawn bid for particular license is more than the winning bid. “There is no more basis to assess any interim penalty against T-Mobile than there is against the other bidders that withdrew bids for licenses that were ultimately the subject of withdrawn winning bids -- and imposition of any interim penalty against those other bidders would be absurd,” T-Mobile said.
Wireless carriers raised concerns to FCC late Mon. that “interference temperature” touted by agency’s Spectrum Policy Task Force report wasn’t yet backed up by real-world information, such as noise floor data. Responding to task force recommendation, several commenters cautioned Commission against basing spectrum allocation and policy decisions on technology advancements that hadn’t yet materialized. Among common themes that emerged in comments this week was need for more unlicensed spectrum, requirement for additional public safety bands, concern over auctioning of satellite spectrum.
In ruling that could mark end of protracted NextWave litigation, U.S. Supreme Court Mon. upheld lower court decision that reversed FCC on cancellation of carrier’s licenses. Court ruled 8-1, with dissent by Justice Stephen Breyer, that Bankruptcy Code barred FCC from revoking licenses held by bankrupt debtor for failing to make timely payment. Writing for majority, Justice Antonin Scalia said that reading of bankruptcy law didn’t conflict with Communications Act, which he said didn’t require FCC to cancel licenses as penalty for missed payment. “What the petitioners describe as a conflict boils down to nothing more than a policy preference on the FCC’s part,” he wrote.