FCC Spectrum Policy Task Force released recommendations Fri., including legislative “blueprint” for working with Congress. Legislative proposals cover receiver standards, possible users fees and potential authorization for 2-sided auctions. Proposals include reassessing Orbit Act to consider permitting, but not requiring, FCC to use competitive bidding to resolve mutually exclusive applications for spectrum for international satellite services.
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.
Citing tough economic conditions, FCC granted relief to NextWave re-auction winners Thurs., allowing them to opt out of their Jan. 2001 bid obligations without penalties. Commission approved order unanimously, with Comr. Martin dissenting in part on requirement that carriers withdraw from entire auction to be relieved from any of payment obligations. Order appeared to not impose penalties on withdrawing carriers by waiving default rules and allowing bidders that exited auction to acquire that spectrum in future auctions.
If FCC doesn’t address broadband deployment in its pending proceeding, House could take up broadband legislation again in 108th Congress, aide to House Commerce Chmn. Tauzin (R-La.) told Cato Institute conference Thurs. “The FCC has the ability, the power and the legal authority” to deregulate broadband on its own, said Howard Waltzman, telecom aide to Tauzin. “What we do is contingent upon what the FCC does.”
Protection of universal service will be top priority for NTCA in next session of Congress, but bankruptcy and spectrum management also will be on its agenda. In news conference Wed., NTCA officials said Assn. would lobby for “fair and stable contribution methodology” for universal service fund (USF) and modifications of portability and identical support rules to prevent competitive carriers from claiming funds to detriment of local rural incumbents.
In next step toward carving out more 3G spectrum, FCC Thurs. approved spectrum allocation order and proposed service rules for 2 blocks of 45 MHz of contiguous spectrum. Allocation means 5 MHz of Multipoint Distribution Service (MDS) spectrum, which is itself connected to other proceedings, and incumbent point-to-point microwave licensees will have to relocate. FCC officials said order, which appeared to contain no surprises, didn’t make any decisions on potential relocation spectrum for MDS, but said it would be taken up in future proceeding.
FCC’s Spectrum Policy Task Force outlined to Commission Thurs. its recommendations for updating agency’s decades-old spectrum management regime, concluding access to spectrum was bigger problem than scarcity. Full report of 39 recommendations is expected to be released next week, with notice of inquiry planned for consideration at Dec. 11 FCC meeting.
Before FCC rules on proposed merger of AT&T Broadband and Comcast, it will decide whether pending motion by Media Access Project (MAP) to force Commission to examine Internet access agreement with AOL Time Warner has merit, Comr. Abernathy told reporters Mon. She said Commission was unlikely to release both orders together and that MAP’s motion would be dealt with first, probably in next few days. Tues. will mark Day 180 of merger review, which was Commission’s self-imposed target for deciding on deal. It appeared from her comments that Commission probably would miss that target, but Abernathy said she expected ruling on merger “soon… I would hope it could come out this week, but stay tuned.” She declined to discuss whether she or other commissioners already had voted or merger’s status. Sources have told us that staff of Media Bureau had recommended that commissioners approve merger (CD Oct 30 p2).
Sponsors of NextWave bill in Senate and Senate Commerce Committee Chmn. Hollings (D-S.C.) sent letter to FCC Chmn. Powell urging Commission to “immediately complete consideration” of agency’s proposal for opt-out provisions of NextWave auction. Letter urged complete release from auction, return of all deposits and freedom for companies that did opt-out to acquire spectrum in future. Sen. Kerry (D-Mass.), sponsor of S-2869 to allow auction opt-out, signed letter, along with principal co-sponsor Sen. Brownback (R- Kan.). Letter said potential $16 billion liability on companies was damaging wireless industry credit rating and was impeding carriers’ ability to take “interim steps, such as building out their networks further or leasing spectrum from others, that may be urgently needed to improve service for its customers.” It said there was no “sound policy sense” to hold carriers to liability when govt. couldn’t deliver spectrum. U.S. Supreme Court heard NextWave’s objections to FCC’s seizure of licenses after company failed to make payments (CD Oct 9 p1). In comments to FCC on opt- out plan, several carriers recommended that companies that did opt out should be forced to forgo participation in spectrum auctions for period of time (CD Oct 16 p1). Nextel recommended 3 years. Hollings isn’t listed as co-sponsor of legislation, but he has floated alternative language to bill that included longer time for companies to decide whether they want to opt out. Alaska Native Wireless urged FCC to provide 180-day period to allow opt out. Sen. Stevens (R- Alaska) said he had concerns about bill and Senate aides have told us he was seen as obstacle to passage. Senate aide told us bill wasn’t likely to pass with limited time left in Senate session. It has collected 59 co-sponsors. Senate returns Nov. 12, but length of lame-duck session hasn’t been announced. Senate aide also told us Sen. Biden (D-Del.) had placed hold on bill for reasons unrelated to issue. Biden also is listed as co-sponsor.
NTCA released survey results Thurs. that it said underscored increasing challenges rural wireless carriers faced in vying with large nationwide operators. NTCA cited factors such as dwindling access to capital of some operators in current economic downturn and difficulty they faced in competing with large rivals in current FCC auction system. Survey showed that 51% of respondents had no plans to participate in future auctions and many were turning to unlicensed spectrum to provide services, even though they faced congestion in those bands. Study said 71% of respondents complained it had become more difficult to obtain financing for wireless projects in last year. “Obtaining access to spectrum is a major problem for survey respondents,” NTCA Economist Rick Schadelbauer said at Thurs. briefing.
FCC Chmn. Powell told U. of Colo. at Boulder conference late Wed. that one of most “obvious” gaps in Commission’s current approach to wireless interference was lack of receiver standards. Rather than simply outlining need for more spectrum for both licensed and unlicensed technology, Powell stressed need for receiver standards, importance of underutilized or “white space” spectrum and focus on clear measures of what constituted acceptable interference.