Verizon Wireless CEO Denny Strigl told National Governors Assn. meeting in Boise, Ida., that to ease “crisis of confidence” in telecom sector, govt. should release NextWave re-auction winners from commitments to pay $16 billion. In March, Commission returned 85% of deposits from Jan. 2001 re-auction but concluded that winning bidders such as Verizon should continue to be held to nearly $16 billion in potential auction obligations until pending Supreme Court review of NextWave case played out. Last year, U.S. Appeals Court, D.C., reversed FCC decision to revoke bankrupt carrier’s licenses for missed payment, overturning re-auction results and provoking govt. appeal to U.S. Supreme Court. “It is bad enough that we have to remain on the hook to the government, to the tune of $16 billion, for spectrum that it cannot deliver,” Strigl said. “Worse, investment firms see our industry as having a $16 billion liability that is impacting their willingness to raise or loan capital.” Earlier this year, House Telecom Subcommittee Vice Chmn. Stearns (R-Fla.) introduced bill that would compel FCC to return remaining 15% of deposits to bidders in NextWave re- auction and allow each bidder to wipe out its license rights under NextWave re-auction to free it from remaining payment obligations. “When FCC Chairman Powell was appointed to the President’s Corporate Fraud Task Force last week, he confirmed how critical it is for government to act on the severe capital crisis straining the telecom industry,” Strigl said. Were Commission to remove $16 billion overhang of payment obligations over NextWave re-auction, he said, “if the FCC ever gets the spectrum back, it can re-auction it then.” Strigl also called for easing “burdensome” regulations at federal and state level. As example, he cited wireless local number portability mandate, for which Verizon Wireless has petitioned FCC for forbearance. Commission is to vote on that request at agenda meeting today (Tues.). Strigl said that mandate, which takes effect Nov. 24, was designed to make wireline carriers more competitive, he said, but “wireless is already fiercely competitive. And when the rule was written, I'd suggest no one gave thought to how it would work. Today, wireless customers can expect to get a working phone number in minutes. That expectation will increase to days with local number portability.” Strigl also cited recent Cal. PUC proposal for consumer protection rules that he said would cost Verizon Wireless “tens of millions of dollars a year in paperwork.” As example, he said proposal would require customers to physically sign for any changes in their service plan, meaning that simple alterations could take days instead of hours.
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.
Progress & Freedom Foundation lunch Fri. on Capitol Hill on wireless markets produced spirited exchange among panelists on timeline in which industry is seeking more spectrum. FCC Office of Engineering & Technology Chief Edmond Thomas said one question he had was “economic strength of the wireless business at this point in time to bid for spectrum. On one side we are arguing for more spectrum. But not too long ago the industry was saying ‘we don’t want 700 MHz, delay the auction.'” While both industry and govt. want additional spectrum made available in timely fashion, Thomas said argument was over what word “timely” meant in that context. “The question is what is timely and how much [spectrum] to make available for which services at which point in time,” he said. “If indeed you make spectrum available and it lies fallow, that’s a problem.” Citing lack of “viable” business plans in Europe and Asia for third- generation (3G) services, Thomas said: “3G to me is not an issue.” In Europe, for example, spectrum was made available solely for 3G without flexibility for carriers to offer services other than those proscribed by auction regulations. Steve Berry, CTIA senior vp-govt. affairs, said that regardless of discussion over whether industry needs 90 MHz or 120 MHz now for 3G, wireless sector also needs decision now “that you will make spectrum available in a very dependable and predictable fashion” so that Wall St. and others would have signal that industry has path to growth. “We have been waiting for 10 years for that to happen. We need a decision today that 90 to 120 [MHz] is made available,” Berry said. “Without a game plan,” carriers can’t invest billions of dollars needed to buy and develop spectrum for advanced wireless Internet services, he said. Brian Fontes, Cingular vp-federal relations, said that how much spectrum is needed has been well documented by global organizations, which have identified minimum of 160 MHz and “realistically” 200 MHz by 2010 in U.S. On 700-MHz issue, Kevin Krufky, legislative aide to Sen. Brownback (R-Kan.) noted that fact that spectrum-hungry wireless carriers didn’t apply to participate in 700-MHz auction that had been scheduled for earlier this summer “should say something.” He said: “The whole problem with that auction is that it had nothing to do with sound policy -- it was an appropriations- related issue.” NTIA Deputy Dir. Michael Gallagher agreed with some private sector speakers that govt. wants to see changes, including more focus on efficiency. “But I think also the industry has a tendency, as we have seen in the 700- MHz debate, to say, ‘well, not so fast there,'” he said. “If we did move a significant amount of spectrum right away, the industry would be among the first to come and say whoa, don’t go there, not so fast, because it means more competition and it means spectrum is going to be available in a way that we can’t quite control.”
Public safety groups and Motorola urged FCC to adopt channelization plan that could accommodate 802.11 technologies in part of 4.9 GHz recently allocated to public safety operations. But several commenters on proposal that would clear way for high-speed digital technologies for emergency communications in band differed on who should be eligible to use that spectrum beyond “traditional” public safety entities. Representing critical infrastructure providers such as utilities, United Telecom Council (UTC) said FCC should adopt eligibility definition that would include entities such as pipelines and railroads that coordinate with public safety during emergencies. However, Assn. of Public-Safety Communications Officials (APCO) backed narrower definition that would prevent fire, police and emergency medical entities from having to compete with others for that spectrum. One point of agreement across broad range of comments was that 50 MHz allocation in further notice approved by FCC in Feb. was important for homeland security, but still fell far short of spectrum needed for public safety operations.
One of major themes of new technology developers and equipment makers in comments this week sought by FCC’s Spectrum Policy Task Force has been need for more spectrum for unlicensed devices and bands for rapid testing of new technology. “Cisco believes that these ‘unlicensed’ networks have the potential to create an entirely new broadband network for all Americans,” company said. It urged FCC to allocate spectrum specifically for unlicensed data networks and called for “spectrum etiquette rules” to mitigate interference and allow for more efficient use of those bands. Among task force questions concerning Part 15 was whether types of permissible unlicensed operations should be expanded, what rule changes would be needed to accomplish that and how to put that spectrum to its highest valued use as congestion of those bands increases. FCC Chmn. Powell created the task force earlier this year to explore far- reaching spectrum policy issues, ranging from Part 15 overcrowding to whether spectrum in rural areas should be regulated differently from that in urban markets.
When granting additional flexibility for spectrum use, several wireless carriers and equipment makers urged FCC this week not to change rules in “midstream” for incumbent licensees that already had paid billions for licenses. Wireless and satellite companies, new technology developers, broadcasters and public interest groups filed close to 200 comments on questions from agency’s Spectrum Policy Task Force. Relatively high number of comments poured into Commission despite Office of Engineering & Technology’s refusal of several requests to provide extension of July 8 deadline. Public notice last month raised policy questions ranging from potential need to redefine harmful interference to whether rural spectrum should be covered under policy different from urban areas (CD June 7 p1). Some developers of emerging technologies stressed need for FCC to provide clarity in its Part 15 rules for unlicensed devices and to furnish more spectrum as demands increased. Several large carriers, including Sprint and Cingular, urged FCC to keep intact auctions of exclusive allocations and said market- based tools such as auctions worked only if license-holders had clearly defined rights.
Lt. Gen. Harry Raduege, Defense Information Systems Agency (DISA) dir., told Washington forum Mon. that military users were trying to move into higher spectrum where possible but were finding “more and more mobility that we are needing spectrum for” in much-coveted spectrum below 3 GHz. Raduege spoke at meeting of Center for Strategic & International Studies (CSIS) Commission on Spectrum Management, chaired by former Defense Secy. James Schlesinger and former Motorola Chmn. Robert Galvin. At time when NTIA is nearing completion of 3G viability assessment, which already has missed self- imposed deadline of June 30, defense speakers at meeting sent message of being willing to move when reimbursement and relocation were possible, but citing satellite spectrum as still particularly challenging for 3G.
Spectrum Holdings, one of largest bidders for upcoming lower 700 MHz band auction, petitioned FCC for reconsideration of decision to let bidders select licenses to pursue other than those identified in their original short- form applications. FCC Wireless Bureau plans to hold auction for C- and D-blocks of lower 700 MHz spectrum next month. Date was rescheduled after Congress delayed planned Jan. 14 start for upper 700 MHz auction and June 19 for all of lower band, including larger A, B and E-block licenses. Legislation instead postponed all of 700 MHz auctions except for smaller C- and D-block licenses on Aug. 27.
Terrestrial carriers’ comments on integrated MSS-ATC systems were “riddled with factual and legal errors and distortions”, Globalstar said in ex parte filing. Globalstar said separate filings by AT&T wireless on April 1 and joint filing by Cingular Wireless and Sprint on proposed integration of ATC-MSS systems in 2 GHz band, L-band and 1.6- 2.4 GHz band needed to be corrected. Globalstar supports ICO proposal for flexible use by ATC and MSS licensees in all available MSS bands (CD June 17 p6). Wireless opponents have accused ICO of shrewd spectrum grab (CD May 31 p3) and asked that Commission auction spectrum sought by company. Satellite official said issue could be decided within 60 days.
Both Dennis Johnson, pres. of ground-penetrating radar (GPR) developer Geophysical Survey Systems, and FCC official defended that ultra-wideband technology as not having caused interference problems in past. At Precursor Group panel discussion here late Wed., Michael Marcus, assoc. chief of FCC’s Office of Engineering & Technology, said that during UWB rulemaking, “virtually nobody was worried about GPR except for the FAA… GPRs have been around forever and haven’t caused problems to anybody forever.” Marcus said many GPR devices had GPS systems mounted on same box but hadn’t caused reported interference to GPS operations. “I'm not convinced FAA has done the technical analysis correctly,” he said. Johnson said: “We've been in business for 32 years and the FCC has never recorded a single incident of GPR interfering with another receiver. Our equipment is operated at virtually every airport in the country and on most military bases.” GPR manufacturers and service providers filed petitions at FCC recently seeking reconsideration of portions of UWB rules they contended were too restrictive to allow their systems to continue operating for most applications. Ground Penetrating Radar Industry Coalition (GPRIC) filed petition for limited stay of enforcement of UWB rules, contending that changes were adopted in contravention of Administrative Procedure Act. Earlier this week, U.S. GPS Industry Council filed opposition to petition at FCC, saying stay request should be rejected even if Commission was procedurally obligated to issue further notice before adopting some provisions of final rules. “Because no FCC rules authorizing ground penetrating radars are currently in effect, a stay in the effectiveness of the new rules about which GPRIC complains would have the consequence of removing any basis for lawful operation of GPRs, leaving GPRIC’s members in a worse position than they would have be with the new rules in effect,” opposition filing said. Marcus also countered some descriptions of UWB as potential last-mile, broadband solution and technology for similar longer range advanced wireless services. Because FCC order earlier this year on UWB used very conservative power limits, “ultra- wideband isn’t going to be used for any of these things,” he said. Manufacturers instead are talking about short-range transmission ranges of 10 m and initial data ranges of 100 Mbps, he said. Marcus also addressed concerns raised by some licensees that FCC had no right to authorize technologies such as UWB in bands for which they have paid at auction. “People who have that point of view might want to read” Part 15 rule that Commission issued in 1989, he said. “Up until that point, every class of unlicensed device had very specific bands in which they were allowed to operate,” Marcus said. Decision in 1989 said that besides those rules, “in most parts of the spectrum but not all,” unlicensed devices would have freedom to operate as they wished as long as they met certain power and interference requirements, he said. Officials of UWB developers XtremeSpectrum and Time Domain said first commercial markets for that technology would involve high bandwidth, personal area networks. Those operations will connect consumer electronic devices in the home and office “at very high data rates,” said Jeff Ross, vp-corporate development & strategy for Time Domain. He and Veronica Haggart of XtremeSpectrum emphasized that UWB was likely to complement rather than compete with Bluetooth and 802.11 systems. “We believe that ultra-wideband fills in the gaps,” Ross said. Bluetooth offers low data rates at ranges of 10 m and 802.11 offers higher data rates. “What’s unserved today is the market for multimedia,” he said. At very low power levels, UWB will offer 100 Mbps at 10 m with ability to scale up to 400 Mbps, he said.
FCC Wireless Bureau will hold auction for C- and D- blocks of lower 700 MHz spectrum on Aug. 27, bureau announced Wed. While other blocks of lower band of 700 MHz spectrum auction were ordered delayed last week by Congress through Auction Reform Act, bill ordered C- and D-blocks auctions be conducted between Aug. 19 and Sept. 19.