FCC late Fri. reallocated for “new flexible services” 27 MHz of spectrum transferred from federal govt. Spectrum included several small blocks transferred under Omnibus Budget Reconciliation Act of 1993 and Balanced Budget Act of 1997. Spectrum is in 216-220, 1390-1395, 1427-1429, 1429- 1432, 1432-1435, 1670-1675 and 2385-2390 MHz bands transferred to nongovt. uses. Agency said new allocations would permit “new and innovative wireless technologies” while at same time preserving primary status of Wireless Medical Telemetry Services and elevating to primary status Low Power Radio Services in 216-217 MHz band, which include auditory assistance and law enforcement applications. Agency said notice of proposed rulemaking would be released soon that would propose service rules for reallocated frequency bands, some of which must be licensed through auction by Sept. 2002.
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.
Congressional inaction on NextWave legislation last week came as other wireless carriers in similar or related straits await final word on fate of their own licenses. Congress left town Thurs. for holiday break without voting on $16 billion settlement legislation, meaning Dec. 31 deadline for Capitol Hill approval of deal’s terms was expected to pass without action. Without blessing by lawmakers by that date, parties to settlement -- which include Justice Dept., FCC, NextWave, Verizon Wireless and others -- may walk away from deal. Some industry observers said negotiators who negotiated deal still might be able to stay together for short time early in 2002 to continue advocating for settlement on Hill, although prospects for that scenario were unclear at week’s end. Attention also is starting to refocus on continued court action, specifically petition for certiorari that FCC filed at U.S. Supreme Court in Oct. seeking review of U.S. Appeals Court, D.C., ruling that overturned agency’s cancellation of NextWave licenses for missed payment. That came as several other carriers still were awaiting resolution of NextWave-related litigation to gain certainty about fate of their own licenses.
Congress headed toward Christmas break late Thurs. without passing implementing legislation for $16 billion NextWave settlement agreement worked out by Jan. re-auction winners, NextWave and U.S. govt. Both NextWave and Verizon Wireless acknowledged defeat on Capitol Hill on meeting settlement’s deadline for passage of legislation by Dec. 31, although what happens next is less clear. NextWave said “consumers will be best served by ending pending litigation and putting NextWave’s licenses into productive use as quickly as possible.” Company said it had continued to construct its wireless network during settlement proceedings “and we will be in a position to start providing service to the public in the new year.” Verizon Wireless CEO Denny Strigl said settlement, “which resolved the legal disputes surrounding the NextWave licenses,” expires Dec. 31 in absence of Hill action and agreement “could be implemented only with the endorsement of the Congress.” He said company appreciated work of Congress on issue and regretted that Congress couldn’t provide endorsement. “America’s wireless consumers will be denied the benefits the prompt use of the spectrum would have afforded them,” he said. Strigl didn’t indicate where company would go next on licenses. Under agreement, participants can walk away from settlement, and several industry observers turned attention to whether coalition of re-auction winners and govt. negotiators was likely to continue pressing for settlement in early part of next year. Fate of NextWave legislation became clearer early Thurs. when House Speaker Hastert (R-Ill.) told reporters that provisions implementing settlement weren’t part of measures that would be considered on basis of suspension of rules. “I think it’s probably dead,” Hastert reportedly said. “If it’s a good deal today, it will probably be a good deal next week.”
House Majority Leader Armey (R-Tex.) said Tues. he expected to introduce legislation this week to codify settlement proposed by govt. and bankrupt carrier NextWave. Proposal, which received mixed reaction from members in recent hearings (CD Dec 12 p1), would require NextWave to return wireless licenses to govt. in exchange for nearly $6 billion, measure that also would put $10 billion in U.S. Treasury from spectrum re-auctioned earlier this year. Staffer said Armey was considering introducing legislation either as standalone bill or attached to another bill. Proposal would require congressional action by year-end, but House supporters and opponents have said that was unlikely, and Senate Commerce Committee Chmn. Hollings (D-S.C.) and ranking Republican McCain (Ariz.) jointly have expressed opposition (CD Dec 7 p1) while making clear that they wouldn’t hold hearings on issue until next year.
House Commerce Committee Chm. Tauzin (R-La.) is co- sponsoring standalone bill that contains language for implementing NextWave settlement agreement. Bill, filed Wed. afternoon, also is co-sponsored by Reps. Conyers (D-Mich.), Sensenbrenner (R-Wis.), Thomas (R-Cal.). “It is consistent with [FCC] Chairman Powell’s recommended settlement,” said Tauzin spokesman Ken Johnson. Legislation, which wasn’t available by our deadline, is expected to include virtually all of settlement’s provisions. One caveat is that language remain intact as part of implementing legislation or deal could be renegotiated. However, several sources have indicated that if only minor changes are made, that isn’t likely to happen. Bill is standalone proposal that’s expected to reach House floor as early as today (Fri.). Speculation earlier Thurs. had been that language could be tacked onto economic stimulus bill, which also is heading to House floor. Prospects are less clear in Senate, where Commerce Committee’s ranking Republican McCain (Ariz.) and Chmn. Hollings (D-S.C.) have raised concerns about timing of deal’s needing to be approved by Congress by year-end and other issues. Standalone bill in House comes within days of joint hearings by Judiciary and Commerce subcommittees at which some members raised concerns, although Tauzin said he expected it to be passed this year. Settlement, if finalized, would provide $6 billion to NextWave for relinquishing licenses and $10 billion to U.S. Treasury, to be paid by winners of FCC’s Jan. re-auction of C-block licenses, such as Verizon Wireless. Johnson said there still were several options for how NextWave legislation could move in House now that bill had been introduced. One was that it could be attached to “must-move” legislation, he said. Legislation, “Prompt Utilization of Wireless Spectrum Act,” said it “authorizes and approves” decision by FCC and Justice Dept. to settle NextWave case. Bill would appropriate $9.5 billion to carry out settlement and contains provisions to ensure that govt. would receive its payment before NextWave. After final settlement approval, bill says NextWave would “completely relinquish” all claims to licenses and covered spectrum. It also would provide for expedited judicial review of challenges to settlement agreement and other issues.
FCC at its agenda meeting Wed. unanimously adopted allocation and service rules for 48 MHz of spectrum in lower 700 MHz band now occupied by Ch. 52-59 TV broadcasters. Order paves way for introducing new fixed and mobile wireless operations in band as well as new broadcasting services, Commission said. Order, which covers spectrum that Congress required to be auctioned by Sept. 30, 2002, reallocates that part of band to fixed and mobile services and keeps existing broadcast allocation for new and incumbent services during transition to DTV. Spectrum being reallocated is subject to same digital TV transition target of 2006 as upper channels in 700 MHz. But because lower channels don’t have additional public safety allocation like Ch. 60-69, Commission said it wasn’t putting in place same presumptive guidelines used to expedite clearing in upper bands. Order doesn’t contain specific band-clearing rules, instead providing that regulatory requests for voluntary band clearing be considered on “case-by-case basis.”
House Telecom Subcommittee Chmn. Upton (R-Mich.) blasted negotiators of proposed NextWave settlement for asking Congress “to clean up a judicial train wreck.” Proposed deal would require bankrupt NextWave to return wireless C- and F- block licenses in exchange for nearly $6 billion after taxes, while govt. would gain $10 billion (CD Nov 19 p1) from spectrum that was re-auctioned earlier this year. Although Upton agreed with supporters of settlement that “taxpayers have been starved of proceeds” from auctions, he said he was “not happy that NextWave gets $6 billion from this.” He said he planned to introduce legislation to prevent future conflicts between spectrum policy and bankruptcy laws, although he didn’t disclose details. In meantime, he said, he not only hopes Supreme Court will review the case but will overturn D.C. Circuit decision that ruled for NextWave.
Ranking House Commerce Committee Democrat Dingell (Mich.) and Rep. Markey (D-Mass.) asked FCC for more details on proposed NextWave settlement, which will be focus of House Telecom Subcommittee hearing today (Tues.) Dingell and Markey, who is ranking subcommittee member, asked Commission to furnish details by 6 p.m. Mon. on settlement reached among U.S., Jan. re-auction winners in C-block auction and NextWave. In letter written Fri. to FCC Chmn. Powell, Dingell and Markey said settlement and implementing legislation would “have profound implications for the American taxpayer and for future telecommunications and spectrum management policy.” They said they were seeking more information as part of settlement parties’ request for “expedited consideration” of implementing legislation. Key caveat of NextWave settlement, which would provide $10 billion to U.S. Treasury, is that implementing legislation be passed by Dec. 31. Among 18 questions that Markey and Dingell posed to FCC were: (1) How much money NextWave would receive from settlement before and after federal taxes. (2) Which rules FCC would need to waive to put settlement agreement into effect. (3) What steps FCC has taken on petition filed over summer by Alaska Native Wireless, Verizon and VoiceStream, which sought probe of eligibility of NextWave to hold C- and F-block licenses. (4) Whether FCC was satisfied that NextWave now was qualified licensee under designated entity and foreign ownership rules at FCC. (5) Whether FCC had evaluated NextWave’s financial structure submitted to U.S. Bankruptcy Court, White Plains, N.Y., in Aug. (6) Whether Commission had examined how proceeds of settlement that NextWave would receive would be distributed between its control group and noncontrol group investors. Dingell and Markey noted that Powell had described settlement as resolution that would maximize public interest. “We, too, support a public interest resolution to this matter and are curious as to what public interest conditions the Commission sought to obtain in the settlement agreement with the parties,” letter said. It asked whether settlement would impose conditions on carriers that would receive NextWave licenses, such as whether they would expedite deployment of Enhanced 911 technology. Senate Commerce Committee Chmn. Hollings (D-S.C.) released “Dear Colleague letter Mon. expressing his opposition to the proposed resolution of NextWave spectrum auction case. Hollings described arrangement as “private, back-room settlement [that] is fundamentally at odds with telecommunications and has been presented to us at the eleventh hour.” He urged members not to “legislate a scam,” which he said would happen if Congress acted hastily on matter: “There is no reason for Congress to legislate this settlement. Congress doesn’t legislate FCC decisions. Regardless, since the 2nd Circuit Court found for the FCC and the D.C. Circuit found for NextWave, why should we legislate the wrong result?” Meanwhile, House Telecom Subcommittee released witness list for Tues. NextWave hearing, 3 p.m., Rm. 2123, Rayburn Bldg.,: FCC Chmn. Michael Powell, Verizon Wireless CEO Denny Strigl, NextWave Gen. Counsel Frank Cassou, Urban Communicators Corp. Secy. James Winston.
Two House Judiciary subcommittee panels expressed doubt Congress could move NextWave legislation by year-end, as required by recent settlement on bankrupt company’s return of wireless licenses to the govt. Senate Commerce Committee leaders went step further, declaring that panel won’t touch NextWave case until next year. NextWave has agreed (CD Nov 19 p1) to surrender its C- and F-block licenses for $5.85 billion after taxes, while govt. will get $10 billion from spectrum re-auctioned in Jan.
Correction: Quote attributed to FCC Comr. Copps (CD Dec 6 p2) should have been attributed to Dan Meyer, Public Employees for Environmental Responsibility Gen. Counsel. Meyer said potential cumulative environmental risk of wireless towers was that “actual spectrum auction will have to be reviewed.”