FCC Wed. turned back petition for rulemaking filed by Public Employees for Environmental Responsibility (PEER) that had sparked strong opposition from wireless, wireline and undersea cable operators. Commission unanimously adopted order, although Comr. Copps issued separate statement saying PEER had raised “important questions” about how FCC carried out environmental duties mandated by Congress. PEER had asked FCC to change how environmental rules were applied to undersea cables, fiber lines, wireless towers. Group of govt. employees concerned about environment wanted agency to conduct rulemaking to ascertain whether it needed to create Office of Environmental Compliance and separate joint rulemaking with other agencies. Companies ranging from Verizon to Global Crossing had balked at PEER petition, telling FCC such action wasn’t needed and unjustifiably would add to regulatory burdens. Commission rejected PEER arguments that due to explosive growth in wireless and wireline infrastructure since Telecom Act, agency should take fresh look at cumulative impacts of spectrum auctions, tower registrations, undersea cable landing licenses, Sec. 214 authorizations. PEER doesn’t offer “rationale for treating all actions as actually or potentially damaging to the environment,” FCC said. “We do not believe that the evidence of environmental harm proffered by PEER reflects any environmental processing failings by the Commission.” Even if PEER successfully pointed to such shortfalls, “a few examples in no way justify the complete overhaul of the Commission’s long-standing environmental rules across all service areas,” it said. PEER had challenged FCC environmental rules that implemented National Environmental Policy Act (NEPA), which required federal agencies to account for environmental impact of projects they oversaw. PEER had urged FCC to require applications for all Commission actions involving submarine cables, fiber lines and spectrum requiring communications towers to file environmental assessment for public utility facility. Private utility would have to file environmental impact statement. PEER defined public utilities as supplying last-mile connections while private utilities would be parts of network needed to transmit over long distances. FCC said its regulations implementing NEPA already identified 9 types of actions that could have significant environmental impact and evaluate through environmental assessment all actions that involved projects that fit into those categories. In its May 2000 petition, PEER had cited growing number of cases in which laying of fiber cable had damaged coral beds and harmed habitat of endangered marine species. PEER said that in other cases, buildings and towers could have significant effect on environment and historic areas. Copps said that “while this proceeding did not provide adequate record evidence for a restructuring of our policies at this time, the Commission should undertake a thorough review of our obligations under the National Environmental Policy Act and the National Historic Preservation Act.” He said that as part of Chmn. Powell’s recently launched review of FCC procedures, assessment of agency’s responsibilities under NEPA and National Historic Preservation Act should be included. Copps said FCC should: (1) Determine whether it had devoted enough resources to meet its environmental responsibilities under those laws. (2) Examine how accessible such proceedings were to “nontraditional stakeholders” such as small businesses. PEER Gen. Counsel Daniel Meyer told us group planned to file petition for reconsideration at FCC by early Jan. “I do take Commissioner Copps’s separate statement as an indication the Commission knows it’s not addressing environmental concerns from environmentalists in an appropriate manner,” Meyer said. He said one example of types of cumulative environmental impacts that FCC must consider involved wireless towers that hadn’t complied with Sec. 106 review under National Historic Preservation Act. Assessing cumulative impacts of towers, Copps said, “the danger is the actual spectrum auction will have to be environmentally reviewed. That would be a nightmare for industry.” Lack of uniformity in compliance and enforcement means that most of industry has been erecting towers without environmental review, he said.
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.
Legislation implementing NextWave settlement agreement has 100% chance of passing Congress by year-end, Verizon Senior Vp-Deputy Gen. Counsel John Thorne told American Enterprise Institute (AEI)-Brookings Joint Center panel Fri. In occasionally heated discussion about what went wrong with FCC’s PCS policies and policy implications of NextWave accord, Thorne defended decision by govt. agencies and carriers to settle rather than continue to litigate. “We looked at alternatives to settlement,” he said. “I actually think we might have won in the Supreme Court,” he said, referring to petition for certiorari filed by FCC seeking review of U.S. Appeals Court, D.C., decision this summer that overturned Commission’s decision to cancel NextWave’s PCS licenses for nonpayment. Even if high court ultimately sided with FCC, lower court hadn’t addressed all outstanding NextWave issues and legal proceedings to wrap those up could take 2 or 3 years until licenses were free, he said.
FCC should end industrial policy that favors satellites and begin to regulate all similar services seeking to use same spectrum from same rulebook, Northpoint CEO Sophia Collier wrote in Wed. letter to Chmn. Powell. Collier said single rulebook system would simplify proceedings: “It would allow the Commission to stop being in the business of picking a winner and start to license companies in a technology- neutral manner.” She said ending that regulatory disparity was particularly important given reduced competitive environment that would result if EchoStar-DirecTV merger were approved. In DBS-Northpoint debate, she said, “preference given to the satellite industry has resulted in extraordinary market distortion.” Northpoint said it applied for license on same day as 8 satellite companies that sought 25,400 MHz of spectrum and would receive licenses without auction. Collier said FCC granted 10,259 wireless licenses in 2001 for mobile and fixed microwave services without auction. Process of spectrum allocation seems arbitrary and discriminates against small companies and new technologies, Collier said: “It cannot be considered desirable for the government to allow one company free use of a federal resource and then expect a new entrant and future competitor to pay to use the same resources.”
Justice Dept., ending what FCC Chmn. Powell called “a long and tortuous event,” signed settlement agreement Tues. on NextWave’s disputed PCS licenses. Final govt. signatures were affixed to settlement after Justice ratified agreement, which was unveiled earlier this month (CD Nov. 19 p3). Under settlement, which still faces ratification by Congress, U.S. govt. will receive $10 billion and NextWave will receive $5.85 billion after taxes. Company relinquishes its claim to licenses, which then can go to winners of FCC’s re-auction last Jan., including Verizon Wireless, Alaska Native Wireless, which has financial backing of AT&T Wireless, and Salmon PCS, which has financing from Cingular Wireless. In statement late Tues., Powell said that “regrettably,” U.S. Appeals Court, D.C., last summer had reversed FCC decision to cancel NextWave’s licenses for nonpayment, clearing the way for company to repay $4.7 billion owed to govt. for licenses. “This settlement offered a better alternative,” Powell said. “It reclaims the licenses and puts them in the hands of companies that can put them to use quickly for consumers.” Rather than nearly $5 billion that U.S. would have collected under D.C. Circuit ruling, “the American people will receive $10 billion,” he said. Noting that settlement required implementing legislation, Powell said he hoped Congress “turns to the matter promptly in order to put this matter behind us and to ensure a resolution that maximizes the public interest.” He said it would have been “preferable” to have carried results of reauction to completion and have kept nearly $16 billion in bids intact: “That option was extinguished by the court and I believe this settlement is the best outcome under the circumstances.” Justice Dept. said settlement also must be approved by U.S. Bankruptcy Court, White Plains, N.Y., which has been overseeing NextWave’s reorganization plan. DoJ said: “The settlement agreement ends years of litigation concerning the right to use wireless spectrum covered by the licenses previously issued to NextWave and it also avoids the prospect of years of additional litigation during which the wireless spectrum covered by the licenses could not be put to public use.” Agreement itself can’t be implemented until implementing legislation is in place and bankruptcy court provides approval, DoJ said. “In the meantime, the government’s petition for a writ of certiorari is pending before the Supreme Court,” it said.
As part of proposed spectrum swap with public safety users, Nextel asked FCC to put rule changes in place in next 6 months, including assigning 10 MHz of mobile satellite spectrum to carrier. In White Paper submitted to FCC last week and made public Tues., Nextel cited critical spectrum needs that public safety community faced following Sept. 11 terrorist attacks. Public safety community, in turn, offered support, contingent on funds’ being provided to cover all implementation costs that such licensees would face. Nextel has pledged to provide up to $500 million for equipment retuning and other transition expenses. “The Nextel proposal is a major step in the right direction,” said Nov. 21 letter to FCC Chmn. Powell from Assn. of Public-Safety Communications Officials-International (APCO), International Assn. of Fire Chiefs, International Assn. of Chiefs of Police, others. Proposal would realign frequencies at 700, 800 and 900 MHz and 2.1 GHz and more than double public safety’s current allocation of 9.5 MHz of noncontiguous spectrum at 800 MHz (CD Nov 23 p1).
Eldorado Communications, which had vied with NextWave for PCS licenses in 1996 C-block auction, said this week it opposed settlement on licenses reached by NextWave, major wireless carriers and U.S. govt. Eldorado contended that NextWave bid up prices, shrinking amount of spectrum that smaller carriers could afford. Earlier this month, Eldorado had filed emergency petition at FCC asking that agency halt “secret negotiations” with NextWave and carriers, saying they violated Administrative Procedure Act, FCC’s own rules, due process protections. “In opposing this settlement, we will pursue our rights before the FCC, in the Congress and in the courts,” Eldorado CEO Will Yandell said. On Fri., when FCC and carriers unveiled final settlement agreement, Eldorado filed Freedom of Information Act request at FCC asking for access to certain documents related to settlement discussions. Eldorado is seeking information on meetings, personal exchanges, letters and e-mails between carriers involved in settlement and FCC staff on NextWave licenses. Eldorado said it had returned licenses it won at auction to FCC, as did other companies, “at substantial cost.” NextWave instead had chosen to “renegotiate” purchase by declaring bankruptcy, Eldorado said.
At occasionally emotionally charged meeting of Public Safety National Coordination Committee (NCC) in Brooklyn Fri., public safety officials, including several who themselves had responded to attacks on World Trade Center and Pentagon, laid out for policymakers critical spectrum needs in wake of Sept. 11. At top of many lists was clearing analog TV incumbents from 700 MHz to make way for public safety users to operate in 24 MHz that FCC has set aside from them in that band. In first days following N.Y. attack, TV stations went off air after their equipment on top of World Trade Center was destroyed, said Peter Meade, chief of Nassau County, N.Y., Fire Dept. “I didn’t hear anybody saying, ‘I need Channel 2 back,'” Meade said. “But there are literally millions of people in the New York metropolitan area who cannot live and who will not live without an augmentation to the existing public safety communications channels. So television be damned.” Other key issues that surfaced repeatedly in day-long meeting included need for better interoperability between jurisdictions, for redundant wireless data network that could function during disasters and for more govt. funding. Several new proposals were put on table as well, including one by Nextel that was receiving kudos from public safety community and would relocate users in 700 MHz and 800 MHz bands for more efficient operations.
NextWave negotiations finally ended with announcement Fri. by FCC Chmn. Powell that settlement had been reached for company to surrender all its C- and F-block licenses. He said NextWave’s licenses would go to wireless carriers that won them in re-auction and “the American taxpayer will receive $10 billion, more than twice the amount than would have been received had NextWave kept the licenses in accordance with recent court rulings.”
Spectrum, direly needed for rescue operations following Sept. 11 terrorist attacks, was unavailable due to misallocation of bands intended for public safety, wireless analysts said at New America Foundation forum Thurs. on “The Great Airwaves Robbery.” Only about 20% of wireless calls attempted on Sept. 11 in N.Y.C. and 40% in Washington were completed, CTIA Pres. Tom Wheeler said. “The nature of wireless communication transformed on Sept. 11,” he said, citing 400% increase in cellphone usage in N.Y. after attacks. “We built a system based on spectrum levels that expected wireless to only be an ancillary service,” and not broad alternative form of communication it has become, he said.
Telecom equipment vendors at UBS Warburg Global Telecom Conference in N.Y. Wed. stressed extent to which they were reacting to reduced spending by service providers and altered buying patterns in face of sagging demand. “The best-laid plans will be slowed,” Tellabs CEO Richard Notebaert said. “Physical deployments or expenditures will not perhaps go as quickly as people thought 6 months ago.” Like several other top executives at 3-day conference, Notebaert, former Ameritech chmn.-CEO, said carriers still would invest in networks because broadband demand remained. But while network investments will continue, “I think it will go a little slower than some startups led people to believe,” he said. Several wireless equipment manufacturers were bullish on prospects that mobile data finally would take off, with emphasis on target marketing to niche user segments and technology that pushed content to consumers. Ericsson Investor Relations Vp Gary Pinkham said company expected international market for mobile systems to be flat to down 10% in 2002, although he added: “We think we are in a position to grow faster than the market overall.”