FCC added flexibility to policy designed to help clear incumbent analog broadcasters from Ch. 60-69 spectrum on voluntary basis, to allow introduction of wireless services in 700 MHz band and to ease shift of analog TV licensees to DTV. Commission said order approved Sept. 7 and released Mon. added flexibility to earlier policy designed to ease voluntary clearing of incumbent analog broadcasters in upper 700 MHz band. It granted petition of Spectrum Clearing Alliance (SCA), coalition of 21 broadcasters led by Paxson Paxson Communications that had asked that incumbent that gave up one of its channels to accommodate band clearing should have flexibility to continue operating in analog mode and convert to DTV at any time up until Dec. 31, 2005. Order allows such broadcasters to seek additional extension of DTV construction deadline if less than 70% of TV households in their markets are capable of receiving DTV signals.
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.
Northpoint continued to oppose auction for using satellite spectrum for proposed terrestrial service. Competitor MDS and other wireless companies asked FCC to auction spectrum, but Northpoint said that would destroy “incentives for entrepreneurs and inventors to develop innovative technologies to create new bandwidth in already licensed spectrum.” It said it was only company “qualified” for terrestrial license. “In the absence of mutually exclusive applications, there is no rationale for an auction.”
As expected, Commerce Secy. Donald Evans sent congressional leadership draft bill Thurs. to postpone for 2 years deadline for receipt of advanced wireless auction proceeds. He told top brass on Capitol Hill and Vice President Cheney that Office of Management & Budget’s preliminary scoring indicated that proposal would reduce surplus by $1 billion in fiscal 2002 and increase it by that amount in fiscal 2004. Proposed language would shift statutory deadlines for completing auctions of 2 bands under consideration for 3G services to Sept. 30, 2004, from Sept. 30, 2002. “Based on revised assumptions for the current spectrum auction schedule, the midsession review of the budget baseline already reflects the shift in auction receipts from 2002 to 2004,” Evans wrote. He said any law that would reduce receipts was subject to pay-as-you-go (PAYGO) requirements under Balanced Budget and Emergency Deficit Control Act (BEA). “The BEA requires that official PAYGO scoring continue to use the FY 2002 budget baseline and thus score the cost to FY [fiscal year] 2002,” Evans said. “The Administration will work with Congress to ensure that any unintended sequester of spending does not occur under current law or through enactment of any proposals that are part of the President’s program.” Proposal would shift deadlines for depositing proceeds in U.S. Treasury for auctioning 1710-1755 MHz and 2110-2150 MHz and would provide more time to arrive at 3G decisions, Evans said. “Chairman Powell of the Federal Communications Commission and I both believe that it is imperative that the final allocation decision be the best possible one and that additional time and continued hard work are needed to reach that decision,” Evans wrote. While govt. wants to identify spectrum for 3G services as quickly as possible, he said, current statutory deadline “does not provide sufficient time to conclude the identification process and conduct an auction before Sept. 30, 2002.” NTIA Dir. Nancy Victory told reporters Wed. that language would be sent to Hill this week (CD Sept 6 p1). Besides Cheney, Evans sent letters to Senate Majority Leader Daschle (D-S.D.), House Speaker Hastert (R-Ill.), House Majority Leader Armey (R- Tex.), Sen. Lott (R-Miss.). Senate Commerce Committee Chmn. Hollings (D-S.C.), House Commerce Committee Chmn. Tauzin (R-La.), House Minority Leader Gephardt (D-Mo.), Sen. McCain (R-Ariz.), Rep. Dingell (D-Mich.).
NTIA plans to send legislative proposal to Congress today (Thurs.) that would postpone for 2 years deadline for receipt of advanced wireless auction proceeds. Move is designed to give federal policymakers more time to reach decision on obtaining additional spectrum for 3rd generation wireless services. In her first news conference, NTIA Dir. Nancy Victory said auction proposal didn’t mean current 3G viability analysis by broad range of federal agencies would itself take 2 more years: “We are hoping to do it in a much shorter period.” Legislation that would provide additional time for auction proceeds to be deposited in U.S. Treasury “is a recognition of the fact that more time is needed in order to take a look at this issue,” she said, referring to 3G. New date would be Sept. 30, 2004, for proceeds to be deposited from auction of 1710-1755 MHz and 2110-2150 MHz, instead of current statutory deadline of Sept. 30, 2002, she said. Besides 3G, Victory said she saw NTIA focusing on questions of broadband deployment, telecom and broadcast minority ownership, comprehensive spectrum policy review.
FCC asked U.S. Bankruptcy Court, White Plains, N.Y., Fri. to reject NextWave’s “speculative and skeletal disclosure statement” that is part of its pending plan of reorganization. Wide-ranging objection by Commission assailed lack of information about NextWave’s financing, business plan, expected cash flow, use of funds, market analysis and liquidation plan. “It is impossible for this court or any creditor to make an informed judgment about the proposed current plan,” FCC said, contending it was “unconfirmable on its face.” Objection underscored that NextWave’s compliance with eligibility requirements for regaining its PCS licenses still had to be decided in pending regulatory proceedings. “It is both premature and misleading for NextWave to affirmatively represent to creditors that it believes itself to be in compliance with the various eligibility requirements for the licenses,” FCC said: “Any such representation must be tempered by language apprising creditors that the threshold question of its eligibility to hold the licenses is a matter to be decided by the FCC alone, and that this court lacks jurisdiction to issue any orders with respect to the question of NextWave’s compliance.” Meanwhile, group of investors that included CIBC, Liberty, Pacific Capital Group and TPG Partners also filed objection to disclosure statement Fri.
Alaska Native Wireless (ANW) and VoiceStream filed petition at FCC late Thurs. asking agency to deny reinstatement of NextWave’s PCS licenses and contending recent $2.5 billion investment agreement by UBS Warburg gave banker “de facto control.” Petition also challenged proposed $300 million investment by Qualcomm, saying stake would call into question NextWave’s independence and adherence to FCC licensing requirements. Qualcomm investment “could substantially impair NextWave’s ability to implement its own business and policy decisions regarding build-out, deployment and spectrum usage, particularly if NextWave is unwilling to lose Qualcomm as a source of needed mobile virtual network operators customer contracts,” petition said. Petition was filed on same day that U.S. Appeals Court, D.C., was scheduled to hand down remand mandate of decision that overturned FCC decision to cancel NextWave licenses for nonpayment. FCC wasn’t planning to appeal to U.S. Supreme Court decision by D.C. Circuit Aug. 23 that rejected Commission’s request for stay of mandate, source said (CD Aug 27 p2).
Defense Secy. Donald Rumsfeld and Joint Chiefs of Staff Chmn. Henry Shelton told Senate Majority Leader Daschle (D-S.D.) that no final decision should be made to reallocate DoD spectrum for 3G “until truly comparable spectrum is identified and made available.” Letter, sent to Daschle Mon. and released Wed., marks first time Rumsfeld and Shelton have spelled out publicly their position on upcoming 3G spectrum decisions. Citing “win-win” solutions put forward by wireless industry, they said they remained “open to such a solution provided that DoD requirements are preserved.” But Rumsfeld and Shelton cautioned that no solution was feasible until comparable spectrum has been identified for DoD functions that would be displaced. “Therefore, we ask that no decision be made to reallocate the federal band, including a ‘policy decision’ or ‘decision in principle,’ until truly comparable spectrum is identified and made available,” they wrote. Letter comes within days of expected FCC decision that will take other major candidate band for 3G -- 2500-2690 MHz licensed for MMDS and Instructional TV Fixed Service -- out of running for relocation for advanced wireless services (CD Aug 28 p1).
FCC is poised to include language in order due out shortly that would take MMDS and Instructional TV Fixed Service (ITFS) out of play for 3G relocation but would allow both fixed and mobile operations to operate in MMDS band. Item has been on circulation on 8th floor, with decision expected this week or early next week, sources said. FCC Chmn. Powell pledged at last agenda meeting (CD Aug 10 p3) to have Commission action by month’s end on status of MMDS and ITFS, with industry observers expecting then that operations at 2.5 GHz would be taken out of play for additional 3G spectrum. Additional flexible reallocation provisions in pending order have created concerns in mobile wireless community that that could hamper overall 3G decision-making on obtaining additional spectrum. Issue, numerous industry sources said, is that it’s not technically feasible to share 2.5 GHz between prospective mobile uses and existing fixed wireless applications, so granting spectrum flexibility would provide no additional capacity for 3G use.
FCC asked U.S. Bankruptcy Court, White Plains, N.Y., not to approve Oct. 30 confirmation hearing proposed for NextWave’s reorganization plan until after U.S. Supreme Court rules on Commission’s request for certiorari. Commission plans to ask court Sept. 12 to review U.S. Appeals Court, D.C., ruling that returned PCS licenses to bankrupt C-block bidder. D.C. Circuit had remanded decision to cancel NextWave licenses for missed payment. U.S. Attorney N.Y. Mary Jo White told Bankruptcy Court Wed. that FCC wanted Supreme Court to have opportunity to weigh certiorari petition before proposed confirmation hearing was held for NextWave reorganization plan. Meanwhile, despite uncertainty created by litigation, Office of Management & Budget (OMB) said it wasn’t fretting over possibility it might not receive auction proceeds in NextWave case. In Jan. PCS re-auction, wireless carriers bid nearly $15.4 billion on licenses for which NextWave originally had bid $4.7 billion. D.C. Circuit turned down stay request, at our deadline.
As expected, Northpoint went on record at FCC with opposition to any auction in 12.2-12.7 GHz satellite band it seeks to use for satellite service. Since company introduced concept, others including Pegasus and MDS America have made applications mirroring Northpoint’s to use spectrum originally set aside for satellite operators. In meeting with FCC Wireless Bureau and legal adviser to Comr. Abernathy on pending license and auction, Northpoint said auction would delay service, penalize company and stymie future innovation. FCC auction would delay service rollout for “perhaps years and inevitably increase cost to consumers,” it said: “Moreover, auctions have never facilitated the deployment of service for rural areas.”