BellSouth and NAB are among those urging FCC to deny requests of satellite radio companies XM Radio and Sirius Satellite Radio for special temporary authority (STA) to operate high-powered terrestrial repeaters. NAB Pres. Edward Fritts said that “the time for subterfuge by XM Radio and Sirius Radio is over… These companies must come clean with regulators and the American people on their true intentions for making satellite radio a viable business.” In filing at FCC, NAB said intent of satellite digital audio radio service (SDARS) applications was “undisputed -- terrestrial repeaters should be used only to reach areas where a satellite signal cannot reach.” Citing concerns of interference to Wireless Communications Service (WCS) operations, BellSouth (BS) told FCC that XM and Sirius hadn’t met burden of proof to demonstrate that there were “extraordinary circumstances” warranting grants of STAs and that grants would serve public interest.
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.
Although it’s unknown who will lead House Armed Services Procurement Subcommittee following last week’s death of Chmn. Spence (R-S.C.), one likely successor intends to fight any attempt to transfer military spectrum to private sector. Rep. Hansen (R- Utah), senior majority member of procurement panel, will do battle with proponents of mandatory relocation of 1775-1850 MHz block of spectrum, staffer said: “Absent some new and compelling information, he would be opposed to having the military relinquish” that spectrum block.
Alaska Native Wireless (ANW), Verizon Wireless and VoiceStream reiterated calls to FCC to investigate qualifications of NextWave to hold C-block licenses. Aug. 15 filing at FCC by carriers, which won NextWave licenses in Jan. C-block re-auction, was response to NextWave request that Commission dismiss challenge to its qualifications to reclaim PCS spectrum (CD July 31 p1). NextWave asked FCC last month to reject petition by carriers that cited concerns over foreign ownership issues, designated entity status and financial qualifications to meet licensee requirements. Original petition by 3 companies contended U.S. Appeals Court, D.C., decision that remanded FCC’s NextWave license cancellation decision addressed only issues related to bankruptcy code. Carriers said that meant Commission still could decide on other grounds not to reinstate licenses of NextWave, which disagreed. “The NextWave decision is not self-executing and issuance of the [remand] mandate will not automatically reinstate the licenses at issue without further action by the Commission,” 3 carriers said in response to NextWave filing. “As a matter of sound public policy and administrative efficiency, the Commission should undertake such investigation prior to any action to reinstate the licenses.” Carriers disputed NextWave argument that D.C. Circuit’s remand precluded FCC’s undertaking investigation they sought. Carriers said they wanted FCC to probe “what appears to be a lack of material information regarding whether respondent [NextWave] is in compliance with the Commission’s designated entity and foreign ownership rules.” Three carriers cited 2nd plan of reorganization that NextWave has filed with U.S. Bankruptcy Court, White Plains, N.Y., saying it provided “little to no information regarding who will own and control the company, if and when respondent emerges from bankruptcy. It is this dearth of information that drives the fundamental need for the requested investigation.” They cited lack of details on whether NextWave would comply with designated entity and foreign ownership rules. - - MG
FCC adopted notice of proposed rulemaking (NPRM) Thurs. that sought feedback on possibility of using mobile satellite service (MSS) spectrum for terrestrial wireless operations, either by MSS licensees or others. New ICO had petitioned FCC earlier this year to allow it to develop terrestrial spectrum using bands allocated to MSS (CD April 4 p1). In response, CTIA warned agency of precarious financial situation of several MSS developers and asked that spectrum be reallocated to more “efficient uses” such as 3G. Both sides lauded FCC action, with CTIA citing potential reallocation of up to 14 MHz of MSS spectrum for other uses and New ICO calling NPRM “important step” toward allowing MSS operators to reuse these frequencies for terrestrial operations on ancillary basis. At agenda meeting, FCC also unanimously adopted further notice of proposed rulemaking to examine additional frequency bands for advanced wireless services, including MSS. Proposals laid groundwork for putting additional commercial bands into play as part of 3G debate that has focused mainly on 2.5 GHz band occupied by MMDS and Instructional TV Fixed Service operators, 1755-1850 MHz spectrum used by Dept. of Defense and 1710-1755 MHz that has been reallocated from govt. to nongovt. users.
U.S. spectrum policy should move away from current “piecemeal” approach, particularly on upcoming 3G decisions, CTIA Pres. Tom Wheeler said Wed. At press lunch, he said current 3G discussions between industry and govt. presented opportunity to craft national spectrum policy plan that would look at timelines such as 5 to 10 years and be updated periodically. “What we have to break ourselves of is this piecemeal spectrum policy approach,” he said. With larger “pot” of spectrum on which to base decisions, policymakers would have more flexibility, he said. Asked about recent FCC decision to delay Ch. 60-69 auction and impact on 3G timelines, Wheeler said 700 MHz band was “potentially part of the solution because it provides alternatives for migration and other such developments.” He said “that’s beachfront property” with potential interest for Dept. of Defense. Overall uncertainty involving NextWave licenses takes 30 MHz of wireless spectrum off table now for any carrier to use, he said. Lauding attention that govt. players such as Commerce Dept. and FCC have paid to 3G decisions, Wheeler again called for Commission to eliminate spectrum cap to provide nearer term relief. “What is happening is pressure is building up… and there has to be this escape valve,” he said. After recent House and Senate hearings on 3G, discussions have continued with wireless industry and govt. at White House “involving all of the major players” in debate on how advanced wireless spectrum would be carved out, he said. As for carriers’ Enhanced 911 Phase 2 waiver requests, Wheeler stressed extent to which both public safety answering points (PSAPs) and wireless industry had to grapple with readiness. But he cited report that Assn. of Public-Safety Communications Officials estimated 10% of PSAPs involved Phase 1 complaint. Wheeler said that by contrast. all wireless carrier switches were Phase 1 ready. “What I have been trying to say to the PSAP community is we are going to be there, what are you going to do to ensure you will be able to take that latitude and longitude information and use it? I hope they come up with a plan,” Wheeler said. Separately, he touted early attendance and exhibitor figures for CTIA Wireless I.T. and Internet 2001 show in San Diego in Sept. Exhibitor registration figures are up 122% over last year, when 206 firms exhibited. Attendee preregistration also is running ahead of last year, he said. Wheeler said reported increases in IT spending and CTIA show figures point to uptick for wireless data industry. “We're starting to come out of the wilderness insofar as wireless data is concerned,” Wheeler said.
AT&T Wireless told SEC in filing Wed. that it hadn’t yet reached agreement with Alaska Native Wireless (ANW) on whether designated entity would participate in its wireless network. AT&T Wireless has noncontrolling equity stake of 39.9% in ANW, which won licenses in FCC’s C-block re-auction earlier this year. Results of that auction now are in disarray with June decision by U.S. Appeals Court, D.C., that would return licenses cancelled by FCC for nonpayment back to NextWave. AT&T Wireless filing said it had made $2.6 billion investment in ANW, which had won licenses for $2.9 billion in re-auction. ANW doesn’t have to use spectrum it acquires in way that’s consistent with “strategic objectives” of AT&T Wireless, latter told SEC. However, ANW does have to use wireless technology that’s compatible with AT&T’s. “If Alaska Native Wireless does not enter into agreements with us regarding the use and development of this spectrum similar to those we have entered into with our affiliates for our existing networks, it could have a material adverse impact on the timing and cost of implementing our third-generation strategy,” AT&T Wireless said. Carrier said that if NextWave decision were appealed successfully or settled or if ANW couldn’t obtain licenses for which it bid, “it could have a significant adverse impact on our plans to provide or enhance services in key new and existing markets.” In certain circumstances, if grant of licenses is challenged, “we may be obligated to purchase the interests of other investors,” AT&T Wireless said.
Previous applicants for wireless licenses are suing FCC for $148 million, contending that’s current value of licenses on which they charged Commission reneged on promise to award spectrum via lottery. Class action litigation is led by lottery applicants that include Gene Folden, Boca Raton; Judith Longshore, Canton, N.Y., Coastal Communications Assoc., Charleston, S.C. Lawsuit, filed in U.S. Court of Federal Claims, argued that agency had breached “implied contracts” to award 7 cellular licenses by lottery, saying govt. owed them and other lottery applicants pro rata share of current market value of spectrum. Applicants said they paid U.S. $855,200 to participate in lotteries that Commission held in 1989. FCC later found lottery winners to be unqualified and scheduled replacement lotteries for 6 of 7 licenses in July 1996, cancelling re-lotteries few months later. In 1997, Congress cancelled FCC’s authority to use lotteries, replacing them with auctions. After that, FCC awarded spectrum to 3 of originally disqualified lottery winners at direction of Congress. Plaintiffs said FCC “apparently intends” to auction 4 remaining cellular licenses that had been at issue. FCC Wireless Bureau released order March 2 that denied reconsideration of lottery participants’ application for 7 licenses. Licenses at issue are in Ark., Fla., Minn., N.D., Pa., P.R. and Tex. and range in estimated value from $4 million to $53.5 million. Suit said FCC, by not awarding 7 licenses by lottery, deprived applicants “of their contract rights to have chances of winning licenses.” Robert Kerrigan, attorney for lottery applicants, said govt. took money from applicants, kept $200 per applications that had been paid and then used another system to award licenses. “Although the government can do that from a regulatory perspective, the folks who paid to enter the lottery are entitled to the benefit of their bargain, which in this case is their pro rata share of the fair market value of those licenses,” he said. Kerrigan has represented state of Fla. against tobacco industry. He said there were 926 members of class of lottery applicants for 7 licenses who would share value of $148 million on pro rata basis, depending on which lotteries they entered, “minus expenses and attorney fees.”
FCC staffers met with terrestrial startup MDS America, which wants to use DBS spectrum for its wireless technology, on results of system testing and possible spectrum auction that company favors, MDS said in filing. MDS told Commission tests were completed last month, and MDS was waiting for report on tests from independent engineering firm. MDS also said if more than one company was interested in spectrum, Commission should hold auction.
In latest twist in protracted legal battle over NextWave’s C- block licenses, FCC plans to ask U.S. Supreme Court to review U.S. Appeals Court, D.C., ruling that returned licenses to bankrupt carrier. In meantime, Commission asked D.C. Circuit to stay results of its June remand that otherwise would take effect Aug. 13 by returning to NextWave licenses on which it had bid $4.7 billion in 1996. D.C. Circuit in June reversed FCC decision that canceled NextWave licenses for missed payment, throwing results of $16.8 billion re-auction of those licenses into chaos. “High court review will protect the integrity of the FCC’s auctions program, which Congress has chosen as the best method of assigning scarce and precious spectrum resources to those that will put them to their most productive use,” FCC Chmn. Powell said. Commission plans to file petition for certiorari at Supreme Court Sept. 22.
Senate Commerce Committee’s communications subcommittee took first run on Senate side Tues. on difficult spectrum allocations decisions that remain unresolved for 3rd generation wireless. Panel members questioned govt. officials closely on how efficiently both military and commercial operators are using existing spectrum allocations. Echoing Pentagon concerns raised at House hearing last week (CD July 25 p1), Linton Wells, acting asst. secy. of defense for command, control, communications and intelligence, continued to outline obstacles to relocation of military users before 2010 for terrestrial systems and 2017 for satellite systems. Without choosing sides between whether incumbent commercial or military users should be moved, Subcommittee Chmn. Inouye (D-Hawaii) stressed need for compromise. “If the only option is to relocate the Defense Department, we must find comparable spectrum, develop a migration time frame that allows the Defense Department to maintain its operations as it vacates the spectrum and ensure that the Department’s costs are reimbursed,” Inouye said. Like other panel members, he emphasized need to reach solution that wouldn’t degrade military readiness.