PanAmSat wants FCC to require early demonstration of compliance with operational and additional operational limits of companies before allowing spectrum sharing by NGSO FSS, GSO and terrestrial companies. Voicing strong opposition to portions of plan, PanAmSat filing argued against reconsideration petition from Skybridge as satellite companies weighed in with opinions on FCC decision on proposed spectrum sharing in 2 separate bands.
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.
Verizon Wireless emphasized to FCC why it thought Commission should postpone granting licenses won in $17 billion Jan. PCS auction, with carrier laying out alternative payment proposal if agency decided to ignore its advice. Verizon has been asking Commission to consider deferring grant of C-block licenses until U.S. Court of Appeals, D.C., makes decision in NextWave case. Most licenses up for bid in auction had been reclaimed from NextWave after FCC cancelled its licenses for nonpayment. Verizon Wireless won largest single block of licenses in auction, purchasing nearly $8.8 billion (CD Jan 29 p1). Last month, NextWave also asked FCC to delay spectrum awards until D.C. Circuit issued opinion (CD March 13 p4). “Requiring payment now would be premature because the money would have to be held in reserve for possible return to the high bidders,” Verizon wrote in supplemental comments filed with Commission this week. “It would create significant problems without any countervailing benefits.” Verizon said that in past auctions, bidders were able to make final payments and immediately start building out spectrum. “Here, however, some bidders may determine that it is financially imprudent to invest still more funds until the cloud on the licenses they won are removed,” carrier said. “Lenders who are already committed to fund a bidder’s payment may balk at supplying still more funding without any certainty that they are secured by unconditioned licenses.” Verizon also argued that “litigation uncertainties” could increase borrowing costs. Without clear signal from FCC on repayment date, auction participants could have to secure financing arrangements that were more expensive or impose breakage costs for early repayment. If Commission decides to move ahead on granting licenses, Verizon proposed plan that would allow high bidders to either pay for NextWave spectrum immediately or defer payment but agree to pay interest on final payments. Under proposal, applicants would have to make final payments for all licenses that weren’t tied up in NextWave litigation within 10 days of public notice granting licenses. Applicants that won NextWave licenses could also make entire final payment within 10 business days or wait until 10 days after D.C. Circuit issued decision affirming cancellation of licenses. In latter case, applicants would be required to pay interest. NextWave spokesman said: “Verizon is absolutely right to say that requiring companies to pay billions of dollars for those contested licenses before the court rules is contrary to the public interest and violates basic, common sense.”
FCC unanimously approved Deutsche Telekom’s (DT) merger with VoiceStream and Powertel, imposing no special conditions on $34 billion deal and provoking renewed commitment from Sen. Hollings (D-S.C.) to seek restrictions on foreign govt. ownership in U.S. telecom companies. FCC adopted order 4-0, with Comr. Furchtgott- Roth dissenting in part on separate deal on national security issues between federal agencies and companies. Order, approved Tues., is expected to be released as early as today (Thurs.) Commission said in news release it found DT would “have neither the incentive nor the ability to engage in unfair competition, specifically predatory pricing, in the U.S. domestic mobile telephony market.”
FCC Wireless Bureau Chief Thomas Sugrue outlined several prospects for potentially freeing additional private wireless spectrum Fri., including possibility of user fees, audit of spectrum uses, current secondary spectrum proceeding. Point of user fees for private land mobile radio licenses, idea that has been floated in past and would require change by Congress, wouldn’t be to generate revenue but to increase efficiency of spectrum use, Sugrue said in lunch speech to Land Mobile Communications Council (LMCC) annual meeting in Washington. “The theory is unless there’s a cost placed on bandwidth and coverage, licensees wouldn’t improve their efficiency of both,” he said, noting that FCC couldn’t make change on its own.
“Unintended outcome” of high prices paid in recent wireless spectrum auctions has been to force carriers to curtail infrastructure investment, Gartner Dataquest said in new report. “Because the telecommunications sector is so large, the investment slowdown has actually slowed the U.S. economy,” said Ron Cowles, Gartner analyst for telecom and networking. “The government should consider using a portion of the auction revenue to apply financial incentives for infrastructure development to build advanced networks,” Cowles said. Other steps that govt. could take to stimulate telecom sector investment include investment tax credits, streamlining of rules that inhibit infrastructure deployment and modifying rules that stymie competition, report said. It also said govt. must redefine universal access to include broadband equal access “allowing bandwidth connectivity for advanced services to all areas, business and residential alike.”
Public broadcasters and major cable operators are starting to discuss digital TV carriage agreements that could short-circuit push by broadcasting industry for DTV must-carry rules. Cable and PTV officials said AT&T Broadband and Cox Communications were holding talks with special APTS/PBS MSO Advisory Committee, while Comcast, Charter Communications and other large cable operators have expressed strong interest in deals. APTS said it planned to approach Adelphia and Cablevision Systems, too, following landmark DTV carriage pact that APTS and PBS signed with Time Warner Cable last Sept. “I would expect to see more conversations between public stations and MSOs in the coming months,” NCTA Pres. Robert Sachs said.
Several large wireless interests marshaled new research from economists to bolster arguments to FCC for relaxing spectrum cap, proposal that raised concern of some small carriers and largest wireless reseller WorldCom. In proposed rulemaking earlier this year (CD Jan 23 p1), FCC reopened examination of whether spectrum cap and cellular cross-interest rule for commercial mobile radio service (CMRS) providers still were needed. Spectrum aggregation limits are 45 MHz in most markets, except rural areas, where cap is 55 MHz. In comments to date, CTIA, Sprint PCS and Verizon Wireless presented economic data to show how wireless competition had grown, although Sprint’s numbers indicated largest markets “remain concentrated.” As for cross-ownership rules, Verizon wrote: “Duopoly market structure -- the entire premise for this rule -- of course is gone.”
ArrayComm and 11 other technology developers created TDD Coalition that’s urging FCC to make spectrum allocations for wireless broadband data systems using time division duplex (TDD). Companies requested regulators to make unpaired spectrum available for TDD-based services instead of paired frequencies typically allocated for mobile wireless services. ArrayComm Senior Vp Bradley Holmes said TDD-based systems that offer wireless broadband services are expected to complement 3rd generation wireless services that use frequency division duplex technology that requires paired bands of spectrum. Other coalition members are Aperto Networks, BeamReach Networks, Caly Networks, Clearwire, Harris Corp., IPWireless, LinkAir, Malibu Networks, Radiant Networks, Raze Technologies, Wavion. Coalition said it wanted U.S. spectrum decisions to align with those of Europe and Japan, which already have made unpaired frequencies available for technologies such as TDD. Holmes said one concern of companies such as ArrayComm was that because other countries were beginning to make allocations dedicated to both TDD and FDD for advanced wireless services, if U.S. didn’t move in same direction, systems developed in U.S. would be deployed elsewhere first. ArrayComm’s technologies include i-Burst, portable broadband system that offers data rates of 1 Mbps, although company said technology could provide up to 40 Mbps per cell site. Holmes, treasurer of new coalition, told us that ArrayComm was conducting FCC-approved market trial in San Diego. Under experimental license granted by agency, ArrayCom can deploy i-Burst technology there until end of next year using 5 MHz of spectrum. As part of FCC proceeding that’s examining bands for potentially providing more spectrum for 3G, ArrayComm asked FCC to make allocations for not just FDD but for TDD as well. ArrayComm contended that technology could offer high-speed data in less spectrum than FDD-based technologies. “We're saying give us one block of 10 MHz,” Holmes said. Without channel plan that allowed single block optimized for TDD, technology developers said their concern was they would have to vie for 2 paired blocks in auctions against larger wireless carriers using FDD-based systems, even though TDD needed only one block. Holmes said ArrayComm could deploy technology in as little as 5 MHz, but ideally would prefer 10 MHz.
Bush Administration’s fiscal year 2002 budget proposal would increase funds for FCC, but White House’s long term strategy is to level off agency’s spending over the next 4 years. According to govt. budget details released Mon., Bush would increase FCC’s FY 2002 budget to $248.5 million from current $230 million. Total proposed outlays, or “amount the [FCC] actually spends in a given fiscal year,” would increase to $320 million from $301 million. Spending in FY 2003 and 2004 would drop to $302 million, then increase by $1 million in FY 2005 and FY 2006, respectively, under plan.
Panelists at Congressional Internet Caucus lunch Thurs. didn’t rule out need for congressional intervention of some type on pending Internet-capable 3rd generation wireless allocation decisions involving Dept. of Defense, NTIA and FCC. At lunch on Capitol Hill sponsored by advisory committee to caucus, several panelists suggested Congress could have role to play, specifically on mandatory auction date for certain bands now under consideration for 3G allocation. FCC is overseeing decisions on 2.5 GHz spectrum now occupied by Multipoint Distribution Service (MDS) and Instructional TV Fixed Service licensees and NTIA has purview over 1.7 GHz band occupied by govt. users, mostly military systems. Under Executive Memorandum signed by President Clinton last Oct., FCC would have to make spectrum allocation decision in July to meet congressional deadline of Sept. 30, 2002, for depositing proceeds in U.S. Treasury from auction of certain bands. “I hope that Congress recognizes that we may have to slow down just a little to speed up and get the right solution,” said Steven Berry, CTIA senior vp-govt. affairs. Issue of making sure there’s enough time for decisions is particularly important given bifurcation of 3G decision-making authority between NTIA and FCC in that area. “That’s where Congress has a role,” Berry said. FCC Wireless Bureau Chief Thomas Sugrue described potential for reaching solution on vacating incumbents from one of existing bands under consideration, although he said logistics for how some of that would happen were less clear-cut. “We would not resist and would in fact welcome some help from our friends in Congress to help make this happen,” Sugrue said. Panel was moderated by Washington attorney Gerry Waldron, with other speakers including NTIA’s Joseph Gattuso, Motorola Vp-Telecom Strategy & Regulation Richard Barth, Pegasus Communications Vp Cheryl Crate and consultant Leslie Harris for WEBNow, coalition representing ITFS licensees. Several panelists cited extent to which reimbursement, which is required for moving federal licensees from incumbent spectrum, is likely to make relocation decisions somewhat more tenable. “This is an area where the spectrum is potentially so valuable to 3G services, there should be enough money I think to make some of this work out,” Sugrue said. “The money makes things not a zero-sum game anymore. Otherwise, we're taking from DoD and giving it here, or we're taking from MMDS and giving it there and they move and someone else wins and that’s a hard way to get anybody to agree.” NTIA’s Gattuso said the NTIA report released Fri. on possibilities for 3G spectrum sharing and segmentation in 1.7 GHz left open options. “We have seen a lot of interest by the Secretary of Commerce and the Administration in general to look at this issue at the highest levels of government and to work with industry to look at our options,” he said. Harris stressed that ITFS licensees were in thick of deployment plans for rolling out wireless broadband services, including those covering “congressional” priorities of distance learning and service to typically underserved inner city and rural areas. “There is more at stake here than can you move incumbents,” Harris said. “There’s a real opportunity here -- DoD needs advanced, digital highly encrypted telecommunications capabilities for the 21st century,” Berry said, reiterating CTIA’s view that DoD spectrum would be best for 3G. “Right now they're in analog systems,” he said of Defense communications. He cited ITFS estimates for relocating incumbents of up to $30 billion, with DoD estimates closer to $4 billion. “Quite frankly I was surprised by the dollar number that DoD gave to NTIA."