WIRELESS INDUSTRY EYES MILITARY SPECTRUM AS FIRST CHOICE FOR 3G

“Nobody likes to move,” Wheeler said of incumbents, saying similar issue was solved to free spectrum for original PCS auctions: “There has got to be another way that we can get over this impasse.” One possibility is to take portion of proceeds from 3G auction and use it to pay for relocation expenses, he said. “We will pay for it, if we can work out this kind of a trade.” International harmonization is key attraction of 1.7 GHz, meaning global roaming could be done without makeshift technological fixes, Wheeler said. He and Hundt acknowledged such plans could be tough sell to budget planners on Capitol Hill, who welcome FCC auction proceeds that now go directly to U.S. Treasury. “We have got to say spectrum policy is not budget policy,” Wheeler said. Hundt also cited possibilities of using 1.7 GHz for advanced wireless services. Referring to new FCC Chmn. Powell, he quipped that Commission needed chairman who “has the ability to mobilize famous generals on his behalf.”

Wheeler reiterated his call for FCC to lift 45 MHz spectrum cap as “interim” solution to free spectrum for wireless carriers gearing up for mobile data offerings. His proposal to take some of proceeds from wireless auction to relocate incumbents came as NTIA was proposing changes in how private sector would carry out mandates for reimbursing govt. agencies that relocated from spectrum after frequency reallocations were made. NTIA and FCC are preparing to release final reports next month examining 1.7 GHz and 2.5 GHz bands for additional spectrum for advanced wireless services. NTIA is studying impact, including potential relocation costs, in 1.7 GHz band and FCC is covering 2.5 GHz band, which includes MMDS incumbents such as Sprint and WorldCom and educators using Instruction TV Fixed Service licensees. White House memorandum last Oct. set aggressive deadlines for 3G spectrum decisions, culminating in Sept. 2002 auction (CD Oct 16 p1). Next industry-govt. meeting on issue will be hosted by NTIA Thurs. FCC and NTIA officials have stressed in recent weeks that no decisions have been made yet on whether MMDS or DOD bands would be preferable for 3G.

Meanwhile, Hundt assailed $17 billion generated in C- and F- block PCS auction that wrapped up last month as far too high -- as “disaster” and “catastrophe.” If carriers had known in advance which spectrum govt. would free for 3G services, prices would have remained more reasonable, he said. “It’s a sin of policy. It’s a mistake. It’s too much money,” he said, likening auction proceeds to exorbitant price tags generated by 3G auctions in U.K. Success of mobile data in U.S. hinges on investments that carriers make in infrastructure, with exorbitant auction prices potentially limiting capital left over for build-outs, he said. Hundt also warned of dire consequences of uneven playing field for competitors if policymakers lifted current 45 MHz spectrum cap but didn’t put enough spectrum in overall market. That could be “the tipping point that causes the market to collapse,” he said. Wireless industry needs 200-300 MHz of additional spectrum to do away with scarcity that has been driving up auction prices, he said.

Hundt also expressed pessimism about clearing of 700 MHz band for wireless carriers as analog TV broadcasters shifted to HDTV. Fundamental decision needs to be made whether to promote local, over-air HDTV business “or to say it’s never going to happen,” he said. “The latter is inevitable.” Separately, Hundt said he was concerned that spectrum cap debate at FCC hadn’t been framed in context of how many competitors each market should have.