MILITARY, CTIA SPAR ON 3G AS VERIZON CALLS FOR NEXTWAVE FIX

Strigl, who reiterated call that spectrum cap must be relaxed, said “how could I come to Washington without at least mentioning my $9 billion problem?” He referred to amount carrier bid in Jan. re-auction for C-block spectrum that court now has returned to NextWave: “Congress should do all it can to encourage all the parties to settle. This is the best way to ensure that the value of all the licenses purchased at the U.S. auction are put into the hands of carriers immediately to serve our customers.” On spectrum cap, Strigl said that in most markets, Verizon had 25-35 MHz, although in markets such as N.Y., NextWave spectrum would take carrier up to 45 MHz. “We don’t have that spectrum,” he said. “We can’t look for additional spectrum in the interim.” Verizon Wireless needs “minimum” of 65 MHz in its major urban markets in next 5 to 6 years, he said. In cities such as L.A., N.Y., Chicago and Washington, need is even shorter term -- in next year to 18 months, Strigl said. Without additional spectrum, Verizon would run risk of services’ becoming constrained, he said.

Talking with reporters after hearing, Strigl said Verizon Wireless had “some ideas” about how NextWave licenses returned by court should be handled. “We will hopefully in the next few days be putting something in writing to the FCC, to OMB [Office of Management & Budget] and to the Department of Justice,” Strigl said. He declined to give details. “There ought to be a settlement. We've had spectrum laying fallow for years, it’s time to put it to use to serve the American people.”

Linton Wells, acting assistant secy. of defense for command, control, communications and intelligence, questioned what CTIA has characterized as “win-win” solution for both military and wireless operators. Industry has stressed that any solution would have to ensure military incumbents would be reimbursed for relocation and be guaranteed replacement spectrum, with relocation costs potentially being placed in trust fund. “The devil is in the details,” Wells said. One problem of trust fund is that it “becomes complicated” when it gets to details such as how that money would flow from general revenue fund to specific department, Wells said. “In theory it sounds excellent,” he said. “I remain skeptical it will work.”

Wells reiterated DoD findings that even with comparable spectrum and timely compensation, DoD satellite control systems would not be able to vacate band before 2017 and nonspace systems before 2010. He cautioned policymakers against leaping to foregone conclusion that military spectrum was best for 3G. “We are willing to engage with all parties to find a way ahead on spectrum,” he testified. “Nonetheless, we believe that the issue of equivalent spectrum must be resolved before any decisions are made on spectrum for 3G, including any ‘decision in principle’ or ‘policy decision on band reallocation.” He also told panel that while CTIA had been touting solution to provide Pentagon with modernization funds beyond marginal costs of relocation, DoD had not “yet seen such a proposal.”

CTIA Pres. Thomas Wheeler told panel that half of fixed wireless systems operating in DoD spectrum at 1.7 GHz were used by Army Corps of Engineers for monitoring purposes. He suggested there was migration path for such operations to kinds of services that commercial wireless providers were offering daily, freeing up at least some of that spectrum as starting point. Wheeler also stressed that industry agreed that transition needed time for implementation. “We agree there needs to be a plan,” he said. “We're not talking about tomorrow, [that] this all gets done in one clean cut,” Wheeler said, noting that CTIA disagreed with DoD on 2010 point for terrestrial relocation but was in agreement on issues such as need for reimbursement and comparable replacement spectrum.

Several subcommittee members stressed need that any decisions involving military spectrum keep national security interests in mind, particularly in seamless transition of services that wouldn’t disrupt existing operations. “It would have to be a seamless transition,” said Rep. Shimkus (R-Ill.), saying that timelines presented by military represented “challenge.” Pickering said military’s modernization needs over next 10 years were estimated at up to $100 billion. “The budget reality today is I don’t know where that money is going to come from to achieve those modernization efforts,” he said. Because 3G spectrum auction has been estimated to bring in as much as $40 billion, Pickering said that would put military nearly at halfway point for its modernization financing. Rep. Wilson (R-N.M.), who said she was only subcommittee member who also sat on House Armed Services Committee, said there was “deep distrust” between wireless industry and DoD. “This is more difficult than some of the rhetoric I have seen,” she said of 3G decision process. “The military is probably justifiably distrustful that they would ever see any of the money that would come from spectrum auctions. Let’s face it, they've been messed over before.”

Despite difficulties that emerged during hearing on 3G decisions, FCC, NTIA and DoD officials met Mon. at FCC hq to discuss spectrum decisionmaking process. Meeting came after Commerce Secy. Donald Evans wrote to FCC Chmn. Powell last week that agencies should have additional time to work with FCC to develop new plan for selection of advanced wireless spectrum (CD July 23 p1). One source said meeting was to discuss process for interagency planning. Another said several military representatives expressed displeasure Tues. to House panels holding military pursestrings about progress of House Telecom Subcommittee hearing. At start of subcommittee hearing, ranking Democrat Markey (D-Mass.) said 3G decisions should be contingent on answering questions such as how much spectrum was needed and at what times. He asked whether large block should be made available all at once or whether there should be “controlled rollout so we can anticipate demand.” Markey also suggested that besides fund with auction proceeds that would be used to underwrite relocation of incumbent users, additional auction proceeds could be used for educational purposes. One possible use of such funds would be to help public broadcasters make transition to DTV, he said.

On other wireless policy issues, subcommittee members took wireless industry to task for what they said was slow progress in implementing E911, expressing concerns about waivers for implementation dates that are pending at FCC. Rep. Eshoo (D-Cal.) asked why industry was expending so many resources on securing additional spectrum for 3G instead of implementing E911 on time. - - Mary Greczyn