NTCA OUTLINES CHALLENGES FOR RURAL WIRELESS CARRIERS IN AUCTIONS
NTCA released survey results Thurs. that it said underscored increasing challenges rural wireless carriers faced in vying with large nationwide operators. NTCA cited factors such as dwindling access to capital of some operators in current economic downturn and difficulty they faced in competing with large rivals in current FCC auction system. Survey showed that 51% of respondents had no plans to participate in future auctions and many were turning to unlicensed spectrum to provide services, even though they faced congestion in those bands. Study said 71% of respondents complained it had become more difficult to obtain financing for wireless projects in last year. “Obtaining access to spectrum is a major problem for survey respondents,” NTCA Economist Rick Schadelbauer said at Thurs. briefing.
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
Annual survey found that in face of challenges for obtaining licensed spectrum, 40% of respondents were using unlicensed spectrum to provide broadband Internet and other services. New figures come as the FCC is preparing to release by year-end inquiry on providing wireless services in rural areas. NTCA survey said 84% of participating carriers with experience in obtaining financing said process was anywhere from “somewhat difficult” to “virtually impossible,” up from 56% in last year’s survey. One area expected to be examined in Commission’s upcoming rural wireless proceeding was challenge of partitioning and disaggregating spectrum. NTCA survey said that 68% of responding carriers without wireless license would sign partitioning agreement with license-holder if given opportunity, and 35% would be willing to enter into leasing arrangement.
Primary uses of unlicensed spectrum that emerged from survey were for broadband Internet, microwave, dial-up Web connections, wide area networks, DSL. “Utilizing unlicensed spectrum is hardly an ideal situation, however,” survey said. “The most commonly cited difficulties include interference/congestion and unsatisfactory equipment reliability.”
NTCA Vp-Govt. Affairs & Assn. Services Shirley Bloomfield expressed optimism that rural wireless legislation introduced in April by Sen. Baucus (D-Mont.) would be reintroduced next year. She said there was possibility that Baucus could proposal as standalone bill or it could be folded into comprehensive telecom legislation that Senate Commerce Committee Chmn. Hollings (D-S.C.) has been eyeing. Baucus’s measure (S-2075) would require FCC to award at least one license to a rural service area or “similarly sized geographic area” when more than one license in single block of spectrum was available. “We wanted legislation so that when auctions did take place that they would be meaningful,” Bloomfield said. There has been trend at FCC that when licenses are put out for auction, some are so large that it’s not viable for smaller carriers to compete for them or afford to build them out, Bloomfield said. “It’s easier for the FCC to create a nationwide footprint, but our folks are immediately eliminated,” she said of larger licenses. In FCC auction of lower 700 MHz band that ended in Sept., of licenses that were divided by large economic area groupings, only Pacific area license was sold -- to Aloha Partners, with rest unsold.
Survey said scope of auctions had encompassed large geographic areas, which led to high spectrum costs and large areas requiring deployment. Survey of 148 of NTCA’s member companies and cooperatives was conducted this summer. Of roughly half of respondents who signaled they had no plans to compete in future auctions, 75% cited inability to compete with larger carriers, 71% said spectrum wasn’t affordable and 62% cited high costs of build-outs. About 47% indicated they have signed partnership agreements with national carriers and 45% said they weren’t able to offer wireless pricing plan that was competitive with national carriers. “The vast majority (94%) finds it hard to compete with promotions, such as free long distance, being offered by the national carriers,” survey said.
NTCA regulatory counsel Jill Canfield said group planned to use survey results to provide data to FCC in proceedings such as upcoming rural inquiry and that several staff members at Commission already had expressed interest in results. “Many of our members believe that their position in wireless is important for viability,” she said: “We also know that auctions can be structured in such a way as to provide rural carriers with real opportunities.”