FCC SPECTRUM TASK FORCE LAYS OUT DETAILS OF REFORM PROPOSALS

Group recommended that Commission, within next 5 years, identify 100 MHz below 5 GHz for transition to more flexible rights licensing scheme. FCC Office of Plans & Policy (OPP) released separate staff paper Fri. that proposed Commission reallocate spectrum to flexible use and organize 2-sided auctions, in which incumbents voluntarily could turn in spectrum in return for benefits such as greater flexibility.

Task force, which Chmn. Powell created in June, outlined to FCC at Nov. 7 agenda meeting its recommendations for updating agency’s decades-old spectrum management system, concluding broadly that access to spectrum was bigger problem than scarcity (CD Nov 8 p1). Panel released full text of 39 recommendations Fri., filling in details such as potential measures for allowing public safety operators to lease unused spectrum on secondary markets during times when it isn’t needed for emergencies. Other recommendations were that FCC: (1) Consider user fees or other steps to promote incentives on efficient use “when marketplace is inadequate.” (2) Ensure it has adequate resources to “independently” monitor and enforce spectrum management rules, “including possible increase in statutory forfeiture authority.” (3) Adopt new measure, “interference temperature,” to better quantify and manage interference. (4) Consider applying receiver performance requirements, using incentives, regulatory mandates or combination of the 2. Task force said it preferred use of voluntary receiver performance requirements over mandates. Such voluntary requirements could be handled by industry groups or through incentives to promote use of advanced receivers.

Legislative recommendations include proposal to review potential spectrum fees for non-market uses. Group concluded FCC could best promote economic efficiency by providing spectrum users with flexibility of use and ease of transfer of bands. It said flexibility provided incentives for users to “face the opportunity cost of their spectrum use.” In cases where FCC needed to promote spectrum or technical efficiency -- rather than economic efficiency -- marketplace forces might not be enough, report said. It gave examples of spectrum allocated for govt. use in which “alternative mechanisms such as user fees should be considered to stimulate improvements in efficiency.” In case of Orbit Act, report addressed legislative language that excluded spectrum used for international and global satellite services from being assigned through auction. To provide more flexibility in licensing satellite spectrum, task force recommended FCC consider floating statutory proposal that would re-examine Sec. 647 of Orbit Act to weigh permitting “but not requiring” competitive bidding to resolve mutually exclusive applications for those services.

Meanwhile, OPP released working paper by Evan Kwerel and John Williams that outlined method for restructuring large amount of encumbered spectrum. Proposals, which reflect authors’ views and not official FCC stance, would aim to reallocate spectrum to flexible use and organize large-scale, “2-sided” auctions in which encumbered spectrum, which incumbents would turn in voluntarily turn in, would be auctioned along with spectrum that wasn’t now assigned. “By making highly complementary spectrum available in a single auction, the reallocated bands could be quickly and efficiently restructured,” OPP said. Idea is to address “coordination problems” that arise when large blocks of spectrum aren’t available at same time for purchase during large-scale transition to more-efficient market allocations. Under proposal, incumbents would have 2 choices: (1) Not participating, keeping current use and not gaining additional flexibility. (2) Participating and gaining “immediate” flexibility in existing spectrum and being allowed to keep auction proceeds from sale of their spectrum in auction. They also would be allowed to buy back their licenses in auction and keep amount they bid for their licenses. “This would provide them flexibility at no cost to themselves, since they would keep the amount bid for their license,” OPP said.

Task force grappled with how to keep FCC rules up to date with technology changes. Report recommended “periodic review” of rules to accommodate new technologies on set schedule, such as every 5-10 years. But it stressed that licensees investing in spectrum still needed certainty of knowing they had ability to use spectrum, “at least for some foreseeable period.” In area of enforcement, task force recommended FCC examine needs of field offices and monitoring facilities and consider providing “additional funding” to accommodate proposals in report. Task force didn’t specify dollar figure. “The Commission may want to seek a review and possible increase in its statutory forfeiture authority in order to provide additional incentives for spectrum users to comply with the Commission’s rules,” report said.

Report outlined extent to which public safety spectrum use typically “spiked” during emergency periods of high traffic, with capacity that went unused in less intense periods. “Public safety users should have flexibility to lease their dedicated spectrum capacity that is available during lower-use periods to commercial users with a ’takeback’ mechanism when public safety use increases,” report said. That would mean emergency responders could reclaim spectrum immediately when crisis erupted, report said: “The potential for this type of shared use will increase as smart transmitters and receivers are developed that can be shut down immediately upon command.”

In what would amount to twist on wireless priority access concept, task force also cited possibility of “enhanced easement rights” to nonpublic safety spectrum for public safety uses in regional or national emergencies. In “extraordinary” emergencies, such as terrorist attacks, public safety providers might need access on priority basis to spectrum capacity beyond what they use day-to-day. “Because of the extraordinary nature of these events, permanent dedication of spectrum to public safety to meet these contingencies is likely to be highly inefficient,” report concluded. “An alternative would be to address these needs through an easement mechanism that would enable public safety users to operate on nonpublic safety spectrum in such extraordinary emergencies.”

Report’s recommendations don’t augur immediate changes for broadcasters. For now, it said, “command-and-control” regulatory model is sufficient for existing broadcast uses. It cited universal nature of broadcast services and transition to digital arena now under way. But “over the longer term, the Commission should periodically reevaluate its broadcast spectrum policies to determine whether they remain necessary to accomplish the public interest objectives they are intended to promote,” report said. Reexamination should consider extent to which public interest benefits provided by broadcast spectrum under current regulations could be provided through more flexible rules.

Among legislative challenges cited by report are support for legislative proposals that would alter Communications Act to authorize use of auction funds to pay relocation costs to govt. incumbents that moved to make way for other uses. Such a mechanism is contemplated in pending legislation that would create that type of system for clearing military users from spectrum allocated to commercial wireless operators for 3G. Report’s recommendations would take that idea step further by expanding such measures to include reimbursement for nonfederal incumbents.

Task force also laid out several transition scenarios for reallocating spectrum to make some of concepts work: (1) FCC could reallocate particular spectrum band to allow for more flexible uses, grant expanded usage rights under new licenses and require incumbents to clear band. That type of system was used when broadband PCS operators cleared spectrum to make way for narrowband users. (2) FCC could grant expanded usage rights under new licenses that were “overlaid” on top of incumbents. Incumbents would keep their existing rights on grandfathered basis and wouldn’t be subject to mandatory band-clearing or relocation. That has been used in services such as paging when FCC converted from site-based to geographic-area licensing. (3) FCC could reallocate restricted spectrum to more flexible use, grant expanded usage rights under new licenses and create market-based exchange to bolster voluntary clearing.