WIRELESS OPERATORS DIVIDED AT FCC ON ITFS, OWNERSHIP LIMITS

Meanwhile, the Wireless Communications Assn. (WCA), National ITFS Assn. (NIA) and Catholic TV Network (CTN) defended their rebanding proposal for more efficient use of ITFS and MMDS bands. “While WCA, NIA and CTN concede that their proposed technical rules are more complex than the Commission has applied to other services, that complexity is absolutely necessary to maximize licensee flexibility while assuring deployed facilities receive an appropriate level of interference protection,” their filing said. The plan would earmark 132 MHz at the ends of the 2.5 GHz band for cellularized services and 42 MHz in the middle for high- power, high-site services. The plan would use market-by- market transitions, under which an ITFS licensee would be shifted to the new band plan when funding was available. That “allows capital to be directed where it is needed most - - the markets where operators are ready to deploy services that will benefit from the new band plan, without forcing premature expenditures in markets where service will not be immediately deployed,” the joint filing said.

The FCC in March adopted a proposal that asked a wide range of questions about how ITFS spectrum should be regulated, including whether educators should be able to sell licenses. It sought feedback on potential changes that would move away from a broadcast-style regulatory approach for ITFS and MMDS to one that would expedite the rollout of next- generation systems for wireless broadband. The proposal covered expanded access to that 190 MHz with options such as auctions, provisions for unlicensed uses and rule changes that would put into effect a previous decision to add a mobile allocation to MMDS. The potential of ITFS operators being able to sell spectrum sparked particular heartburn among those who viewed the spectrum as akin to national parkland for educators. Others cited the extent to which it had been underutilized and said ITFS operators already leased much of that spectrum to commercial users.

BellSouth argued that the FCC should keep eligibility rules open to allow DSL providers to hold and acquire MMDS and ITFS spectrum rights. The FCC had set forth the expected benefits of cable operators and DSL providers holding that spectrum, but asked whether allowing them to obtain MMDS and ITFS licenses could have a negative effect on the broadband Internet market. “The Commission’s sole concern appears to be that incumbent DSL providers and cable operators might ‘attempt to protect their market power’ by acquiring spectrum to preclude ‘current as well as future entry,'” BellSouth said. “Eligibility restrictions are disfavored as a matter of law and should be imposed only in circumstances that meet a very narrow statutory standard.” In areas where DSL and cable modem services don’t extend over existing landline facilities, MMDS and ITFS provide the ability to extend broadband service, BellSouth said. It also called on the FCC to adopt WCA’s joint rebanding plan.

EarthLink told the FCC the broadband Internet market was highly concentrated. Rule changes for ITFS and MMDS should promote that spectrum as a viable broadband pipe, it said: “As a result, it is appropriate for the Commission to limit or prohibit ownership by cable operators and incumbent local exchange carriers of MDS and ITFS spectrum that overlaps their cable franchise areas or local exchange areas, respectively. There is ample support for such a cross- ownership ban on both statutory and policy grounds.” EarthLink said cable modem service and DSL provided by incumbent MSOs and ILECs constituted more than 90% of the residential broadband market. It said Secs. 612 and 652 of the Communications Act showed Congress’s intent to bar incumbents from buying alternative facilities that could provide competing services in the same geographic area.

Sprint argued against a cross-ownership ban or other new restrictions on the eligibility of cable system operators, LECs or commercial wireless operators. “It is not possible to predict how Multipoint Distribution Service and the Instructional Television Fixed Service spectrum will be used or whether such future use might cause substantial harm in a specific market, because licensees under the new regulatory regime likely will have the flexibility to provide any fixed or mobile service in any market,” Sprint said.

The FCC should allow ITFS licensees, at their discretion, to assign or lease licenses in whole or in part to commercial operators, Sprint said. “It is clear that some ITFS licensees have no desire to sell ITFS spectrum to commercial entities, and thus adoption of this proposal poses no threat to the continued existence of ITFS,” the carrier said. “However, others may desire to realize the value of their assets to support their institution’s educational needs, and maximization of that value can only be achieved if licenses can be assigned to commercial system operators.” Sprint said it would “certainly be interested” in buying such licenses. “Construction of a 2.5 GHz band infrastructure will not be inexpensive, and removing the long-term uncertainties associated with spectrum leases cannot help but promote system deployment,” it said.

Many ITFS licensees supported WCA’s rebanding proposal but balked at the possibility of “open eligibility” for ITFS spectrum. A group of licensees that included Cal. State U., the Anaheim City School Dist., U. of Md. and others cited technology changes that allowed ITFS and MDS stations to provide high-speed, 2-way wireless data transmissions, supporting distance learning. “Allowing for-profit, commercial entities to become licensees would likely result in the ultimate destruction of the ITFS service as an educational asset,” the filing said.

A group of small, independent MMDS licensees told the FCC they supported certain changes in the WCA proposal. The group said some MDS spectrum should be included in both the upper and lower bands to facilitate the provision of FDD service. “Usage of ITFS channels should be limited to genuine educational use,” it said. “ITFS bandwidth not so used within one year of the effective date of the new rules should be converted to MDS use and auctioned off along with presently vacant ITFS spectrum.” Successful bidders for that spectrum should be required to make available up to 20% of it for “genuine” educational purposes, the group said. It backed the idea of a 2-sided auction. The Commission had sought comment on the applicability of such an auction. Incumbents voluntarily would turn in spectrum in exchange for greater flexibility. Encumbered spectrum that incumbents turned in would be auctioned along with spectrum that was unassigned. That would make complementary spectrum available in a single auction, the group said.

NTCA backed the FCC allowing commercial operations in the ITFS band, but licensing them according to small geographic territories, with protection for incumbents. The association said some rural carriers used MDS spectrum to provide wireless cable TV service and the ability to transmit signals across long distances reduced the number of sites needed, which was particularly important in rural markets where over-the-air reception wasn’t available. “The Commission’s proposal to impose an across-the-board reduction in power would effectively end rural carriers’ video service,” NTCA said.