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CARRIERS GEAR UP FOR BIG FIGHT OVER H-BAND SPECTRUM

In what’s shaping up as the next potential big spectrum fight, the FCC is contemplating a release at its Sept. meeting or earlier of a rulemaking clearing the way for the auction of H-block spectrum, sources told us Tues. The FCC is expected both to reallocate the spectrum and propose service rules to make an auction possible.

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The H-block frequency could be used as “fill-in” spectrum, especially for carriers like Nextel and T-Mobile that are in the market for bandwidth. Verizon Wireless, for one, has been buying up licenses and recently agreed to purchase Qwest’s licenses as well as the N.Y. license offered for sale by NextWave.

The spectrum could potentially be useful to Nextel, which is scheduled to receive adjacent G-block spectrum as part of the 800 MHz spectrum rebanding plan approved by the FCC at its July meeting. H-block spectrum is at 1915-1920 MHz and 1995-2000 MHz. The former is unused and the latter is dedicated to broadcast auxiliary service. The problem comes in the potential to interfere with nearby PCS spectrum, especially A-block licenses at 1930 MHz and above.

“H block has been very controversial because of the potential for interference with existing licenses,” said a regulatory attorney who represents unlicensed and other interests. “What we're seeing is the Commission staff pushing ahead on the theory it will be possible for H-block to avoid interference.” The attorney added: “If the Commission imposes highly protective restrictions on the H- block licenses, that should be satisfactory to the PCS community. The problem is that may make H-block unusable.” He added that while the designers of existing phones may be able to modify them to operate in the H-block if the Commission imposes tough restrictions, doing so could prove difficult.

A 2nd regulatory attorney said other carriers would look closely at the spectrum if it’s auctioned. One critical question is the size of the licenses -- whether they're for a limited geographic area. “There are interference issues on both ends,” the attorney said. “All the carriers and manufacturers are looking actively at this. People are interested in more spectrum. The question is are the interference constraints resolvable.”

The FCC recently scheduled a major spectrum auction of PCS licenses returned to the Commission by NextWave and others for Jan. The Commission has also promised an auction of spectrum to be used for 3G services. Sources said Tues. it’s unclear how the H-block spectrum would fit with the other auctions.